Planning for Tomorrow: The Three Legal Documents Every Estate Plan Needs

Estate planning is a crucial aspect of ensuring that your wishes are respected and your affairs are managed according to your preferences. In British Columbia, three key legal documents play a significant role in this process: Power of Attorney (POA), Representation Agreement (RA), and Will. Each serves a distinct purpose and is essential for comprehensive estate planning. Here, we will explore the differences between these documents and their importance.

Power of Attorney (POA)

A Power of Attorney is a legal document that allows you to appoint someone (an "attorney") to manage your financial and legal affairs. This can include tasks such as paying bills, managing investments, making investment decisions, and handling real estate transactions. There are different types of POAs:

• General POA: Grants broad powers to the attorney.

• Specific POA: Limits the attorney's powers to specific tasks.

• Enduring POA: Remains in effect even if you become mentally incapable.

For estate planning purposes, a general and enduring POA is most often used to prepare for future mental incapacity. It ensures that your financial and legal matters are handled according to your wishes if you are unable to do so yourself.

Representation Agreement (RA)

A Representation Agreement is a legal document that allows you to appoint someone (a "representative") to make personal and health care decisions on your behalf. This can include decisions about medical treatments, living arrangements, and other personal care matters. There are two types of Representation Agreements:

• Section 7 Representation Agreement: Covers routine financial and legal matters, as well as personal and health care decisions. It is suitable for individuals with slightly diminished mental capacity who do not have the requisite capacity to make a Section 9 RA.

• Section 9 Representation Agreement: Covers more comprehensive health care decisions, including end-of-life care decisions.

Incorporating an RA into your estate plan ensures that your personal and health care needs are managed according to your wishes if you become incapacitated.

Will

A Will is a legal document that outlines how your estate will be distributed after your death. It allows you to appoint an executor to manage your estate, specify beneficiaries, and provide instructions for the distribution of your assets. Unlike a POA and RA, which are effective during your lifetime, a Will only takes effect upon your death.

Importance in Estate Planning

1. Continuity of Care: Ensures that your financial, legal, and personal care needs are managed according to your wishes if you become incapacitated.

2. Avoids Court Intervention: Reduces the need for court-appointed guardianship or committeeship, which can be time-consuming and costly.

3. Peace of Mind: Provides peace of mind knowing that trusted individuals will manage your affairs during your lifetime and that your estate will be distributed according to your wishes after your death.

Conclusion

Incorporating a Power of Attorney, Representation Agreement, and Will into your estate plan provides a well-rounded approach to managing your affairs and ensuring your wishes are respected. It is important to note that both POA and RA terminate upon your death, and your Will would govern your estate upon death. Consulting with a legal professional can help you create a comprehensive estate plan tailored to your specific needs and circumstances.

If you have any questions please do not hesitate to contact us at Strain and Company.