Estate Needs and Will Needs for Someone With a Dependant - Episode #156
Listen to Estate Needs and Will Needs for Someone With a Dependent
This week on Hull on Estates, Jonathan Morse and Sarah Fitzpatrick present and mock client situation in which they discuss the estate needs and will needs for someone with a dependant.
They describe the process of finding new clients and go on to describe the process of fulfilling these needs for the client.
Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.
Estate Needs and Will Needs for Someone With a Dependent - Episode #156
Posted on April 1st, 2009 by Hull & Hull LLP
Jonathan Morse: Hello and welcome to Hull on Estates. You’re listening to episode #156 on Tuesday, March 31st, 2009.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.
Jonathan Morse: Hi and welcome to another episode of Hull on Estates. I’m Jonathan Morse.
Sarah Fitzpatrick: And I’m Sarah Fitzpatrick. If you want to be heard on Hull on Estates, you can participate by leaving us a comment. E-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
Jonathan Morse: Well, Sarah, here we are. This is the first time we’ve podcasted together and thought we’d try something different this time around.
Sarah Fitzpatrick: Absolutely.
Jonathan Morse: And bear with me. I’m going to present myself as your client. And this, of course, is a mock client situation but I fortunately have the good fortune of being a new Dad in the last few weeks.
Sarah Fitzpatrick: Congratulations. That’s great news.
Jonathan Morse: Thank you very much. It’s very exciting but I thought it would be timely to simply look at sort of the estate needs and the Will needs and you can walk me through it hopefully.
Sarah Fitzpatrick: That’s right.
Jonathan Morse: And so here I am. I’ll knock on your door. And introduce myself. First of all, tell me if you would, how you receive new clients and how new clients find you.
Sarah Fitzpatrick: Absolutely. I think typically my clients often come through word of mouth and the new client will often contact me by telephone or by e-mail and inquire as to what’s involved with getting a Will prepared. Typically I send out a questionnaire to new clients and I’ll get a little bit of background information on what their circumstances are and how complex their estate needs are. If it looks like their situation is fairly straightforward, for example, a new family, perhaps a new baby is on the way and young couple that perhaps has not done a Will before. I often find that sending out my form of questionnaire by e-mail typically now is really one of the best ways to proceed. Clients can still come to my office and meet me if they choose but often again if their circumstances are fairly straightforward, sending out that questionnaire to the clients is a good way to get the ball rolling.
Jonathan Morse: And so if I receive…so pretend I’m not here in person with you…and I send you a questionnaire and I’m filling it out, presumably if I have questions on filling it out we would go back and forth a few times.
Sarah Fitzpatrick: Absolutely.
Jonathan Morse: Okay.
Sarah Fitzpatrick: Absolutely. We can do so by e-mail, we can do so on the phone and again, we can always have a meeting as well.
Jonathan Morse: Right. And specifically, what do you look for in that questionnaire? What are the categories that you cover?
Sarah Fitzpatrick: Certainly. The questions typically start with I’m looking for background information, financial information. For example, do you have life insurance? Do you have RRSPs? Property?
Jonathan Morse: Right.
Sarah Fitzpatrick: Whether its property in Ontario. Whether you have foreign property. How that property is held. Investments. Your bank accounts - are they joint bank accounts; are they separate bank accounts? So the questionnaire really elicits all that general type of information. Again I do like to, even with the questionnaire, go through those items with the client on the phone, by the e-mail. We can go through it all to make sure that they understand. For example, if they own property, I want them to understand if it’s owned, if they understand the nature of ownership, if it’s jointly held or separately held. So those are typically the categories of the questionnaire and then I will go on to actually ask what some of their Will instructions are.
Jonathan Morse: I see and when it comes to Will instructions, I guess you’re looking at what are my objectives, why am I coming to see you.
Sarah Fitzpatrick: Exactly. The complete estate plan is really a few documents. It’s not really just your Last Will and Testament. My complete estate plan would include three essential documents: it’s your Last Will and Testament; it is your continuing Power of Attorney for Property and your Power of Attorney for Personal Care. And I often refer to those documents to my clients as the Powers of Attorney are documents that you need when you’re above the ground and your Last Will is something that you need when you’re below the ground. And they don’t overlap. They’re different documents required for different stages of your life essentially. So the Last Will and Testament, there are questions pertaining to that. So that would obviously be your Will instructions. Where do you want your estate to go?
Jonathan Morse: Right.
Sarah Fitzpatrick: Where do you want, who do you want your estate trustees to be? All of those types of questions. And then we’ve got specific questions with respect to the Powers of Attorney. Who you want to appoint as your attorney? Do you want more than one? Who your alternate attorneys will be, and so forth?
Jonathan Morse: Right, I see. And as I’m coming to you, my wife and I have a new son, Benjamin, Ben. And presumably I’m coming to you because I want to make sure that if something were to happen to me or to my wife that we now have a dependant, so our dependant’s needs are taken care of.
Sarah Fitzpatrick: Absolutely.
Jonathan Morse: So I guess, for example, life insurance proceeds would come into play or become a more important piece of the puzzle at this point. Would that be right?
Sarah Fitzpatrick: Alright, absolutely. I think that would be the most common scenario when I’m seeing clients for the Will is the, like I mentioned before, the young couple with a new child because you turn your mind to providing for that new dependant in your family. So obviously Will review questions such as life insurance, do you have life insurance? Do you have sufficient life insurance? Obviously, and we’ve podcasted and we’ve blogged on many instances on the benefits of having a life insurance declaration. But by doing so, not only can you name a beneficiary, you can also name an alternate beneficiary and you can also take advantage of the alternate residue provisions in your Will in a declaration. For example, if you do have dependant children, most clients will request a trust for their children.
Jonathan Morse: Okay.
Sarah Fitzpatrick: And that trust would often be set up so that the child would not receive all of the income of your estate at 18, for example, if both you and your spouse were to pass away in a common accident. So a trust is typically set up for the children and often we have staggered distribution so that they will perhaps get income at 18 and then can have 3 distributions: one at 21, 25 and 30. So one of the advantages of including your insurance declaration as part of your estate planning process is you can actually take advantage of those alternate residue provisions and the proceeds of your insurance policy can be distributed in accordance with your alternate residue provisions in your Will. So that’s a key consideration for clients certainly.
Jonathan Morse: I would like to think that, what are we, the 649 is tomorrow night, Wednesday night. And I’d like to think that I’m going to…
Sarah Fitzpatrick: Are you buying a ticket?
Jonathan Morse: I’d like to think that I’m going to win but I guess the reason I raise that is, estate planning isn’t for…you don’t have to be wealthy necessarily to have to put in an estate plan, I mean…
Sarah Fitzpatrick: Absolutely not.
Jonathan Morse: Okay, fair enough. As again, my fingers are crossed on the 649 but what are some of the big issues that arise? I guess again, speaking of the newborn, guardian issues. Are those questions brought up in the Will?
Sarah Fitzpatrick: Well I think that when most clients are in that situation of coming with a new child, that’s really first and foremost on their mind.
Jonathan Morse: Right.
Sarah Fitzpatrick: Who’s going to be the guardian of my child? And I typically suggest appointing an alternate guardian as well. And as you’re aware, Jonathan, even though you do make a reference in your Will and we have guardianship clauses, that is actually only valid for a 90 day period and there still needs to be a Court application for guardianship and custody of your children as well. But it is obviously very persuasive to have it referenced in your Will.
Jonathan Morse: Right.
Sarah Fitzpatrick: But even though that’s something that is very topical on individual’s minds, I think when they’re coming in to get their Will, it’s usually not a clause that causes a lot of confusion or it’s not a difficult clause at all. Certainly the choice of estate trustee is an incredibly important one as well.
Jonathan Morse: Right.
Sarah Fitzpatrick: Who you want to appoint in this regard? Obviously issues of trust, you need to have implicit trust in whom you appoint in that regard. And certainly I’ll review with the clients who might be appropriate in that regard in a spousal context. Typically it’s to each other and vice versa. But you would also name an alternate estate trustee. Do you want one estate trustee or perhaps you want two or more? Do you want them acting jointly or jointly and severally? So those are issues that are really specific to your individual circumstances and I would review with the client who they had in mind in this regard, how old those individuals were and whether they believe that they were appropriate to act in that type of situation.
Jonathan Morse: And presumably those people would be consulted before they’re put into…
Sarah Fitzpatrick: That’s right. I recommend that definitely.
Jonathan Morse: Sure, okay.
Sarah Fitzpatrick: And certainly once the Will is drafted, advising them where a copy of the Will is held, where the original is and it’s up to you whether or not you’d like to give your estate trustee a copy of the Will as well. And I’m actually, my practice is now to scan signed, executed copies of the Will so you can also forward a copy to your estate trustee of a scanned executed version of your Will as well.
Jonathan Morse: Right, understood. So I would fill out a questionnaire. At some point I would meet you. Would I meet you just at the execution stage?
Sarah Fitzpatrick: Again that depends on whether or not we’ve got a very straightforward situation. We might meet at the outset to discuss the questionnaire, if I feel like we require more information. We may consult back and forth by phone and by e-mail. And then once that process is done, I will send the client drafts of all of the documents. So again, that would be drafts of your Will, drafts of your Powers of Attorney. Then the client has a chance to review that. And typically then we’re still back and forth with some minor issues. For example, an issue that we might go back and forth on is they really need to think about what ages they’d like to distribute the income for the trust for the children. Do they want it to be 2 distributions or 3? Issues like that, we’ll go back and forth on. When we feel like we’ve got a final or a near final copy, we do need to have an execution meeting. In Ontario, you need to have two witnesses. And we all need to be present in the room at the same time when we’re executing the documents. So that’s critical that that meeting is held and we are together in the room executing those documents.
Jonathan Morse: Right.
Sarah Fitzpatrick: And again, the typical scenario is to execute the Will, but we’re also doing Powers of Attorney at the same time. And we have a Continuing Power of Attorney for Property. And it’s called a Continuing Power of Attorney because it continues or it survives one’s incapacity. So that if you execute your Power of Attorney and then you’re involved in a car accident, for example, and you’re in a coma, you can actually, your attorney can rely on that document because it continues or survives or endures your incapacity. Then you also have your Power of Attorney for Personal Care and in most drafts, if the client desires, in my Powers of Attorney for Personal Care, I include a Living Will directive as well.
Jonathan Morse: Okay. Well…
Sarah Fitzpatrick: There’s a lot to think about.
Jonathan Morse: Yes, no question.
Sarah Fitzpatrick: But I find it’s usually turning your mind to the questionnaire and what some of your instructions are. Who you want to be your estate trustee? Who you want to be the guardian of your children? And once you can get over some of those hurdles, it’s the lawyer’s job to figure out the rest of it and to draft your documents. And I think most clients leave our execution meeting saying they can sleep very soundly that night, knowing all their affairs are taken care of.
Jonathan Morse: Right. Well that’s good to know and must be gratifying as well playing that role. So I think we’re about out of time. I hope that’s been helpful for listeners and certainly I expect listeners, if they have questions, can e-mail us we identified our e-mail at the outset. But as I say, I think that brings us to the end of this week’s discussion. Thanks for listening and thanks for joining me today.
Sarah Fitzpatrick: Thank you Jonathan.
Jonathan Morse: We look forward to hearing from our listeners. You can send us an e-mail as we said earlier, at hull.lawyers@gmail.com and be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law. We hope that you enjoyed the show. I’m Jonathan Morse.
Sarah Fitzpatrick: And I’m Sarah Fitzpatrick. Until next week, so long.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
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