Last month in discussion with lawyer Gary Courtney of Courtney Aarbo, we mentioned in most jurisdictions in Canada, there usually is legislation in place covering the administration of your estate (in Alberta it’s the Wills and Succession Act).
Unfortunately, the government scheme of who could be an executor to deal with the resolution of your estate is often not the best fit for people in the LGBT community. Under this scheme, without a will any children or pets could be put in the care of people you’d rather not have as guardians. And without the right paperwork in place, if you’re medically incapacitated, bad decisions you would never support can be made about your estate or even about your own health.
Immediately after your death, the first thing impacted by the use of a government appointed executor is your last goodbye. Without a will, while the financial side of your estate will work its way through the system, a funeral has to be held usually within a week. Therefore, the court appoints someone. It will most likely follow the government arrangement for the dispersal of your assets (i.e. spouse/ children/ parents/ siblings/ other relatives).
This may not lead to the funeral you want, Gary says. For example, "...most of my clients want to be cremated. However if your parents happen to be of a more traditional view and want to inter you – that’s what will happen...obviously your preferences aren’t being handled...you may end up having a high Catholic funeral." Which can happen if your parents are very religious and you aren’t – they get to make the call as you don’t have a will.
A more chilling possibility: if you are trans and are starting to transition but legally haven’t fully made the change, your family could decide to bury you in the sexual configuration they want.
Even if you’ve pre-paid for your services and a plot, if the court appoints someone, they could go against what you wanted – either accidentally or maliciously. "If you have no will, yet you have passed on to your friends how you would like to be buried, I’ve yet to see a situation where a person has no will and the friends take charge. Because they can’t take charge." The legislation has a list of who to turn to in this event, and friends aren’t on it.
Having your burial wishes ignored is only the start of how sideways things can go. There are nightmare scenarios which could happen with children and pets who are left behind. Without a will, if you had children and no spouse (or your spouse died first and neither of you had a will), potentially your children could be raised by family members you would never consider as guardians. For instance, if you were an atheist liberal-minded individual who escaped an extremely religious and conservative family, without a will your kids might be raised with the values you tried to escape.
"A critical element of the will is naming...who is to be the guardians of these children. Usually you name a backup as well...you don’t have them named then you’re not providing the court with any guidance of what you would want." The importance of having a backup – or several backups is that between when you did up the will and when you died, things may have changed for your appointed guardians.
With pets – that’s almost as important. "If you have a pet and no will, it will go to whomever the court has appointed next-of-kin in your will." This may mean it will go to people who are allergic, ambivalent, or are basically not the person you would have picked as a guardian for your pet. How many times have we heard stories about pets that belonged to an old lady – pets which are now languishing at the local pound; pets that may be a week away from being euthanized? The guardian of your pet may not be the permanent new owner, but you could state in your will this person will look after the pet until such a time a suitable home is located for the animal.
Now that you’ve dealt with your burial, any children or pets, a good lawyer will advise you on how to manage any debts which need to be repaid after your death. Yes, even once you die, to a certain degree debt-holders can go after your estate.
If there is a large estate with some debt which would take part of the estate, this would be addressed as part of the will. "The first giving away clause in any will is that the executor has to pay all the debts. That comes before any bequests." The executor’s job here is to make money out of the estate. While you may have wanted certain items sold and other items bequested, in the hands of an executor you have NOT chosen, it’s just all assets to sell.
Many lawyers will advise clients on how to set up their assets so they bypass the will, Gary said. For example, "...if you have an RRSP, you need to have it go to a spouse or common-law. You name the spouse or common-law to be the beneficiary on the RRSP file." If it goes to your estate, there will be tax assessed on it and whatever is left goes to pay down debts. Employment pensions and life insurance policies are similar – name the spouse/common-law as the beneficiary.
This is where sometimes even young people can benefit from a will. They may not have much in the way of physical assets. But they have these policies – be it life insurance or work pensions – which, upon their death can amount to a significant amount of money – money which could go directly to a partner rather than to debt-holders. If you’ve both purchased a house, a lawyer will advise putting both names on a house title so it will go right to the survivor, bypassing the will.
Something else most lawyers will suggest when you draw up a will is to consider setting up Personal Directive and Power of Attorney. These two deal with your medical concerns and financial concerns (respectively) when you may be medically incapacitated. Again, while laws may vary depending on what jurisdiction you are in, usually without the proper paperwork the courts will turn to the government scheme (i.e. spouse, then children, parents, siblings, etc.).
Personal directive is sometimes known as a living will, and specify what actions should be taken for your health if you are unable to make decisions due to illness. If two doctors/medical care providers say you don’t have capacity to speak for yourself, your agent would step in
When you’re married, the personal directive may not be necessary – usually if you have a spouse, hospitals will consult with them. With a common-law partner, it becomes a bit murkier. Or if you’re single, the hospital doesn’t know who to turn to; "at that point, people have to go to a judge to get appointed to look after those directions." If you’re in an emergency medical situation time may be of the essence. A personal directive avoids those pitfalls.
Power of attorney comes into play when two doctors say you don’t have the mental capacity to make decisions for yourself and someone steps in to act on your behalf, Gary told me. "Even if a person is married, I’ve found that the banks and investment companies – they want a power of attorney, they want a document...they want to see that." Having a legal document stating power of attorney tends to allay any questions and make matters flow faster and easier. Also, it allows you to appoint the person you want to act as your agent.
On a side note – Power of Attorney and Personal Directives are important when travelling to countries where gay marriage is not recognized. If you have an emergency occurring in Canada and you are legally married, you usually get both of these recognized by the Canadian courts. In other countries you may be denied your rights simply because they don’t recognize your marriage as being legal. "Virtually anywhere that I know of those documents will be effective; while if you’re married here and you’re somewhere same-sex marriage is not recognized...you can be just ignored."
Much of this information about wills is known to people who either have children or people who are 50-plus and have amassed a lot of assets. This group has started to realize they’re not immortal. Yet it’s the younger crowd who maybe are coming into their own life; even though they think they may not have much, they really should get a will. If they’ve left a dysfunctional family, and they don’t have part of the government scheme in place (i.e. spouse and children), if they die they may be shoved back into the closet or leave a huge mess which may not be sorted out how they would have wanted. It doesn’t take long and ideally you should revisit the will every 5 years or after a major life event (e.g. birth of a child, marriage, divorce, etc.).
Think of it as a final insurance you will use – while you may never get into a car accident you still buy car insurance. You may never have a fire, flood or burglary in your home; however, you still buy home insurance. As unpleasant as it is to think of, we all die; how your life ends should be how you lived – not how a stranger may want your life to be.