As we end the year, this is a time for reflection and planning for the coming year. With some of the families with whom I work, often they try to address some of the more complicated aspects of succession (governance, estate freezes, family employment) before setting in place the basics. I have previously spoken about starting the succession plan and some of the best ways / best practices to do this.
What are these essential basics? In my view, there are three key documents to put in place before all else. These documents are intended to provide you some certainty and comfort in case you are faced with a health issue or worse, your untimely passing.
The three foundational documents:
1. your will
2. power of attorney
3. representation agreement
Your will is something well-known and sets out your wishes on how your estate assets will be divided amongst your beneficiaries. You can include plenty of provisions in the will to enable you to attempt to control your assets beyond the grave. The power of attorney allows another person to act in your stead, either completely or in some limited way as set out in the agreement, and comes into effect based on the terms and conditions set out in the power of attorney. This P of A is essential to allow access to accounts and an orderly conduct of your business affairs by a trusted person. The representation agreement gives direction to a person on the handling of your health and other care, in the situation where you become incapacitated.
Each jurisdiction has rules of applicability around these three documents so you should seek qualified advice of a person familiar with these documents from the area in which you live and/or the place in which you hold your assets.
Learn, think, apply!