Chapter 15: Estate Planning Flashcards
What is estate planning?
A process to manage your property during life and distribute it after death according to your wishes. It includes planning for taxes, guardianship of dependents, and avoiding family conflict.
What are the two key parts of estate planning?
1) Building your estate (savings, investments, insurance)
2) Transferring your estate at death as you specify
What happens if you die without a will (intestate)?
The provincial government distributes your estate according to legal rules, not necessarily how you would have wanted.
What is a will?
A legal document stating how your property should be distributed after your death.
How does marriage or divorce affect a will?
- Marriage voids an existing will in many provinces
- Divorce may revoke parts of a will
- Always update your will after major life changes
What are the three main types of wills?
Holographic: Handwritten and signed (not legal in all provinces)
Formal: Typed, signed, and witnessed (most common)
Notarial: Used in Quebec, signed with notary, no probate needed
What is probate?
A legal process to prove a will is valid and oversee distribution of the estate.
Who is an executor and what do they do?
A person responsible for carrying out the instructions in the will. Duties include:
- Collecting assets
- Paying debts
- Filing taxes
- Distributing estate
- Reporting to probate court
What is a trustee?
Someone who holds and manages assets on behalf of another person under a trust agreement.
What is a codicil?
A legal document used to make changes to an existing will.
What is a living will?
A document stating your wishes regarding medical care if you become terminally ill or unable to communicate.
What is a power of attorney?
A legal document that gives someone the authority to act on your behalf if you’re incapacitated.
What is a letter of last instruction?
A non-legal document that provides heirs with personal info like funeral preferences, account details, and contacts.
What is a trust?
A legal arrangement where a trustee holds assets for the benefit of someone else. Created by a settlor (or grantor).
What are the main types of trusts?
Living (Inter Vivos) Trust: Created during your lifetime
Testamentary Trust: Created in your will and activated at death
Spousal Trust: Income goes to surviving spouse; capital preserved
