7 legal documents to have ready at retirement

Paperwork is a part of life, and retirement is no exception. This includes a variety of legal documents that are suggested an individual have on hand to assist with the administration of their affairs.

1. Will

A sound estate plan almost always involves a will.

A will is an individual’s chance to express their wishes with respect to their estate distribution. It can also assist in reducing delays and costs associated with conflict or intestate succession.

Without one, an estate is settled according to the intestate laws of the province. Given that most people would rather designate their own executors, trustees and beneficiaries, a will is a must-have. And some may want to consult a professional.

By having a will drafted and executed by an experienced estate lawyer, not only can they benefit from expert advice, but they’ll also potentially avoid the errors that may occur with a holograph will or standard “do-it-yourself” will.

2. Health-care directive

Health-care directives (also known as personal directives, power of attorney for personal care, representation agreement and living will) also contribute to a sound estate plan.

As Canadians age and their medical requirements progress, it’s important to appoint a substitute decision-maker and provide clear directions with respect to their health and personal care.

Who they choose is equally important to help ensure that medical, health care and personal care decisions continue to reflect their wishes in the event of incapacity.

It’s best to have a properly drafted and executed directive in case of incapacity, as opposed to relying upon your province’s guardianship rules which can be timely and costly.

3. General or specific power of attorney

Unlike a health-care directive, a general power of attorney addresses property and financial affairs. This document can be effective as soon as it’s signed or, in some provinces, upon incapacity (sometimes known as a “springing power of attorney”).

Through this document, they designate an authorized representative (known as an “attorney”) to act on their behalf, recommending a cautious approach.

This document can provide an attorney with great power over an individual’s property and financial affairs. Although an attorney is required to act in their best interests, they need to select someone they trust fully, as this document is typically used when they’re unable to handle their own affairs.

A power of attorney can also be specific, meaning that it deals with one very specific power or is limited in time.

Snowbirds may choose to appoint one or more of their children to act on their behalf while they’re out of the country. Or there may be individuals who want to limit the attorney to certain events, such as selling their house or accessing investments in case of an emergency.

4. Copy of marriage contract

A marriage contract can set out the rights and obligations of each spouse with respect to division of assets upon death. Each province has its own matrimonial property laws that apply in the absence of an agreement.

If they wish to protect specific property or interests, a marriage contract can assist in setting out the specific terms or division they agreed on.

5. Cohabitation agreement

For some individuals, separation or divorce in their younger years means they’ll experience retirement with a new spouse, often a common-law partner. If they’re not subject to matrimonial laws or have little protection from provincial marital property laws, individuals living common-law may want to consider a cohabitation agreement to set out the financial terms and conditions of their relationship.

6. Acknowledgement of debt or promissory note

Individuals who lend money to children or other family members may want the borrower to sign an acknowledgement of debt or promissory note so the loan isn’t lost or overlooked if the individual dies. This type of document doesn’t necessarily have to be drafted by a lawyer but having it drawn and notarized can formalize the agreement as proof for the executor.

Wills of some individual’s may include reference to a debt. However, debt can be paid and circumstances can change. With a signed acknowledgement of debt or promissory note, the executor can confirm the amount outstanding and collect the debt on behalf of the estate more easily.

7. Inventory of assets

For soon-to-retire individuals with substantial assets, an “inventory of assets” – or an inventory of their property, is recommended. Although not a formal legal document, an inventory of property, in conjunction with their other estate documents, can make it easier for an executor or attorney to carry out their respective duties.

This type of document is also a good place for individuals to identify the financial institutions where their assets are located. They can record the numbers of any life insurance contracts they have in force. It’s also recommend they include contact information for their lawyer, accountant, financial advisor and other people who can assist the executor or attorney in easily settling the estate or handling financial affairs.