Protecting one’s assets must also include looking at existing legal documents and determining whether they will be enforceable after crossing into the United States or another country. A power of attorney for property and personal care executed in Canada may not be enforceable in the U.S. This legal document gives the person or persons of your choice the ability to manage your affairs. A sister document in most jurisdictions relates to personal care, commonly referred to as a living will.
“[Pre-]death situations are highly jurisdictional, much more than after death. Specifically, every single state, every single province has its own version of power of attorney,” says wills and estates lawyer Barry Fish of the Toronto-based law firm Fish and Associates.
Therefore, relatives and friends who have been asked to make difficult decisions on someone’s behalf regarding property and personal care could encounter blank faces in U.S. courts when trying to access bank accounts, sell property or make medical decisions. Fish suggests snowbirds draft a power-of-attorney document specific to the jurisdiction they are in during the winter months. In order not to invalidate the more important power of attorney document back in Canada, Fish makes sure all secondary power-of-attorney documents have a non-revocation clause.
One’s last will and testament is more portable, but Fish also advises that a separate document be written to cover assets and other matters in the United States.
“If you are caught in a situation with Florida property, the ideal would to have a separate will for the Florida property. But an Ontario will would be respected. Definitely speak to a Florida lawyer and draft a will that does not revoke your Ontario will,” says Fish.
Insurance products – including travel insurance – are becoming an increasingly important strategy for bulletproofing one’s assets in cases of accidents, decline of health or death.
“When you buy a life insurance policy, whether it’s a travel policy, a true life policy, a critical illness policy you are required to be a Canadian resident and present in Canada when you purchase it,” says Michael Brattman, vice president of Waterloo, Ont.-based The McLennan Group (www.themclennangroup.com). [Brattman has since left the company.]
“When you die, you can be anywhere in the world. So if one moves to Florida permanently or for a day and dies, the insurance carrier will pay out.”
Brattman reminds clients that life insurance normally does not cover the repatriation of the deceased while travel insurance will cover this cost.
But as the Wilsons learned, financial security also means taking care of the small things. Stephen Smith of Port Hope, Ont.-based Yorkminster Insurance Brokers Limited, says that life and other insurance policies often lapse because insurance premium bills sit unpaid in mailboxes of Canadians who are out of the country. An automated debit system from one’s bank account is the best way to avoid this.
It is also prudent to develop an investment portfolio that does not require out-of-country directives. Residency and rules governing financial services jurisdictions could prevent snowbirds from giving long-distance instructions.
