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Alberta Estate Planning 101

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*Please note that School of Scheff is not legal advice and should not be taken as such. School of Scheff provides legal information which is specific to the Province of Alberta. Should you reside outside the Province of Alberta, please contact a lawyer in your jurisdiction with any legal queries as the laws across the Canadian provinces vary widely.*

Estate Planning 101

Estate planning and estate administration can be a bit of a mystery. What exactly is an estate? How can I best plan for my affairs? Where do my belongings go if I don’t have any estate planning documents? Do I really need a Personal Directive or an Enduring Power of Attorney? These are all questions I’ve received and they’re good ones. So, let’s get into it!

What is an Estate?

An Estate is all of the belongings that an individual has, including joint or fractional interests. Cash, precious metals, personal possessions, real estate, investments, and vehicles are all items that would form part of an Estate; but there are also other intangible items which form part of your estate. These can be intellectual property rights, licenses, or family law claims upon separation. Additionally, an Estate, through its administrators, can begin (in limited circumstances) or defend a lawsuit on behalf of the deceased person. When we talk about planning for your estate, what we are talking about is planning for what will happen to all of the items and interests in your Estate when you die.

Broadly speaking, there are two different ways that a lawyer can assist you with your estate: a) by planning while you are still alive; and b) by helping your loved ones administer your estate when you’ve died.

The Trio

There are a trio of documents in the Province of Alberta: a Will, a Personal Directive, and an Enduring Power of Attorney. Together these three documents help a third party assist you when you are still alive (but may be incapacitated) or upon your death.

Agent, Attorney, Executor, Executrix, and Personal Representative are all terms you may have heard in the estate context but may not know how they work together or where they apply. Simply speaking, all of these titles are titles which describe the individual who was granted authority under a particular estate document to do a particular task. Each document has a different term.

Agent refers to a Personal Directive; Attorney refers to an Enduring Power of Attorney, and Personal Representative refers to a Will. Executor and Executrix are also terms which relate to a Will, but they are the old terms for what we now call a Personal Representative. Legally speaking, personal representative is the term used by all of the estate legislation in the Province of Alberta and the term that you’ll most likely encounter if you are administering an estate with estate planning documents drafted recently.

A Personal Directive is a document which deals with all things related to your physical person, not just medical decisions. The Agent can decide where you would live; who you’d be able to see and who would have access to you; decisions about what social, educational, or employment activities you may take part in; and lastly, make health care decisions. You can also expressly limit the Agent’s authority to particular areas only.

An Enduring Power of Attorney is a document which deals with all things related to your financial and legal matters. This includes receiving your mail; paying bills; dealing with any on-going legal matters or starting new ones; investing; renewing or taking out a mortgage on real estate assets; buying or selling real estate; or doing anything else that you could do legally or financially in law. The Attorney steps into your shoes, unless you expressly limit their authority.

Either of these documents can be springing – meaning that they take effect upon some event, usually mental incapacity – or they can be immediate – meaning they are active and can be used to manage your affairs the moment they are signed. Immediate powers of attorney are often executed out of convenience and are common for elderly individuals who have mobility issues or other difficulties managing their affairs.

The Personal Directive and Enduring Power of Attorney only have effect while you are living. The moment you die, these documents are no longer valid and any authority the Agent or Attorney had under the Personal Directive or Power of Attorney, dies with the person who granted that authority. Conversely, the Will only has effect when you die and has no effect while you are still living.

So, it’s a job?

Personal Representatives, Agents, and Attorneys all have a great deal of responsibility attributed to their roles. When selecting a Personal Representative, Agent, or Attorney, many people consider it to be an honour that they are bestowing upon that person, and while that can be true, what you are really doing is giving that person a job. Often a stressful and difficult job.

There can be many responsibilities for this person depending on the complexity of your affairs and the kind of care you may require. Therefore, when deciding who you would want to be your Personal Representative, Agent, or Attorney, you’ll want to consider who you trust and who has the necessary skills to carry out these important jobs. You can also appoint different people in each document; they do not have to be the same individuals, but often are.

I haven’t planned. Now what?

What happens if you don’t have a Personal Directive, Enduring Power of Attorney, or a Will? If you do not have a Personal Directive or an Enduring Power of Attorney and you become incapacitated (such as having an accident; a surgery which results in a bad outcome; or being mentally incapacitated due to illness), your loved one would have to apply to the Court for either a guardianship or trusteeship order, depending on what needed to be managed, in order to gain authority to manage your affairs.

Guardianship would provide similar authority to a Personal Directive and Trusteeship would provide similar authority to a Enduring Power of Attorney. This process can be a very expensive (~$2,500) and lengthy process (several months), while in the meantime no one is able to manage your affairs.

If you do not have a Will, there are several complications which can arise. First, assets your loved one would have to administer require that person to have a Will or a Grant of Probate (which is a document granted by the Court providing you with legal authority to administer the deceased persons estate) confirming they have authority to deal with that asset. Unless your loved one can present a Will or a Grant of Probate, it’s highly unlikely they will get access to any of the deceased person’s information, let alone be able to deal with the asset.

If you die without a Will, there is legislation in Alberta which dictates who may apply to administer your estate and where your belongings would go.

Dying without a Will is referred to as dying intestate and dying with a Will is referred to as dying testate. Most often for couples who are married or are adult independent partners (what is sometimes referred to as common law), the belongings go to the surviving spouse or partner. Most often for single people, the belongings go to their parents equally, and if not their parents because they’ve died, to their siblings equally. In short, I’d encourage everyone to have estate planning documents prepared in order to provide themselves (and their loved ones) with peace of mind.

Preparing estate planning documents ensures that should the worst happen, there won’t be added complications to the situation due to a lack of legal authority to manage your affairs.

About the Author

Charlene Scheffelmair is a partner with Davidson & Williams LLP in Lethbridge, Alberta. She practices primarily in the areas of corporate and commercial law; residential and commercial real estate; estate administration and planning; and foreclosures.

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