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It’s a matter of when, not if, ‘something happens to you’

Need to know issues for your will and estate, with LMR’s Norm Bowley

Norman Bowley
Norman Bowley

This is a true story:

Mrs. Peters died without a will, years after her husband. When she had married him, he already had four young children from a previous marriage. Mrs. Peters raised them as her stepchildren. She then had a child with Mr. Peters.

One big happy family – right?

Because Mrs. Peters died without a will, the law held that her own child took all of the estate. Her stepchildren were out of luck. Under the law, they were not entitled to a nickel.

The risks of intestacy

When you die without a will, it’s called intestacy. The government decides how your estate is divided.

If you die, married without children, your spouse gets it all. If you have children, your spouse gets from the net estate the first $200,000. The remainder must be divided equally among your spouse and any children you had together. If you don’t have a spouse, the net estate is divided amongst your children. If you have neither, the estate is divided among your parents, then your siblings, then the next nearest relatives.

“While not having a will is scary, having a bad one is worse,” says lawyer Norman Bowley. “You need to know the essentials.”

Bowley chairs the Estates and Succession Planning Group at law firm Low Murchison Radnoff LLP, where he enjoys tackling complex and thorny family and commercial problems.

The deadly lottery

“Like a poorly packed parachute, nobody knows you’ve botched your will until they’re scraping up the bits,” he said. “If you wrote the will yourself, your family has no recourse. If an incompetent lawyer drew it up, they can try to sue.”

A special problem arises for older couples with adult children from previous relationships. Careless planning could leave one set of kids inheriting everything while the other set gets nothing.

Put your trust in trusts

A key aspect of good estate planning is tax reduction. Without it, your heirs could be left paying thousands, even millions in too much tax out of the value of your estate.

“Whether using a tax-driven trust or a wrap-around trust, careful planning provides a mechanism by which the couple can live out their lives with maximum comfort, but afterwards treat both sets of kids with fairness,” Bowley says.

Trusts provide great tax-reduction techniques with a huge return on investment, but only if all the fine details have been addressed to pass the scrutiny of the taxman. Setting up a trust is not a task for amateurs.

Your power of attorney

The other essential element is a continuing power of attorney (POA). A POA for Property provides an individual with the authority to conduct your financial affairs after you have lost your capacity to do so. 

“This is essential for property or business owners and professionals,” Bowley says. “In many scenarios it makes sense to give a POA to a spouse or adult child, but grant a special one for your business to a colleague.”

A POA for Personal Care provides for a trusted individual who knows you well to make decisions for your care if you become incapacitated.  

“This may be the most important document you ever sign,” Bowley says. “Imagine you are in a care facility, trapped in a frail body, confused, unable to communicate. Fortunately, when you were strong and capable, you had appointed someone to be your Ambassador to the Outside World.”

Professional guidance

A seasoned estate lawyer will carefully examine your family structure and finances, and then begin to identify issues and discuss solutions.

“My clients frequently express amazement that we uncovered issues they never dreamed existed,” Bowley says. “I think to myself, ‘thank goodness they didn’t use a will kit!’”

Nearly half of all Canadians put off estate planning, either because there is a cost involved, they don’t want to consider their own mortality, or they’re just too busy. 

“Like  good medical care, putting it off can be disastrous,” Bowley says.

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For more information, please contact Norman Bowley at (613) 236-9442 Ext. 179 or