The Newfoundland and Labrador Wills Act sets out requirements for creating a legally valid will, and other requirements have been developed through cases involving wills decided through the court system. The person making a will, also known as the testator, must be at least 17 years of age and have legal capacity.
Capacity is a legal term meaning that a person has the mental ability at the time the will is made to understand the consequences of what they are doing in the will and the fact that they are making a legal document. Capacity has been interpreted by the courts to mean that the person making the will understands the type and amount of assets he or she is including in the will, and the fact that the will benefits some people and excludes other people from receiving assets.
Secondly, a will must be written.
If a person dies without a will, they are considered to have died intestate. In that case, their estate will be distributed according to the Newfoundland and Labrador Intestate Succession Act, which might be different from what they wanted had they made their own will.
One of the many requirements that may impact the validity of a will is that it must be written and properly executed.
The Wills Act states the following in relation to witnesses and signatures required to create a valid will:
“A will is invalid unless it is made in writing, and it is either in the handwriting of the testator, and signed by him or her, or, where not so written and signed, is signed by the testator in the presence of at least 2 witnesses, who shall, in the presence of the testator, sign the will as witnesses, and where the will is made by a person who cannot write, it must first be read over to or by the testator in the presence of the witnesses.”
A lawyer should be involved in directing this procedure.
A testator must appoint an executor in their will. The job of an executor is to control and protect the estate’s assets, pay off any debts, and distribute property as instructed by the will. In almost all cases, the executor will also have to go through the process of applying for a grant of probate for the will in Supreme Court. It is advisable that the executor consult with a lawyer to determine if the will is required to be probated.
The most important consideration for selecting an executor is choosing someone who is willing and able to take on the role. You may also wish to consider choosing an individual who lives close to you as your executor, as well as someone likely to outlive you. An executor has many duties and responsibilities and it can take years to completely distribute an estate, so it may be a good idea to select someone who would not need to travel frequently.
It is important for a testator to inform the person they choose to be the executor of this decision. An individual named as an executor has the right to refuse the role. Telling the person chosen to be executor prior to drafting the will allows the testator to select a different executor if the first person refuses the role. This could eliminate the need of going to court in the future. It is also important for the executor to be informed of the location of the original copy of the will so that they can easily locate it upon the testator’s death.
You may want to designate one or more alternate executors in your will. At the time of your death, the executor’s circumstances may have changed which prevents them from being an executor or they may have changed their mind about accepting the task. Also, if your executor predeceases you, then there will be no need to amend your will if an alternate executor is named.
A person often has many different types of assets, including bank accounts, investments, land, personal possessions, real estate, and others. It is important to understand your assets before deciding how to distribute your estate. There are two types of assets: non-estate and estate.
Non-Estate Assets
Non-estate assets are assets that are not distributed in your will. These types of assets typically pass automatically to specific individuals upon your death. As a result, you do not need to include them in your will.
A type of non-estate asset are assets that you own with another person(s) in joint tenancy. Assets you own in joint tenancy have a right of survivorship. This means that your share of ownership in the asset automatically passes to the surviving owner(s) upon your death. As an example, a family home that is considered to be a “matrimonial home” under the Newfoundland and Labrador Family Law Act will often be owned in joint tenancy and in many cases pass automatically to a surviving married spouse upon death of the other spouse.
Another type of non-estate asset are assets that designate beneficiaries. An example of this includes insurance policies, where a beneficiary of that asset is selected. Assets such as this automatically pass to the designated beneficiary upon death.
It is strongly advised to check with a lawyer about what assets need to be included in your will. Keep in mind that in some cases, joint bank accounts may be determined by a court to be estate assets, depending on how that bank account was used and the intention of the primary account holder. In some cases, the account may not automatically pass over to the other person named on the account, but would have to be distributed to beneficiaries through a will or through the Intestate Succession Act.
Estate Assets
Estate assets are part of your estate and are to be distributed as part of your will. These types of assets can be gifted to any individual or organization of your choosing.
A type of estate asset includes assets that are in your own name. Another type of estate asset is an asset that you own as a tenant in common. Owning an asset as a tenant in common means that you own an individual and undivided share in the asset. Owning an asset in this manner means you have the right to transfer ownership of your share by deed, will, or other conveyance. The right of survivorship, where an asset would pass automatically to a joint tenant upon death, does not apply to assets owned as a tenant in common.
Before the executor can distribute your estate to your beneficiaries, they need to ensure that all of your outstanding debts, expenses, and income tax are paid in full. It is important to consider your debts, expenses, and income tax before you decide on the distribution of your estate and the person you choose as executor. Consulting with a financial advisor regarding this might be helpful.
When deciding how you would like the executor to distribute your assets, keep in mind that there are options.
You may want to gift an asset directly to a beneficiary. This involves the executor giving the asset to the beneficiary as soon as legally possible, which generally means after the will has been probated.
Another option is to put the asset in trust, which involves the executor (or trust company) holding the asset in trust until the moment that your will describes as the appropriate time to give the asset to the beneficiary. The distribution of an asset in the form of a trust is often used when the beneficiary is a minor or lacks mental capacity.
Lastly, there is an option to transfer your asset to a beneficiary in the form of a life estate. A life estate distributes an asset to a beneficiary for their use and enjoyment during their lifetime with a provision that upon their death, the asset goes to someone else. As an example, an individual who ultimately wants their child to own their home but wanted their sister to have a place to live until she dies may elect to transfer the asset to their sister in the form of a life estate.
If you want to create a trust for someone, such as a minor, this will create new duties and responsibilities for the executor as they must set up and manage the trust until the minor reaches a certain age where they receive full control of the asset. These duties will continue as long as the trust exists. Typically, an executor’s duties will end once the estate has been distributed.
If you’re interested in creating a trust for any beneficiaries that are minors or mentally incompetent at the time of your death, you may want to consider appointing a separate person or a trust company to act as a trustee for the minor or mentally incompetent beneficiaries. You are strongly encouraged to consult with a lawyer and obtain legal advice if you are interested in setting up a trust.
Wills are typically known for outlining the distribution of an individual’s estate, but wills are also important for decisions such as guardianship. If you have minor children or other dependents, then a will can designate individuals as their guardians. It is important to note that any decisions about the custody of minor children must ultimately be in the best interests of those children, and could potentially be challenged and changed by a court.
A Power of Attorney is a legal document that gives another person the legal authority to act on your behalf in relation to your finances while you are living and still have capacity. This power can be granted for a specific period of time and for specific financial tasks, or it can be very general. Note that the Power of Attorney deals only with financial matters, and does not involve decisions about health care treatment or the authority to deal with a person’s estate after they die.
An Enduring Power of Attorney is a specific type of Power of Attorney meant to be exercised after the person granting the power of attorney loses his or her legal capacity. Completing this document and granting this power gives someone else the authority to handle your finances if you no longer have the mental capacity to understand the effects of your decisions and actions related to your financial affairs.
Note that an Enduring Power of Attorney may be its own separate document, or may be included as part of a General Power of Attorney, as long as language is included to make the Power of Attorney enduring and allow it to continue having effect after the donor (the person making the document) loses capacity.
In Newfoundland and Labrador, the Enduring Powers of Attorney Act sets out the basic requirements for creating an Enduring Power of Attorney document.
Requirements
Some of the requirements for creating a legally valid Enduring Power of Attorney in Newfoundland and Labrador include that the document must be:
The primary aim of the Enduring Power of Attorney is to name someone who will act as attorney and manage your financial affairs when you are no longer able to do so because of the loss of legal capacity. This person must be at least 19 years of age or older.
As well, you may be as specific or as general as you wish in the Enduring Power of Attorney in terms of granting authority to the person acting as your attorney. What this means is that you may grant the attorney authority to handle all of your financial affairs or you might restrict the power to only certain areas and transactions. For example, a power of attorney might be completed only to allow someone else to sell your house on your behalf, but to do nothing else when it comes to your finances.
Please note that you may cancel or revoke any Enduring Power of Attorney documents you have made, as long as you still have the legal capacity to do so.
Note as well that these requirements are related to creating a legally valid Enduring Power of Attorney under the Enduring Powers of Attorney Act of Newfoundland and Labrador. Individual financial institutions, such as banks, may have their own policies, procedures, and forms for creating an Enduring Power of Attorney or General Power of Attorney for use at that institution. It is recommended to check with banks, financial institutions, or other locations where an Enduring Power of Attorney may be used to ensure that the specific policies and requirements for that institution are met.
An Advance Health Care Directive is a legal document that allows a person to write down instructions for their medical care for a future time when they have lost the competence to make or communicate their own healthcare decisions. This document also allows a person to appoint a Substitute Decision Maker who can make health-care decisions on behalf of that person, as well as to communicate with medical professionals.
The requirements for creating a legally valid Advance Health Care Directive can be found in the Newfoundland and Labrador Advance Health Care Directives Act.
A valid Advance Health Care Directive may only be created by a person 16 years of age or older who is competent to make their own health care decisions at the time the document is created. The Advance Health Care Directive must be in writing, signed by the person making the document, and also signed by 2 independent witnesses. An independent witness is someone other than the person appointed as Substitute Decision Maker or that person’s spouse.
If the person making the Advance Health Care Directive is unable to sign it themselves, they may make a mark other than their signature as a substitute, as long as this is done in the presence of 2 independent witnesses. The person making the document may also direct another person to sign the Advance Health Care Directive for them, as long as the person signing is not the Substitute Decision Maker or that person’s spouse. The signature occurs in the presence of the person making the Advance Health Care Directive and 2 independent witnesses, and the 2 independent witnesses attest to witnessing the signature.
Also note that the person appointed as Substitute Decision Maker must accept that responsibility in writing. The Substitute Decision Maker must also be 19 years of age or older.