Wills & Estate planning is especially important for small business owners who own property and assets. It’s also a critical part of planning for your family’s future.
In the unfortunate event of your death, injury, or incapacity, having a proper plan in place will protect your business and assets against any unwanted or haphazard action against your wishes.
What exactly happens if you don’t have a Will?
When an individual passes away without any written estate instructions, they become what’s known as an intestate. As a result, the estate will be divided up according to the laws of the province you lived in.
In British Columbia, your assets will be distributed to your next of kin in accordance with “parentelic distribution”. Though every family circumstance is different, the general priority of parentelic distribution can be summed up as follows:
- spouse and children (with specific distribution among them depending on the family circumstances;
- if no spouse and children, to lineal descendants (grandchildren, great grandchildren, etc.);
- if none of the above survive, to parents;
- if none of the above survive, to siblings;
- if none of the above survive, to nieces and nephews (or failing them, their lineal descendants); and it carries on in the same manner.
Without clear instructions, there may also be delays and additional expenses for your survivors. With a Will, you’ll ensure that those you leave your assets and business to will have a smoother process.
What should you know before you start your estate plan?
Creating an estate plan for yourself is incredibly beneficial, but can be quite complex. That’s why we’ve prepared a list of 10 terms every business owner should know to better prepare you for creating your Will:
The individual who has been assigned to take responsibility for managing money or assets that have been set aside in a trust for the named beneficiary/beneficiaries. They are responsible for dealing with specific assets such as managing investments and property, distributing trust assets to the beneficiaries and preparing records.
The person you have assigned to carry out the instructions in your Will when you die. Their responsibilities may include ensuring your estate is handled in compliance with the law, managing the affairs and expenses of your estate, distributing assets to your beneficiaries and filing tax returns.
(Note that the roles of Trustee and Executor go hand in hand, except for extenuating circumstances, the Trustee and Executor should generally be the same person.)
3. Power of Attorney:
This specific legal document enables one adult to give another person the authority to make legal and financial decisions on their behalf during their lifetime.
4. Representation Agreement:
A legal document to authorize an individual to assist an adult or act on their behalf for personal and health care matters during their lifetime.
(Though closely related to Wills and estate planning, Powers of Attorney and Representation Agreements are both documents used during the lifetime of a granting adult. These are the staple documents of “incapacity planning”, as they are primarily used when an adult suffers great illness or injury that renders them incapable of managing their own affairs.)
A form of possession of property where a person (trustee) holds legal title to the property for the benefit of another individual (beneficiary). Trusts are often a vital tool in estate planning and wealth management.
All property and belongings an individual owns upon their death, not including property owned with another individual in joint tenancy.
The individual who will receive money or property in a Will, benefit plan, or insurance policy.
8. Advance Directive:
Instructions for an individual’s wishes for their healthcare in the case that they are unable to make that decision themselves.
Wills, estate planning, and incapacity planning are important for the future of your business and family. Working with a Vancouver small business lawyer will ensure that the process runs smoothly and all your documents are accurate. If you have any further questions, we are here to help. Please don’t hesitate to contact us today!