The basic estate planning documents that everybody needs

The term "estate planning" sometimes makes people think of millionaires who live behind wrought iron gates with a butler at the door. But all it really means is that you've put plans in place to deal with your eventual passing and for the possibility of losing your mental capacity. Estate planning isn't just for the wealthy. Everyone with a family needs to think about estate planning.

Most people know they need a will, even though a good half of Canadian adults don't have one. Even with a valid will in place, you haven't fully prepared yourself to protect your family and your assets. Your will does nothing to help you or your loved ones if you are alive but unable to make decisions due to dementia, illness or injury.

Here are the basic documents that everybody should have:

1.  A valid will that is kept up to date to reflect changes in your life. The will should be prepared as part of a bigger estate planning picture that takes into consideration your joint property, your designated beneficiaries on policies and plans, your insurance coverage and of course your plans for your family members left behind. All of these things must be co-ordinated so that your documents don't contradict each other or create confusion that will end up being sorted out by the courts.

2.  An Enduring Power of Attorney, which is also called a Continuing Power of Attorney, or a Power of Attorney for Property. This document allows you to appoint someone to make financial decisions for you if you should be unable to do so for yourself. Most commonly this document is used when a person develops dementia, but it may also be used if you should be severely injured in an accident or become very ill.

3.  An Advance Health Care Directive, also called a Personal Directive or Health Care Proxy. The person you name in this document will be able to make decisions for you about medical issues, health care and personal issues. The document should also contain your instructions on end-of-life decisions.

The above three documents are usually sufficient for individuals whose estates are not complicated. Business owners may find that they need additional estate planning documents, such as:

4.  Shareholders' Agreement, sometimes called a buy/sell agreement. While not solely an estate planning document, a shareholders' agreement should address what is to happen with shares of a privately held company if the owner should pass away or lose mental capacity.

5.  Life insurance to fund the buy/sell agreement.

6.  A written business succession plan that sets out who is to take over the family business, and how that plan is to be implemented financially.

7.  A holding company may be needed to funnel excess cash out of an operating company to improve the potential tax situation.

Individuals differ, and so do their estate-planning needs. You may find that you have specific goals that will require additional documents to be made. For example, you may wish to leave a Memorandum of Personal Effects that gives certain items to specific people on your passing. You may wish to leave a Letter to Executor that leaves personal messages, gives further explanations or expresses wishes to your family members.

Start by making sure that you have the first three documents in place and keep them up to date. An experienced estate planning lawyer can help you decide what else you might need or want to protect your loved ones.

Case emphasizes need for end-of-life discussions

Have you ever wondered whether it's worthwhile to have a Health Care Directive (also called a health care proxy, personal directive, power of attorney for personal care) made up to express your wishes? If you've ever considered it unimportant,click here to have a look at this article from www.advocatedaily.com. Right now, the Supreme Court of Canada is deciding an essential issue for all of us. They are looking whether doctors have to listen to the person who was appointed under a health care directive when the doctors think it's time to pull the plug on a person in a vegetative state.

The case centres around Mr. Hassan Rasouli. Mr. Rasouli's doctors believe that he is in a vegetative state and will never recover higher functioning. His wife was named by Mr. Rasouli in a health care directive and opposed the doctors' suggestion that life support be discontinued. Had she given her consent, life support would have been withdrawn, allowing Mr. Rasouli to pass away naturally.

The court will decide whether in a case like this, the doctors need the consent of a substitute decision maker to give treatment that they see as ineffective or inapproprite. In case you are getting the impression that the doctors are fighting to end this man's life, please understand that the doctors need and want this clarification by our  higher court as much as Mr. Rasouli's family - and the families of anyone who is on life support - want it. Everyone needs to know where this issue stands.

Each of us should have this document prepared appointing a trusted loved one or friend, and discuss our wishes with that person.

What wishes should a Power of Attorney for Personal Care express?

In this article, Mark Handelman of Whaley Estate Litigation does a great job of talking about Powers of Attorney for Personal Care (also called Personal Directives or Health-care Directives). I recommend that you read it if you are wondering how to communicate your end-of-life decisions.

When you see an estate planning lawyer, you will of course talk about your wills and how your property is going to be distributed after your death. You should also expect to discuss your plans for mental incapacity. You should name someone to look after health care decisions and someone (perhaps the same person but it doesn't have to be) to look after financial decisions. Most lawyers who specialize in estate planning will ensure that you have this whole package in place.

Best of all, Mr. Handelman includes some sample wording, and some legal humour as well. Click here to read this very good article.