Estate planning involves the transfer of someone’s assets, such as property or money, when they die. It also addresses a variety of other personal matters. Wills, estates, trusts, and power of attorney are all common tools used in estate planning. The following definitions are provided by the Ontario Ministry of the Attorney General to describe in detail each of these estate planning tools.
What is a will?
- A person’s will is a written document that sets out the person’s wishes about how his or her estate should be taken care of and distributed after death. It takes effect when the person dies. It also directs who you want to take care of any dependents you may have.
What is an estate?
- An estate is the property that a person owns or has a legal interest in. The term is often used to describe the assets and liabilities left by a person after death.
What is a trust?
- A trust is created to hold property or assets for the benefit of a particular person called the beneficiary. It is managed by a person called a trustee, who has an obligation to deal with the property for the beneficiary of the trust. There are many different kinds of trusts.
What is a power of attorney?
- A power of attorney is a legal document that gives someone else the right to act on your behalf to make financial decisions, or personal care and health decisions it you are unable to. Many people believe their families will be able to step in if something happens and they cannot make decisions for themselves, but this isn’t always true. The government may assign someone to make certain decisions for you, so it is usually better to make this decision yourself.1