Wes Forgione - Jun 4, 2023 / 11:00 am | Story: 429973
Photo: Pixabay
A power of attorney will appoint an “attorney” to act on behalf of an adult regarding their financial affairs. That could include banking, selling real estate or filling taxes.
If you are trying to assist your elderly parents with day-to-day financial tasks and they have not appointed you as power of attorney, you will hit roadblocks. You won’t be able to manage their money or property, and institutions like banks and the Canadian Revenue Agency will not communicate with you without a power of attorney on file.
If you or your parents have not signed a power of attorney, and their capacity is still OK, it is prudent to schedule a meeting with a lawyer right away to have it done. The lawyer will assess the adults’ legal capacity at that point.
If, however, a loved one no longer has legal capacity, there is a legal process called “committeeship,” which allows the Supreme Court of British Columbia to appoint a “committee” to manage the financial affairs of another adult during their life. That effectively grants the committee or committees authority over financial and health decisions of the incapacitated adult.
Regrettably, the process of obtaining committeeship is long and expensive. It provides substantial authority to act on behalf of the incapacitated adult but will not allow you to draft a will on behalf of that individual. If there is no will in place, the Wills, Estates and Succession Act, SBC 2009 c 13, will govern how an estate is distributed.
A client approached me about six months ago because her mom had dementia and she needed to sell her mother’s home to pay for her care.
Her mom never prepared a power of attorney and now it was too late. I advised her a commiteeship petition can take between 3 and 6 months to complete. The daughter took issue with this as she needed to do things on her mother’s behalf right away.
Unfortunately, in that case, the client was stuck and would have to wait. Furthermore, the cost of a commiteeship petition is thousands of dollars. She told me she wished her mother had done a Power of Attorney earlier, which would have been several hundred dollars.
One of the reasons a committeeship petition takes so long is because the court requires medical reports on capacity from two doctors. These doctors can take a significant amount of time to coordinate assessments. It also takes time to prepare lengthy materials for the court to review, you may need to obtain consent from a surviving spouse and children, as well as consent of the B.C. Public Guardian and Trustee.
If you are in a situation where you’d like a power of attorney prepared or need to obtain committeeship. please reach out to discuss your options. I can be reached at 778-478-8555 or by email at [email protected].
The information provided in this article does not, and is not intended to, constitute legal advice; all information and content are for general information purposes only.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
Wes Forgione - May 21, 2023 / 11:00 am | Story: 427737
Photo: Pixabay
Kelowna is a city bustling with entrepreneurship and business.
As a corporate lawyer, I am regularly approached by clients wanting to learn information to determine whether they should operate as a sole proprietor or as a corporation.
I dealt with a client last week who runs a landscaping company. He has three trucks, various pieces of equipment and three employees. He operates as a sole proprietor and was curious to learn whether incorporation would be beneficial for his business.
One of the first topics I discuss when looking at incorporating is liability. When I spoke to him, I told him that by operating his business personally, as a sole proprietor, he is personally transacting with the customer. That means if something goes wrong with the business, say a mistake on a job, he would be personally liable.
The risk of operating as a sole proprietorship is a disgruntled customer could sue him personally. From a liability perspective, that is not good. It means his personal assets could be at risk, including his family home and vehicles.
By incorporating a company, he would create a separate legal entity that would transact with customers. That is known as the “corporate veil.” The corporate veil provides a layer of protection for business owners because if something goes wrong, with limited exceptions, the company is liable and not the individuals behind the company.
In my client’s case, if his company was sued and lost, the company would be liable but his personal home, vehicles and other assets would be safe from creditors.
Business owners who decide to incorporate also need to make sure it is clear to customers they are dealing with a corporation and not the individual personally. As a result, in my client’s case, he would need to update his business cards, website and any other business documents to ensure the company is listed and not him personally.
The second reason to incorporate is to keep more money in your jeans at the end of the year. To determine whether that is the case in your specific circumstance, you need to speak to your accountant. The question is, “Am I paying less tax if I am incorporated?”
One way corporations can help reduce tax is through a tax-efficient share structure. For example, my client could include his wife or kids as shareholders so they could split income to reduce the overall tax burden.
Another way corporations help reduce overall tax burdens is when the owners make more money than their expenses, they can leave funds in the corporation. Funds remaining within the corporation are taxed more efficiently and can be used for investment purposes going forward, for example, buying a rental property.
If you have any questions, please feel free to reach out to the writer at 778-478-8555 or by email at [email protected].
The information provided in this article does not, and is not intended to, constitute legal advice. All information and content are for general information purposes only.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
Wes Forgione - May 7, 2023 / 11:00 am | Story: 425219
Photo: Contributed
In my previous article, I discussed wills, which are the first document in a complete estate plan.
Contrary to popular belief, a will does not provide any legal authority to handle your affairs while you are alive. So, to provide authority for individuals to manage your affairs while you are still alive, two other documents are needed for a complete estate plan. These documents are the power of attorney and the representation agreement.
The power of attorney, often called a POA, grants an individual or individuals authority over your financial affairs. Unlike a will, which only applies if you are dead, a POA applies while you are alive. It also applies if you are not incapacitated, unless you specify otherwise.
We typically advise clients to not restrict a POA to incapacity, as it adds a layer of complexity for the individual named on the POA. POA’s can be abused, so it is important to choose individuals you trust, and if there are multiple individuals, you need to consider whether they can work well together.
The POA is important because your loved ones, including your spouse and children, have no authority over your financial affairs without it. For example, they would be unable to sell your home to assist with the costs of care, or to access your bank accounts or investments that are held solely in your name.
The representation agreement grants an individual or individuals authority over decisions relating to your health and well being. Like a POA, it only applies while you are alive and may apply if you are not incapacitated. The authority under a representation agreement is comprehensive and can include health decisions, well-being decisions and authority to access records. It also includes an end-of-life provision, which prevents medical professionals from administering heroic measures in the event there is limited or no prospect of recovery. Representation agreements also allow doctors to remove you from life-support if you have a limited, or no, prospect of recovery. Otherwise, they must keep you alive in a vegetative state.
Preparing the power of attorney and representation agreements in a timely manner is important. If you put off preparing these documents and lose capacity, they can no longer be prepared as you must have capacity to sign these documents.
I have dealt with many cases where individuals did not prepare these documents prior to losing capacity, and then tragedy struck, such as car accident, stroke or dementia. In those cases, the family was left scrambling to figure out how to deal with their loved one’s finances, health decisions and bills. The solution at that point is a very time-consuming and costly petition to the court known as “committeeship.”
If you have any questions, please feel free to reach out to me at 778-478-8555 or by email at [email protected]. You can also view my firm's website and profile here.
The information provided in this article does not, and is not intended to, constitute legal advice. All information and content is for general information purposes only.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
Wes Forgione - Apr 18, 2023 / 6:00 pm | Story: 421156
Photo: Contributed
Estate planning is a topic most people dread because they are forced to confront uncomfortable issues such as death, and its consequences. As a result, many people put off completing their estate plan and the issue nags at them for some time. Unfortunately, if you fail to prepare your estate plan it can cause considerable problems for your surviving family members. It can also prevent your estate from being distributed as per your wishes.
Estate planning is among my favourite areas of practice because I deliver peace of mind. My clients have reported feeling peace of mind that their spouse and children will inherit as per their wishes, rather than according to statutory law, eace of mind knowing their families will be able to care for them if they are incapacitated and no longer capable of managing their own affairs and peace of mind knowing young children will be looked after if their parents pass away.
A complete estate plan includes a will, power of attorney, and a representation agreement.
This article will focus on a discussion of the will. A will is a legal document that only becomes effective upon your death. It establishes some of the following:
Who will be the executor—An executor is an individual of your choosing who will carry out the wishes laid out in your will. Executors are bound to carry out the will as written. Choosing the right individual is important as there have been cases where executors attempt to deviate from what is written, it can cause problems for surviving loved ones.
Distribution of Assets—This may seem simple, but asset organization is critical to minimize the amount of probate tax paid by the estate. My clients and I have in-depth discussions about the organization of their assets to minimize probate tax. Many of our clients also have blended families and may require some additional assistance in this area.
Guardianship of minor children—The will is a vehicle which allows you to appoint an individual or individuals who will care for their children in the event they die. If this is not specified in your will, the public guardian and trustee will get involved with respect to placement of the minor children.
Final wishes—The will also describes the manner in which you will be laid to rest, whether it be by burial or cremation. The will may also specify the circumstances for any funeral or wake. The will may also specify whether you wish that your body be used for scientific purposes prior to being laid to rest.
While many wills are simple, they can become more complex. For example, if you hold shares in a private company, and want to avoid probate and probate tax for your loved ones on those shares, you should have two wills, One for your shares and for everything else.
People often ask me if they should do it themselves when it comes to writing a will. In my mind, individuals spend their entire lives building their wealth, as such, they should hire a professional to ensure that wealth is passed to their family members without issue. In my experience, online wills or “do-it-yourself” wills tend to cause confusion and have even on occasion been rejected by the courts.
If you have any questions, feel free to reach out to me at 778-478-8555 or by email at [email protected]. You can also view my firm’s website and profile here.
The information provided in this article does not, and is not intended to, constitute legal advice. All information and content are for general information purposes only.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
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