When having a Power of Attorney drafted by a lawyer there are certain legalities that must be met. A power of attorney document must by in writing (not electronic, video, ect. Must be in hard copy). The document must be signed by the grantor who meets the capacity requirements (has to know the nature and extent of the document). The document must then be witnessed by two people and all parties must sign in the presence of each other. When deciding whom to appoint as your power of attorney there also a few things that must be considered. For a power of attorney for property the person you appoint must be above the age of 18 for that is a legal requirement. The person should also be good at managing assets/finances and should be someone you trust. The legal age required for power of attorney for personal however is 16. The person whom you appoint cannot be someone who provides support services for compensation (healthcare, residential or social) unless that same person is a relative or spouse. The person should also be someone who you trust and will be willing to take on the role. For both power of attorneys it is recommended that you appoint more than one either jointly or severally in case one of them does not except the role or cannot act for whatever reason.
Beneficiaries
When drafting a will in Ontario there are certain terms that need to be known that are included in a will. One of these terms is a beneficiary. A beneficiary is someone who receives any gift under ones will. A beneficiary can receive various different kinds of gifts such as a specific item, real estate, a percentage or specific amount of the whole estate. When including a beneficiary in a will it is important that the correct legal spelling of the name is provided. A will may contain as many or as few beneficiaries as you see fit. What happens if a beneficiary named is not alive at the time your death? In a situation like this if there is no alternative beneficiary provided the gift will lapse. What this means is the gift that was intended for that specific person who is no longer alive will fall into the “residue” of the estate. It is important to have a residue clause in a will to deal with matters such as this. A residue clause will state that whatever assets are left over have somewhere/someone to go to. One can also put into a will an anti-lapse provision so the above lapse does not take place. An anti-lapse provision will allow the gift of deceased beneficiary to be passed down to certain relatives instead of going into the residue of the estate.
Categories of gifts
What happens when an estate does not have enough funds to cover to pay out all the debts and cover all the gifts to the beneficiaries? This process is abatement. The first thing that has to be paid off through the instructions of a will are to pay off any debts the person had. After the debts are paid then the executor can distribute the residue of the estate but if there is not enough assets to cover the gifts of the beneficiaries there is an order that the gifts will be given out in a priority sequence. The first “class” of girts are ones of property, called devises. If that gift of property has to be sold to pay off debts the remainder of the money will be given to that person still as a “gift of property”. The second priority of gifts are specific gifts, such as a specific car, watch, artwork or piece of jewelry. The third class of gifts are called demonstrative gifts/legacies, these are gifts of money from a specific account. The fourth class of gifts are called general gifts/legacies, gifts of money that are not from a specified location. The fifth and final class of gifts are residual gifts that consist of what is left over after all beneficiaries and creditors are paid.