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Sunday, January 3, 2016

Recent friend adds complexity to changes being made to a will

Sometimes, making changes to your will is anything but simple. Family dynamics play a huge part in estate planning, as the following letter from a reader shows. The form of the changes (as opposed to the content) is also important. Read on to see the sweeping changes this reader wants to make, and how I responded to her questions.

My will is drafted, but now both adult children have estranged themselves from me, their mother. Is it possible to draft a codicil to adjust who inherits to my grandchildren? A young man I know and trust has agreed to be Executor of my will, power of attorney and living will. My son indicated he does not want next of kin status, so, since he no longer wants an association with me, am I able to adjust as well by codicil?

There's a lot to be covered here, but let me start with the issue of whether a codicil is the appropriate way for you to make changes. Actually, it sounds as if you want a whole new will. The codicil was designed in part to be a labour-saving device back in the days when wills had to be written out by hand, or later type-written. The idea was to keep - and affirm - the contents of an existing will while making a small change.

You are not talking about a small change; you're talking about changing your executor, removing beneficiaries, adding beneficiaries, and adding additional clauses. In other words, you're keeping pretty much nothing about the original will.

Perhaps you've heard that making a codicil is cheaper than making a whole new will. Perhaps it is, when it's used only to make a small change, but in your case there is just as much work as creating a whole new will. Also, because wills are made on computers these days, there is no labour-saving component to a codicil in most cases anymore.

Now let's talk about these changes you want to make. Yes, you can change your beneficiaries from your children to your grandchildren. You are not obligated to leave anything to your adult children who are not dependent on you. While normally it's expected that parents will leave their estates to their children, you have what seems to be a good reason to exclude your children.

I'll be frank when I say that the existence of the young man you mention rings my warning bells. If he is a nephew or other relative, that's somewhat better. Or perhaps he is a young professional associated with a law firm or accounting firm with whom you've had a long working relationship. Otherwise, I have to say that a young person willing to take on all of that work for no return is suspicious. Call me cynical (you wouldn't be the first) but I implore you to think long and carefully before handing over any legal authority to anyone, particularly someone who is new to your life. I suspect that this young man may even be the source of the friction you have with your children.

Please don't take offense at this. My practice, and that of thousands of other lawyers, has seen many seniors who have been duped out of everything they own by a helpful young person. Each and every one of them trusted someone implicitly and ended up with nothing. When you give someone authority  under your Power of Attorney, you're giving them access to everything you own. I don't know your financial situation, but have you considered using a trust company? At least with a trust company you'd be protected by all of the bank regulations and trust laws.

The fact that you're seeking out information is great, as I think you know your situation is not simple. Please do not under any circumstances prepare your own documents. You need to sit down with a lawyer whose understanding of wills and estates law goes very deep, and who will take the time to talk through all of your choices. Shop around for a lawyer who specializes in wills, if there is one near you. If not, try to find one who does a lot of work in this area of law. You don't want the guy who does two or three wills a year; you need solid advice.





5 comments:

  1. Hi Lynne,
    What happens when a executor has giving a family member power of attorney ? Does the person with power of attorney deal with the estate or does the job pass down to the alternative executor ?
    My father died leaving his wife as executor , her son took power of attorney over her the same day as the death. The alternative executor stepped in (although denies it) completed the income tax, CPP and land title transfer . A Renunciation was never signed. Who is responsible to act as executor ? Thank you

    ReplyDelete
    Replies
    1. The alternate executor is the one who should handle the job. The person with the power of attorney should sign the renunciation on behalf of your father's wife. One thing that might cause a problem is the wording of the will's executor clause. In older wills, it often says that the alternate takes over if the first choice has died, but doesn't say anything about inability to act. Check that.

      Lynne

      Delete
  2. Hi there. If a person had a partner named as beneficiary on a bank account and passed without having updated or changed that beneficiary, despite redoing the will recently, is the named beneficiary awarded the fund? If contested by family how do the courts usually rule in a situation like this?

    ReplyDelete
    Replies
    1. The named beneficiary will still get the fund. The fact that the will has been updated doesn't change that, as the will does not affect assets with named beneficiaries. This is not an easy thing to contest. The law assumes that what you leave in writing, you left that way on purpose. In the majority of cases I've read, the court upholds the beneficiary designation because it's assumed that if the owner of the fund wanted to change the beneficiary, he or she had a chance to do that, especially since he/she just changed the will. This shows the person thought about what to do with his/her estate and didn't change the designation.

      Lynne

      Delete

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