A person never stops changing throughout his or her life. Over time, a person may fall in love, marry, have children, divorce, grow older, and fall in love all over again. When looking at the population as an aggregate, it becomes clear that Canadians are changing at an unprecedented rate.
The population is aging. More Canadians are choosing to live in common law relationships. Blended families are becoming more frequent. These ever-changing family arrangements may enrich the lives of their members and bring people together in new ways. Although they create new challenges and issues in estate planning, they have also inspired novel approaches to resolving those issues.
None of us are getting younger. In fact, seniors are the fastest growing age group in Canada. While many of us are leading longer and richer lives, health issues associated with age are unfortunately on the rise as well. The incidence of Alzheimer's disease is expected to double within the next decade. Many Canadians are being caught in a situation where they do not have adequate estate plans in place, but they are no longer capable of executing the documents necessary to remedy the situation.
In these situations, application to the court for guardianship of the incapable person's property and/or personal care may be necessary. Such applications can be very costly and may be divisive within a family. Further, it puts decisions that will dramatically affect a person's daily life into the hands of a stranger on the bench.
An ounce of prevention is worth a pound of cure. Taking the time to prepare powers of attorney for property and for personal care while capable can avoid heartache for yourself and for your loved ones. These documents form part of a complete estate plan and should be updated from time-to-time.
Powers of attorney allow Canadians to decide who will make decisions for them in the event that they become incapable of doing so. They may contain directives about what decisions the attorneys can make, and what they should choose. Otherwise, a judge may be forced to make decisions of this kind in the context of a guardianship application.
More and more, Canadians are choosing to live together without the formality of a marriage certificate. Many assume that individuals in common-law spousal relationships are accorded the same rights and privileges as legally married spouses. Some choose to blend their property, while others choose to maintain separate assets.
In reality, for many purposes, common law spouses are treated quite differently than married spouses under Ontario law. On death, married spouses are entitled to inherit if one spouse dies without a will while common law spouses are not, for example. Most of these differences can be resolved through careful planning. Having a will can protect a surviving common law spouse from being left with nothing. A written cohabitation agreement may spell out the intentions of the parties with respect to their assets on death as well. Whatever the intended arrangement, it is well worth taking the time to document your intentions, and to do so properly so as to give them legal effect.
Increasingly, Canadians are finding happiness later in life with second spouses and second families. In these situations, professional advice may be desirable to balance the competing demands of providing for the first and second families in an estate plan. This has resulted in a host of creative solutions. Individuals may set up trusts, or may make gifts during their lifetimes. It is also important to communicate your wishes to your family so that no one is caught by surprise. By dealing with these issues with potential beneficiaries in a mature and honest fashion while you are alive and capable, you may be able to prevent animosity and litigation.
As the ways in which we live together continue to evolve, new and unique challenges will arise regarding how we deal with each other and with our property. As the law changes to keep up with the changes in the demographics of Canadians, Canadians must keep up with their estate plans to ensure that nobody is left behind.
*Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.
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