Choosing the correct key people in your life is a big decision and is one that you should not take lightly. I’m talking about the person (or persons) that will make sure that your affairs continue to remain in order in the event of incapacitation and thereafter. A lot of people put more emphasis on choosing an executor than a power of attorney but more thought should be put on the latter instead of the former. The reason that I believe this to be the case is that if your power of attorney steps in to assist you then that means you are still living and your well-being will be determined by how well of a job that they do acting as your attorney. Once your executor must step in then you have passed on and what will be, will be.

You have many options for choosing these key people. You can choose family members, friends, or a professional (like a lawyer or a trust & estate corporation). As we know, most people choose family members but do these family members know what they are signing up for? Are they going to be able to do the best job possible if they live elsewhere or if they can not take the necessary time off of work to complete their duties? Most estates do not require a lot of time but it can be very time consuming if there is real estate or other physical-type assets involved (like art, collectibles, etc.).

Generally, a power of attorney does not get paid for their services unless it is written into the legal POA. They have a very important job though, including paying all bills, ensuring all your accounts are kept up-to-date, paying taxes, and buying and selling investments or even real estate. Their job is to make you a priority and ensure that everything that you need is taken care of.

An executor’s job is to secure all assets of an estate and then distribute them according to the deceased person’s wishes. They will follow what you have written in your Will and ensure that everything is dispersed according to your wishes. In regards to a fee, an executor in British Columbia can take as little as 0% but has the option of taking up to 5% of the total estate value. Bear in mind that any accounts that are held Joint with Rights of Survivorship do not pass according to your estate, as they become solely owned by the surviving account owners. Another thing to keep in mind is that any asset (such as a TFSA and RRSP/RRIF) does not have to pass according to your estate if you have named a beneficiary on these accounts at your financial institution.

Here are some things to keep in mind when you are choosing these Key People:

What sort of financial knowledge does this person have? How is their own financial situation?

How old are they today? How old will they be in the future if they have to step into either role?

Are they going to be available for you? Can they take time off of work if it is required?

Now, just because someone has chosen you to act as their power of attorney or executor that does not mean that you have to move forward with it. People need to keep this in mind because as soon as you begin to act as an attorney or executor then you are personally liable for the decisions that you make. You can pass the responsibility on to someone else or enlist the help of a corporation that specializes in these types of roles. All of the Canadian Chartered Banks have Trust & Estate Specialists that focus on these roles and can step in to assist. If you are concerned about any of the responsibilities required then why not enlist a professional? It is a huge responsibility to act as someone’s executor and attorney so think it through before you agree to anything.

Want some help developing your Estate plan? Email me at info@financerx.ca.