Power of Attorney and Will Tips for Canadian Snowbirds
Thursday Aug 15th, 2019
Wills and powers of attorneys aren’t just for the wealthy - they are essential legal documents everyone should have, as they dictate how you or your assets are to be cared for or dealt with in the event you pass away or become incapacitated.
A properly drafted and executed will (or wills) ensures that your assets are distributed, and your minor children are taken care of, according to your wishes in the event of your death. Powers of attorney are equally important documents that authorize another person to act on your behalf when you can’t during your lifetime.
For Canadian snowbirds who spend their winters in the U.S., and especially those who own property in the U.S., it is important to be aware that your wills and the powers of attorneys are subject to different laws in different jurisdictions and may be subject to different requirements in the United States. Accordingly, it is highly advisable that snowbirds seek legal advice to make sure that their wills and powers of attorney conform to the requirements of the U.S. state where they spend their time and own property.
Depending on your personal situation, you may even consider creating U.S. versions of these documents to avoid running into issues, and, perhaps most importantly, to avoid inflicting further pain on the family members who will be acting on your behalf.
Below is an overview of the purpose of each document, the enforceability of the Canadian version of the document in the U.S. and when Canadians should consider getting a U.S. version as well.
What is a Will?
A will is a legal document through which you direct the distribution of your assets upon your death. If you have any minor children, you should also include a direction for the care of your minor children in the will.
It is not necessary for all of your assets to be covered by your will. For example, properties you own as a joint tenant with right of survivorship, life insurance proceeds and certain contracts with payable-on-death provisions such as RRSPs, can be passed on to the designated beneficiaries without the will.
If you do not have a valid will or otherwise dispose of your property by other means - such as those described above - you are essentially agreeing to the personal estate plan created by the government. That is, you are letting the government dictate who gets what in the event of your death.
Generally, the disposition of your personal assets is governed by the law of the jurisdiction where you are a resident at death, while the disposition of your real property (i.e. real estate, house, and condo) is governed by the law of the jurisdiction where your real property is located.
If you die without a will, your wishes will be that of the state’s, which may not reflect your actual wishes. Further, and perhaps more importantly, in addition to grieving your death, your family will have to go through the pain of the probate process and most likely incur extra time, money and hassle.
When Should Canadian Snowbirds Get a U.S. Will?
It is not uncommon for Canadian snowbirds to invest in a condo or a house in Florida, Arizona or other warm states to seek shelter from the brutal Canadian winters.
Consider the following example:
Larry, an Ontario resident, owns a condo in Miami. When Larry dies, his Ontario will is subject to probate in Ontario, as well as a separate ancillary probate in Florida if his condo is not otherwise dealt with by non-probate transfers, such as joint tenants with a right of survivorship.
So, in addition to dealing with the already burdensome probate process in Ontario, Larry’s executor will also have to deal with the Florida probate process, search for and hire a Florida attorney to help with the probate and may have to attend probate proceedings in Florida, resulting in additional time and cost.
A single will executed in Ontario by Larry covering his worldwide assets may be sufficient. However, Larry’s executor may run into some difficulties if the will doesn’t comply with Florida’s legal requirements, as a will needs to comply with the requirements of a jurisdiction in order to be probated in that jurisdiction. Alternatively, Larry could consider creating a second limited will in Florida naming someone local as his executor specifically to deal with his assets in Florida.
So when it comes to creating a will, you have two options:
- Create one will which complies with the laws of every jurisdiction in which your properties are located; or
- Create separate, limited wills for each jurisdiction in which you own properties.
Your particular situation will determine which option would be more suitable for your circumstances.
Powers of Attorney
What is a Power of Attorney?
A power of attorney is a legal document where a person gives authority to another person to act on his or her behalf. Here are a few important points to keep in mind about powers of attorneys:
- Unlike wills, powers of attorneys are only effective while the person who created such powers is alive.
- A power of attorney can be general or may be limited to specific assets and/or acts and dates.
- Where a person is acting with respect to another’s financial affairs, a power of attorney for propertyis created.
- Where a person is making health care decision for another, a power of attorney for personal care is created.
When Should Canadian Snowbirds Get a U.S. Power of Attorney?
As with a will, Canadian snowbirds should consider whether having a separate power of attorney would be beneficial.
Generally, the best practice is to have a separate, limited power of attorney executed in the U.S. state where you spend your winter because content, witness and notarization requirements can vary from state to state.
Your power of attorney must conform to these requirements for your attorney to be able to act on your behalf in that state, and a power of attorney executed in your home province in Canada may not meet these requirements.
It is advisable to consult a legal professional when preparing and executing a power of attorney.
What is a Living Will?
A living will is often confused for a power of attorney for personal/health care, but there are differences.
A power of attorney for personal/health care lets you name another individual as your agent to make health care decisions for you if you become incapable of making your own decisions or if you want someone else to make those decisions for you now even though you are still capable.
A living will, on the other hand, is a document containing specific instructions about any aspect of your health care, whether or not you appoint an agent. Often, a living will contains directives concerning the termination of medical treatment.
One important note about a living will is that it can be either be a separate document or part of a power of attorney for personal/health care.
When Should Canadian Snowbirds Get a U.S. Living Will?
Almost all states have living will statutes with different particulars and often provide forms and specific language which must be used. So the answer is yes. If you are a Canadian snowbird who spends a significant amount of time stateside, you should get a U.S. living will which conforms to the requirements of the state you spend your time in.