Your Estate can be described as everything you own; (whether real or personal property) and your liabilities (debts). Most of us intend to pass our estate on to our survivors i.e. our spouses and/or children, when we die. It is important to set up an estate plan to ensure your wishes are carried out and the estate you leave is passed on in the most tax efficient way.
Establish your team. There are a lot of things to consider when drawing up your estate plan. It would be advisable to assemble a good team of professional to help you with the process. You need an estate planner, a lawyer and a tax advisor.
There are a number of tools available to you to ensure your wishes are carries out and that your assets are protected from over taxation.
- A will: Is a legal document that outlines how your assets are to be managed and distributed after you die. In common law, a “will” disposes of your real property, while a “testament” disposes of your personal property. Nowadays, the term “last will and testament” is used to combine both.
- A Power of Attorney: is another legal document whereby you give another person permission to act on your behalf. There are three types of power of attorney.
- Continuing power of attorney for property: allows you to name a person or persons to make decisions concerning you financial and personal affairs. This continues if you become ill or incapacitated.
- Non-Continuing power of attorney for property: is usually given for specific purpose, does not continue if you become mentally incapable.
- Continuing power of attorney for personal care: give a person power and authority to make decisions regarding your medical and personal care in the event you are unable to make these decisions on your own behalf.
- A living will: is sometimes used to refer to a document in which you write down your wishes concerning your medical treatment or care, in the event you are too ill to make those decisions for yourself. For instance many people write a living will directing they not be kept on life support if there is no hope of recovery. You don’t necessarily appoint a specific person to carry out your wishes, however you can make it part of your power of attorney for personal care. At the very least, you should make sure your power of attorney knows your wishes.
You should consult a lawyer to draw up your will and powers of attorney.