Estate and incapacity planning can be confusing, especially with so many legal terms and documents to understand. Three of the most fundamental instruments in British Columbia—a will, an advance directive, and a trust—are often discussed together, but they each serve a distinct and important purpose. Understanding the differences between them is crucial for creating a comprehensive plan that protects you and your family.
The Will: For After You’re Gone
A will is a legal document that speaks only after your death. Its primary purpose is to outline how your property and assets should be distributed, to appoint a guardian for any minor children, and to name an executor who will be responsible for carrying out your wishes. A will is governed by the Wills, Estates and Succession Act (WESA) in BC and must be created with specific formalities—in writing, signed, and witnessed by two non-beneficiaries. While it is a cornerstone of estate planning, a will has no legal effect whatsoever during your lifetime and cannot be used to manage your affairs if you become incapacitated.
The Advance Directive: For Your Health in the Present
An advance directive is a document that operates during your lifetime, but only if you become incapable of making your own health care decisions. Governed by the Health Care (Consent) and Care Facility (Admission) Act, this document provides binding instructions to your health care providers. It allows you to give or refuse consent to specific treatments in advance, such as life support or resuscitation, ensuring your wishes are followed in a medical crisis. It is a common mistake to refer to this as a “living will,” as that term is not used in BC legislation. Unlike a power of attorney, an advance directive does not appoint someone to make decisions for you; it provides direct instructions. It has no authority over financial or property matters.
The Trust: For Managing Your Assets
A trust is a highly flexible legal arrangement for managing assets for the benefit of others. It involves a “settlor” who transfers property to a “trustee” to hold and manage for a “beneficiary,” all according to the terms of the trust document. A trust can be created during your lifetime (inter vivos) or through your will (testamentary) to take effect after your death. Governed primarily by common law and the Trustee Act, trusts are powerful tools for asset management, tax planning, and protecting assets for minors or beneficiaries with special needs. While a trust is an excellent way to manage and protect assets, it does not directly address health care or personal care decisions.
Important Caveats
It’s vital to remember that these three documents are not substitutes for one another; they are complementary tools that work together to form a holistic estate and incapacity plan. For example, a will directs the distribution of your assets, a family trust can be used for more complex estates, and an advance directive guides your medical care. All three documents have specific execution requirements, and failure to comply can render them invalid. For this reason, it is always recommended to seek legal advice to ensure your planning documents are properly prepared and fully reflect your wishes.
Ready to secure your future? Northam Law provides comprehensive services for all of your estate planning needs. Get started by calling us at 604-630-2350 or emailing admin@northam-law.com.
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