Have You Been Disinherited?

,

When You Have Been Disinherited: Understanding Your Legal Options in British Columbia

Individuals have broad freedom to decide how their assets are distributed. However, being disinherited can come as a shock, especially when it comes to family. You may have expected to receive something from a parent, spouse, or other close family member, only to discover that their will leaves you little or nothing at all. Alternatively, you may be included in a close family member’s will, but later learn that a key asset was transferred to another individual before the family member’s passing, rendering the will’s provisions largely ineffective.

In British Columbia, however, disinheritance does not always mean the end of the story. The law provides important protections for certain family members and offers legal options that may allow you to challenge a will or seek a fairer outcome.

Understanding your rights is the first step toward deciding what to do next.

What Does It Mean to Be Disinherited?

Disinheritance occurs when a person who might reasonably expect to benefit from a deceased person’s estate is either completely excluded from the will or left with a very small gift. In BC, disputes often arise when spouses or adult children are left out, especially where the will seems unfair or inconsistent with the deceased’s family obligations.

While people generally have the freedom to decide how to distribute their assets, BC law places limits on that freedom to protect close family members from unfair treatment.

Wills and Estate Law in British Columbia

In BC, wills and estates are governed primarily by the Wills, Estates and Succession Act (“WESA”). This legislation sets out the rules for how estates are distributed, how wills can be challenged, and who may bring a claim.

One of the most significant features of BC law is that it allows courts to intervene when a will does not make “adequate provision” for a deceased person’s spouse or children. This makes BC different from many other jurisdictions where adult children have little or no ability to challenge a will.

Rights of Spouses Who Have Been Disinherited

Spouses have strong legal protections in BC. Under WESA, a spouse includes:

  • A legally married spouse, or
  • A common-law partner who lived in a marriage-like relationship with the deceased for at least two years immediately before death

If you are a spouse who has been disinherited, you may bring a wills variation claim. The court has the power to change the terms of the will to ensure that you receive what is considered “adequate, just, and equitable” in the circumstances.

In deciding whether a will is unfair to a spouse, the court considers factors such as:

  • The length and nature of the relationship
  • The financial dependence between spouses
  • The contributions made during the relationship
  • The size of the estate

Rights of Children Who Have Been Disinherited

Children, both minor and adult, also have the right to challenge a will in BC. This is a unique feature of BC law, as many places only protect dependent or minor children. The law also applies to both natural and adopted children.

If you are a child of the deceased and have been disinherited, you may be able to bring a wills variation claim arguing that the deceased failed to meet their moral or legal obligations to you.

Courts consider several factors when assessing a child’s claim, including:

  • The nature of the parent-child relationship
  • Any estrangement and who was responsible for it
  • The child’s financial circumstances and needs
  • Contributions made by the child to the deceased
  • The reasons the deceased gave (if any) for disinheriting the child

Importantly, parents are allowed to disinherit children, but they must have valid and rational reasons. If a will is silent or the reasons appear unreasonable, courts may intervene to provide a provision for a disinherited child.

Time Limits Matter

If you are considering legal action, timing is critical. In most cases, a wills variation claim must be started within 180 days of the grant of probate or administration. Missing this deadline can mean losing your right to challenge the will altogether.

Because estates can move quickly, it is wise to seek legal advice as soon as you become aware of the disinheritance.

Resulting Trust Claims: Why They Matter in BC Estate Litigation

A resulting trust is a legal concept that can apply when someone transfers property or money to another person during their lifetime, but does not truly intend to give it away as a gift. Even though the asset may be in someone else’s name, the law may treat it as still belonging to the original owner, or, after death, to their estate.

In estate disputes, resulting trusts often come up when a parent or other family member puts a home, bank account, or investment into another person’s name before they die. While this can make it seem like the asset no longer forms part of the estate, a court may decide otherwise if there is no clear evidence that the transfer was meant to be a gift.

This is important because assets held in a resulting trust can be brought back into the estate. Once returned, they may be available to all beneficiaries named in a will, or spouses or children who are making claims that they were treated unfairly under a will. As a result, resulting trusts can significantly change the size of an estate and how it is ultimately divided.

In British Columbia, courts often start with the assumption that transfers to adult children are not gifts unless there is clear proof of a different intention. Because of this, resulting trusts are an important issue to consider whenever assets appear to have been moved out of an estate shortly before someone’s death.

What If There Is No Will?

If someone dies without a valid will (known as dying “intestate”), WESA provides a default scheme for how the estate is distributed. Spouses and children are prioritized, and in many cases, a spouse will receive a significant portion of the estate before children inherit anything.

In these situations, disinheritance is less likely, but disputes can still arise over who qualifies as a spouse or child.

Challenging the Validity of the Will

In addition to wills variation claims, you may be able to challenge the validity of the will itself. This can happen if there are concerns that:

  • The deceased lacked mental capacity when the will was made
  • The deceased was unduly influenced or pressured
  • The will was not properly signed or witnessed

If a will is found to be invalid, an earlier will may take effect, or the estate may be distributed under intestacy rules.

Practical Steps If You’ve Been Disinherited

If you believe you have been unfairly disinherited, consider the following steps:

  1. Obtain a copy of the will and probate documents
  2. Take note of key dates, such as dates of death, transfers of property, as well as any key deadlines
  3. Gather information about your relationship with the deceased
  4. Seek advice from a lawyer experienced in BC estate litigation

While the ultimate recourse in BC estate litigation cases is a trial before a Supreme Court Judge, many disputes are resolved through negotiation or mediation, avoiding lengthy and costly court proceedings. When considering whether this option is best, it is important to consider all factors including the timing of a potential mediation. And experienced BC estate litigation lawyer will be able to guide you in the right direction on this front, and line up skilled and trustworthy mediators to assist in resolving the dispute.

Final Thoughts

Being disinherited can feel deeply personal, but it is also a legal issue with clear rights and remedies in British Columbia. The law recognizes that spouses and children often have legitimate expectations and moral claims, even when a will says otherwise.

Understanding your legal options can help you make informed decisions, protect your interests, and pursue a resolution that reflects fairness and justice under BC law.

Anthony Eden is a lawyer at Nixon Wenger that focuses on estate litigation and civil litigation, helping clients navigate complex legal challenges with clarity and strategic focus. His civil litigation practice covers a wide range of disputes.

 

Image of Anthony Eden, Estate Litigation Lawyer

Estate Litigation Lawyer Anthony Eden

 

Trying to find missing beneficiaries

,

(or, how to deal with a receding heir line) Written by Andrew Powell, Partner One of the main functions of an executor or estate administrator is locating heirs and other people who may benefit from the estate – these people need notice that someone has died.   Under s.121 of the Wills, Estates and Succession […]

Read more

Deceased does not mean debt free

, ,

 

You may be forgiven for thinking that, once you pass away, your earthly cares are over.  In British Columbia, however, the mere fact that you have died will not necessarily save you from being sued.

Many causes of action will survive the death of a defendant.  If you die owing money, then that debt is still owing, and still collectible from your estate after your death.  Your creditor’s security will still be sound, and your estate will have to either pay the bill or risk judgment and collections.

Actions against a deceased person are governed by Rule 20-6 of the Supreme Court Rules and by s.150 of the Wills, Estates and Succession Act.  Rule 20-6 provides instruction for how person with a claim against a deceased person may bring that claim against the deceased’s estate.  If there is no personal representative, then the claimant may apply to have a litigation guardian appointed for the estate in order for there to be someone to sue; or, the claimant may apply to permit the matter to proceed in the absence of a personal representative of the estate.

But there is an easier way.

Notwithstanding Rule 20-6, there is specific statutory authority to bring actions against the estates of deceased people, whether the estates are being actively administered or not: you may simply sue the deceased person in their own name.

Section 150 of the Wills, Estates and Succession Act (called “WESA”) provides authority for proceedings taken by or against estates.  After confirming, in subsection (1), that the death of a party will not annul a legal proceeding, the section provides as follows:
150   (5) A person may commence or continue a proceeding against a deceased person that could have been commenced or continued against the deceased person if living, whether or not a personal representative has been appointed for the deceased person.
(6) A proceeding under subsection (5) may be commenced naming as defendant or respondent
(a) the personal representative, if any, or
(b) the deceased person.
(7) A proceeding under subsection (5) in which the deceased person is named as defendant or respondent is valid despite the fact that the deceased person is not living when the action or proceeding is commenced.
(8) All proceedings under this section bind the estate of the deceased person, despite any previous or subsequent appointment of a personal representative.

In other words, you can take action directly against a deceased person, by suing them in their own name.

I have personally used this section to start proceedings against people who have passed away but whose estates were not being administered by executors.  It is simple to start the proceeding, and requires no application.  However, when the time eventually comes to serve documents on the deceased person, then you can run into some tricky business.  It will not do to simply affix your documents to the cemetery gate.  You will have to find an alternate service method somehow – for instance by applying to serve the people who might be expected to benefit from the estate.

So deceased people can be sued, certainly.  But they can also sue.  Estate representatives are entitled to bring actions in the name of the deceased.  Section 150 of WESA also provides:

“Subject to this section, the personal representative of a deceased person may commence or continue a proceeding the deceased person could have commenced or continued, with the same rights and remedies to which the deceased person would have been entitled, if living.”

There are statutory and common law restrictions to the right to sue on behalf of a deceased person.  You can still sue for money owed or for the return of property, so your estate’s financial claims will be available.  But an estate cannot sue for libel, or for breach of privacy.  An estate cannot claim remedies for breaches of Charter rights or human rights, and cannot collect punitive or aggravated damages.  In short: money actions are permitted, but all those types of actions that reward damages for pain and suffering, indignity, and hurt feelings are no longer available as claims.

The law, it appears, assumes that once you have died, you are strictly business, and no longer take things personally.
Andrew Powell practices a wide range of civil litigation with a focus on business or commercial disputes, including breach of contract, lease and land use issues, corporate disputes including liquidations and shareholder issues, and realization and enforcement. Andrew also practices estate litigation, including wills variation claims.

Can I stipulate how my ex spends child support payments?

, ,

Imagine this not too uncommon scenario …
You pay child support to your ex spouse.  But, you are concerned about your ex’s spending habits. You go on social media and see your ex taking selfies at the mall, bragging about buying the newest (most expensive) gadgets. You see your ex is driving a brand new vehicle. She, or he, even goes on vacations to luxurious resorts. You are likely concerned that the child support payments that you are making are not being used for the children but rather for your ex’s expensive lifestyle.  

What can you do?

The short answer is … not much.  Payor parents are often surprised to learn that they can’t decide how the other parent spends the child support.

Child support payments are, in almost all instances, determined by reference to Child Support Guidelines.  If the child or children reside with one parent at least 40% of the time then there is a “primary parenting” arrangement.  This means that the non primary parent (the parent with less than 40% of the time with the children) pays child support to the other parent.  In this case, the amount of support is calculated based on the non primary parent’s income.

For example, if there are 2 children and they reside primarily with mom, and dad earns a gross annual income of $75,000 in British Columbia, then dad’s monthly basic child support obligation is $1,164.00.  A link to BC’s child support guidelines can be found here –  https://laws.justice.gc.ca/eng/regulations/SOR-97-175/page-11.html#h-1004611 .  Beyond basic child support there may also be “special or extraordinary expenses” for the children (known as “section 7 expenses” under the Child Support Guidelines), which are typically paid for proportionally based on each of the parents’ respective incomes.     

The purpose of child support is, in essence, to ensure that children are not economically deprived because their parents have separated.  From the children’s perspective, in an ideal world, their parents would still be together to provide emotional and financial support for them.

Thus, if you are paying child support but feel that the recipient is wasting the money, you may feel obligated to do something about this.  Maybe you want to pay the money directly to the child.  Maybe you want to get a Court Order directing how the recipient parent will spend the money.  Maybe you want to stop paying child support altogether.  However, none of these are viable options.

Various courts across Canada have held that it is up to the parent entitled tor receive child support to determine how she or he spends the money in the best interests of the child (or children).  The fact that child support payments indirectly benefit the recipient parent does not mean that the child support payments can or should be adjusted (for further reading, the Alberta Court of Queen’s Bench recently addressed this issue in an April 24, 2020 decision from that court – BDM v. MMM, 2020 ABQB 288 http://canlii.ca/t/j6mh6 ).

Ultimately, if you are concerned that your spouse is seriously misusing child support payments, and is unable to manage their finances such that it is affecting the best interests of your children, you may need to consider adjusting the parenting arrangement that is in place.  In this case, the children’s best interests may be met by changing which parent they primarily live with.

If you have questions about child support or adjusting a parenting order or agreement, or any other family law matter, our experienced team of family law lawyers are available to help you assess your specific situation and provide trusted advice on how to best move forward.  
 

         

 

       
 
     

Coming Through COVID-19 – Maybe a Marriage Contract is in Order?

, , ,

I was driving recently and a song came on the radio that caught my ear.  It was the 70’s soft rock hit “Make it With You” by Bread.  The song starts as follows:
               
“Hey, have you ever tried
                Reaching out for the other side
                I may be climbing on rainbows
                But baby, here goes …”
 
The chorus goes “I want to make it with you … I really think that we can make it, girl.”
 
This might sound cheesy, but all relationships are about expectations – including marriage.  Even if your marriage is on the rocks, it may be possible to get things back on track.  
 
There’s lots of news lately about the anticipated rise in divorces and separations as we move through the COVID-19 pandemic.  There could be a number of reasons for this, such as families having less income due to one or both spouse losing employment, or the sudden shift in family dynamics when spouses and children are cooped up at home. 
 
This is where an experienced family lawyer can help, namely in drafting up a marriage contract, otherwise known as a post-nuptial agreement.  These agreements are written contracts made by spouses (after marriage) that set out how they want to move forward, as well as the legal rights and duties of each spouse if the relationship ends.  Examples of things that might go into such a contract are:
•    Domestic responsibilities
•    Parenting responsibilities
•    Management of finances (e.g., who uses certain back accounts)
•    Division of property and debt if the marriage ends
•    Spousal support if the marriage ends
So, before deciding you need to end your marriage ask yourself if it is worth sitting down with your spouse to talk about expectations.  A family lawyer can help you condense your expectations in writing to make a legally binding marriage contract.
If you have questions about drafting a marriage contract, or any other family law matter, our experienced team of family law lawyers are available to help you assess your specific situation and provide trusted advice on how to move forward during this uncertain time. 

Darren Schmidt maintains a broad practice in family law including divorce, common law separation, division of assets, parenting, custody, mobility/relocation, and child and spousal support. His diverse litigation background serves him well when acting for clients in more complex family law disputes. Darren always strives to provide tailored, down-to-earth advice for his clients.  

Preparing for Your Estate Planning Meeting

, , ,

Estate planning is an important part of protecting your family and loved ones in the event of your death or loss of capacity. It is always a good idea to consult with a legal professional who can advise you on your rights and obligations and help you prepare your Will and incapacity planning documents. Below are some things to think about before meeting with a lawyer or notary:

Will:

1.     What are your general objectives? What do you want to achieve? What do you want to avoid? For example, you may wish to ensure your spouse and children are looked after and reduce the impact of taxes.

2.   Who do you want to appoint as executor of your Will? This is the person who will administer your estate. Often spouses are appointed as executor since your spouse likely has the most knowledge of your assets. Make sure to speak to your intended executor(s) in advance to make sure he or she is willing to act. Being an executor is not a fun job and naming a person as executor does not mean that person is obligated to take on the role. Consider who you would like to appoint as an alternate executor if your first choice is unable or unwilling to act as your executor.

3.     Consider whether you will gift any specific assets or cash to a particular beneficiary or beneficiaries – for example, a cash gift of $1,000 to a close friend or your jewellery to a granddaughter. Please keep in mind that assets will change over the years.  

4     The residue of your estate is everything that is left after payment of debts, funeral expenses, executor’s fees, taxes, legal and other expenses incurred in the administration of your estate, and following any gifts of specific assets or cash, if any. Consider how you want the residue of your estate to be distributed. You should also consider whether you want your beneficiary or beneficiaries to reach a certain age before they receive their share of your estate. Are any beneficiaries disabled and receiving government benefits? If so, it is important to develop an estate plan that does not inadvertently disqualify the beneficiary from receiving those government benefits. 

 5     If your beneficiary or beneficiaries have died before you, what happens to their share? Will it go to that beneficiary’s children, if they have any children alive on the date of your death? Will it go to a different beneficiary? For example, you may wish to leave everything to your spouse if they survive you. If your spouse has died before you, you may state that his or her share will be evenly distributed among your children (if any). What happens if one or more of your children have died before you? Do you want that child’s share to pass to his or her children or do you want that child’s share to be divided among his or her siblings who are still alive at the time of your death?

6.      How would you like your estate distributed in the event of a family tragedy where all of your beneficiaries have died before you or at the same time as you? Will your estate go to your parents? To your siblings? To a charity? To a friend?

In British Columbia, the Wills, Estates and Succession Act (“WESA”) is the governing legislation about wills and estates. Under WESA, spouses (both legal and common law), as well as natural and adopted children, can apply to court to vary the Will of a deceased spouse or parent if the Will does not make adequate provision for his or her proper maintenance and support. The court may disregard the wishes of the deceased if the reasons for disinheritance are not rational or reasonable. The court may amend the distribution to one that it thinks is fair in the circumstances. 

Power of Attorney

A power of attorney grants someone else the right to act on your behalf with respect to your financial and legal affairs. It is important to appoint someone you trust because the power of attorney is basically like a permission slip for that person to manage your assets. Once you grant someone power of attorney, they become known as your “attorney.” The scope of the authority can be as broad or as specific as you like. You may allow your attorney to manage all aspects of your financial and legal affairs indefinitely, or you may wish to restrict it to specific tasks or dates. The right to act as your attorney may be effective immediately or only in the event you have lost mental capacity and are incapable of managing your own affairs. It is important to include language in the power of attorney that the authority continues despite your loss of mental capacity in order to make it an “enduring” power of attorney.

Consider who you would like to appoint as your attorney and who you would like to appoint as an alternate attorney if your first choice is unable or unwilling to act. Consider whether you would like your attorney’s authority restricted in any way and when you would like the attorney to be able to start acting on your behalf.

Representation Agreements

A representation agreement is a legal document appointing someone to assist you or act on your behalf for health care and personal care matters. This tool gives someone the right to give consent or refuse to give consent on your behalf, if you are unable to do so yourself, to minor or major health care (including decisions about medication, tests, surgery and end of life comfort care) and the right to make decisions about your personal care, such as living arrangements, diet, clothing, exercise, taking part in activities and personal safety issues. Enhanced representation agreements include end of life decisions and give your representative the authority to refuse life support under certain circumstances.

Having a representation agreement ensures that someone you trust will have legal authority to carry out your wishes if you are incapable of giving or refusing consent. By setting out your end of life decisions in the agreement, you may provide comfort and ease the emotional anguish of those who have to decide whether life support measures should be continued or withheld.

Consider who you would like to appoint as your representative and who you would like to appoint as your alternate representative if your original representative is unable or unwilling to act. Consider whether you want life support measures continued or withheld (i) in the event you are terminally ill with no chance of recovery; and (ii) in the event you are in a permanent vegetative state with no chance of recovery. Consider whether you would want medicine administered to you in your terminal state even if it hastens your death.

Krystin Kempton is a Partner at Nixon Wenger LLP where she has a general solicitor’s practice, advising corporate and individual clients on corporate and commercial transactions, lending and borrowing, wills and estates and real estate matters.

What is a Power of Attorney and Why Do I Need One?

, , , ,

What Incapacity and Estate Planning Documents Do I Need?
We recommend you have a Power of Attorney, Representation Agreement, and Will.
What Is a Power of Attorney and Why Do I Need One?
A Power of Attorney is a legal document that you can use to appoint a trusted person(s) to make financial and legal decisions for you, in the event you are incapable of doing these things yourself while you are alive.  The person you appoint is called your “attorney”. You can give your attorney broad powers to step into your shoes as needed to deal with your finances and your real estate or your business and legal matters, OR you can place limits on the power that you give them. A Power of Attorney is a valuable part of your estate and incapacity planning.
Who Should I Choose as my Attorney?
You should appoint someone you trust because a Power of Attorney is a powerful document. Many people choose their spouse, a close family member or friend. A person does not have to agree to act as your attorney, so you should talk to them ahead of time and make sure they are up for taking on the job.
You can appoint more than one attorney, with different or the same authority. If you appoint more than one, they must act unanimously unless you state otherwise.
What Are the Duties of My Attorney?
The Power of Attorney Act of B.C. confirms that an attorney must act honestly and in good faith, must exercise the care and skill of a reasonably prudent person, keep proper records for inspection, keep your assets separate from your attorney’s assets, and always act in your best interests.
Does a Power of Attorney Allow my Attorney to Make Health Decisions For Me?
No. If you want to appoint a legal representative to make personal and health care decisions for you if you cannot make these decisions on your own, you will need to make a Representation Agreement.
Can I Cancel my Power of Attorney if I Change My Mind?
Yes. As long as you are mentally capable, you can revoke/cancel a Power of Attorney.

We at Nixon Wenger LLP specialize in estate and incapacity planning. Please contact us and we would be happy to help you prepare a Power of Attorney as part of your complete estate and incapacity plan.

Elise Allan is a Partner at Nixon Wenger LLP who works extensively with individuals, assisting them in such matters as the purchasing and selling of real estate, preparing Wills, Powers of Attorney and Representation Agreements as well as obtaining Grants of Probate.

WHAT THE HECK IS HOTCHPOT??

,

“Her piece of cake is bigger than mine! It’s not fair!!” As a mother of 2 young children, this is something I hear on a regular basis. It drives me a bit crazy, but as parents, when it comes to our kids, we all know how important the concept of “fairness” can be.
Many parents fret over how they will equalize their wills where they have made unequal gifts, advances or loans to their kids over the years. Parents with the financial means sometimes advance money to a “financially dependent” child to help with living expenses or help them buy a car or house, to the exclusion of their other children who are “financially independent”. These parents often expect that when they pass away, the money they have advanced to their financially dependent child or children while they were alive will be considered advanced on account of the children’s inheritances, NOT separate gifts over and above their inheritances.
Have no fear, the “Hotchpot Clause” is here. The legal and accounting concept known as a hotchpot clause is available to deal with the equalization of the shares of the beneficiaries of a person’s estate where one or more of the beneficiaries has already received money from a parent during the parent’s lifetime. It prevents a beneficiary (usually a person’s child) from double dipping where a parent intended that any money they’d given to that child during their lifetime to be a pre-payment of an inheritance, instead of an advance above and beyond the intended inheritance.
The hotchpot concept is best illustrated by an example:
John and Martha Moneybags have 3 children, David, Suzie, and Barbie. John and Martha have an estate of $900,000.00. David, their eldest, suffers from an entitlement curse, and has never held a long term job or finished university. However, he can do no wrong in his dad’s eyes and over the past few years, John has advanced David $100,000 to fund his backpacking and skiing lifestyle. Suzie’s marriage recently broke up and her husband left her with 3 young children. John and Martha recently advanced $200,000 to Suzie to help her purchase a house. Barbie has a successful toy store business, and while not wealthy, she makes a good living.
John and Martha intend to have their $900,000 estate split equally when they die, but they want the money previously advanced to David and Suzie to be accounted for, such that Barbie gets 1/3 of their estate, including amounts previously advanced to David and Suzie. If John and Martha were to die in a plane crash today, their current wills state that their estate is to be divided equally among their 3 children, so each child would get $300,000 (1/3) each, which is not their intention.
Had John and Martha met with their lawyer before the plane crash, their lawyer could have updated their wills with a hotchpot clause, such that their estate would be considered to have been $1,200,000 ($900,000 + $100,000 advanced to David + $200,000 advanced to Suzie). Thus, when the estate was settled, Barbie would receive $400,000 ($1,200,000/3), David would receive $300,000 ($400,000 – $100,000) and Suzie would receive $200,000 ($400,000 -$200,000).
A hotchpot clause requires evidence of provable amounts advanced to beneficiaries, so it is very important for parents to keep good records of money provided to their children. Bad, or no book-keeping may render a hotchpot clause ineffective.
Where parents intend to split their estate equally amongst their children/beneficiaries, but have made loans, advanced funds for house purchases, or just given money to their children in unequal amounts while alive, their estate planning should include consideration of those gifts and loans, with proper evidence, and their lawyer should draft a hotchpot clause in their wills.

Elise Allan is a Partner at Nixon Wenger LLP who works extensively with individuals, assisting them in such matters as the purchasing and selling of real estate, preparing Wills, Powers of Attorney and Representation Agreements as well as obtaining Grants of Probate.

Executors

, , ,

In your will, the executor is the person you name to settle your estate after your death. The executor is responsible for, among other things, determining what your assets and liabilities are at the time of your death, safeguarding those assets until they are distributed to the beneficiaries, paying your debts and filing your tax returns. They are also required to gather information about your beneficiaries and family members, including confirming legal names and addresses and identifying anyone under the age of 19. Your executor will apply for a grant of probate if one is required and ultimately distribute your assets according to your wishes.
It is important to choose your executor carefully to make sure your estate is settled efficiently and effectively. An ideal executor is someone who is organized, will deal with your assets and relatives objectively, and has loads of patience. Having an executor who lives in the same area as you is helpful but not necessary. It is also important that your executor survives you and has capacity at the time your will comes into effect.
Before appointing someone as your executor in your will, it is good practice to confirm that he or she is able and willing to take on that role. An alternate executor should be appointed in case the first executor can’t act.
There are a few circumstances where the intended executorship might fail:
1.    If you die before you have prepared a will, it is called dying intestate. The court must appoint someone to administer your estate. The court will look to who has the most interest in the estate – typically your closest surviving family member. (For more information on dying intestate, see Dying Without a Will

2.    If the executor named in your will declines, dies or is incapable of taking on the role, and you have no surviving or willing alternate executors, the court must appoint someone to administer your estate in accordance with your will. This person might not be permitted to act as administrator without posting an estate bond to protect creditors and beneficiaries who minors or incapable in the event the estate assets are administered improperly.

3.    If your sole or last surviving executor (“Your Last Executor”) received a grant of probate and then becomes incapable or dies before finishing his or her duties, the executor appointed by Your Last Executor in his or her will may be in a position to take over the administration of your estate. This is called the “chain of executorship” and it will not apply to all cases where Your Last Executor can no longer act before the administration of the estate is completed.

4.    The chain of executorship is broken if Your Last Executor left no will or did not appoint an executor or has no surviving willing and able executors. In those circumstances, the person with the most interest in your estate – typically a beneficiary – can apply to be substituted as the administrator of your estate.
Be sure to review your will regularly and be aware of the health and personal circumstances of your primary and alternate executors. If one or all of your executors are no longer able to act, make arrangements to update your will.

Krystin Kempton is a Partner at Nixon Wenger LLP where she has a general solicitor’s practice, advising corporate and individual clients on corporate and commercial transactions, lending and borrowing, wills and estates and real estate matters.
 

Avoid Probate Fees

, , ,

Probate fees are fees paid to the province to obtain a Grant of Probate from the British Columbia Supreme Court when a person dies. The fee is based on the value of the deceased person’s assets and can be generally estimated at 1.4% of the value of the assets. There are some adjustments, but the 1.4% provides a small overestimate of the fee. A Grant of Probate is generally required to enable the Executor to sell or otherwise deal with the deceased person`s assets.

However, not all of a person`s assets while alive may form part of that person`s estate and require a Grant of Probate to enable transfer. For example, an RRSP, RRIF, or TFSA that designates a beneficiary who survives the deceased person, will transfer directly to that beneficiary and not form part of the deceased`s estate that is subject to probate. Life insurance naming a beneficiary will go to the named beneficiary and not become part of the estate. And assets that are owned with one or more other persons as joint tenants can pass to the surviving joint tenants rather than to the estate.

Owning assets as joint tenants is a common circumstance for spouses. Most couples will own their home as joint tenants, have joint bank accounts, and often own vehicles jointly. For most couples*, it makes sense to also name the spouse as beneficiary for life insurance, RRSPs, RRIFs, and TFSAs. Consequently, upon the death of one spouse, all assets may transfer to the surviving spouse without the need to obtain a Grant of Probate.

Given the savings of time and money in avoiding a need for probate when the first spouse dies, we find that many surviving spouses are interested in adding children to title to a home or recreational property, or to bank accounts, in an effort to avoid future probate fees. While that can be effective to avoid probate, the transfer of ownership has many consequences that may not be intended.

Adding another person to title, or to a bank account, is a transfer of ownership. If the asset were a recreational property or an investment account, the transfer will be a disposition for income tax purposes and may trigger an obligation to pay capital gains tax. If you add a child to title to your principal residence and that child does not live in the residence, capital gains tax could become payable on part of the future increase in value of the home as part of the principal residence exemption may be lost. Once ownership is changed, control is lost, such that any future decision regarding a home or recreational property, including whether or not to sell or mortgage it, will require agreement of all owners. The asset would also be at risk of a claim by any creditors of the person that was added as an owner as well as claims by that person’s spouse in a family law claim.

Notwithstanding the consequences of adding a joint owner to an asset, there are circumstances where it is a good planning option. It is most important to clearly understand both the intended and unintended consequences of any change of ownership of any asset, and to clearly document the intent of any change. If one child is added to a bank account, should the balance of that account go to that child upon your death or do you intend that the balance be split among all your children. Future disputes can be avoided or minimized if intentions are well documented. A failure to properly document intentions often results in lengthy disputes that are expensive and permanently damage family relationships.

Probate fees are significant enough that it makes sense to at least consider options to avoid the need to obtain a grant of probate. But any changes in ownership should only be undertaken after careful consideration of the consequences of such change within the context of a person`s overall estate plan, and taking into account family dynamics that may create greater risks. All of these factors require a good conversation with your legal advisor to ensure any effort to save probate fees does not create problems that will be much more expensive and damaging to address.

*There are exceptions as each family is unique. You should seek legal advice that reflects your individual circumstances when planning for the eventual disposition of your assets upon death.

Tom Christensen, Q.C., has a general solicitor’s practice, assisting clients with business matters, wills and incapacity planning, the administration of estates, and real estate conveyancing and financing matters. He has a particular interest in assisting families with the transition of assets from one generation to the next through effective personal and business succession planning as well as resolving estate disputes outside of court.

#301-2706 30th Avenue
Vernon, B.C. Canada V1T 2B6

Get Directions

Hours: 8:00 am to 4:30 pm
Monday to Friday

Wheelchair Accessible

Telephone: 250-542-5353
Toll-Free: 1-800-243-5353
Fax: 250-542-7273