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A Will is a legal document that sets out how you intend your estate to be handled after your death. Your Will comes into effect only upon your death.
During your lifetime, you can change your Will as often as you wish.
To make a valid Will you must be over 19 and have testamentary capacity. This means, you must understand:
- what a Will is and understand that it will be legally binding upon your death;
- what property you own and its approximate value; and
- to whom you owe a legal or moral obligation to look after if you should die.
Your Will may be invalid if anyone has forced you to make your Will a certain way. Your Will may also be invalid if, at the time you make it, you suffer from any insane delusions affecting your powers of reason or judgment or if you lack testamentary capacity.
If you marry after you make your Will, the act of getting married cancels your Will unless your Will was made specifically in contemplation of that marriage and the Will states this.
Your Will does not deal with all the property which you may own at your death. For example, the following property which you might own would not be part of your estate governed by your Will:
2. Any property such as an RRSP or life insurance policy in which you have designated a beneficiary; and
3. Any trusts established while you are still living.
The executor gathers up the estate, pays your debts and divides what remains of your estate among the “beneficiaries,” the people named in your will to receive a share of your estate. Choose an executor you trust and who will likely still be alive when you die. Carrying out the terms of your Will may be a short-term or a long-term job. Your executor will make crucial decisions and it is important that he or she should have good judgment and business sense as well as be able to relate well with the members of your family.
If you die without a Will (or a Deed) appointing a guardian for your children under the age of 19 years and no surviving parent has legal custody of your children, the Public Guardian and Trustee and the Superintendent of Family and Child Services become the guardians of your children. In order for a relative or other person to become guardian of your children, that person will have to apply to the Supreme Court of British Columbia for an order appointing him or her as guardian.
This is the procedure by which a Will is approved by the Court as the valid last will of the deceased. Probate confirms the appointment of the person named in the Will as the executor of the estate.
Whether or not a Grant of Probate is required depends upon the type of assets in the estate and the value of those assets. Generally, financial institutions and registry offices will require probate to confirm that the estate trustee is authorized to receive the assets and funds that belonged to the deceased person. If there is a small amount of money in an account (the amount varies according to the bank and the circumstances) and a grant is not otherwise required, most banks will pay out without requiring a Grant to the executor or the intestate successors, providing an indemnity agreement is signed.
Probate filing fees are the fees that must be paid to the province of British Columbia to obtain a Grant of Probate. These fees are as follows:
? No fee if the estate is worth less than $25,000.
? Basic fee of $208 plus $6 per $1,000 if the estate is worth between $25,000 and $50,000 (for a total of $358 for the first $50,000).
? For estates worth over $50,000, $358 plus $14 per $1,000 of estate value over $50,000.
The Probate Registry of the court determines the estate value based on documents filed by the executor.
When a person dies, the law assumes that they sold their assets on the date they died, and there may be substantial capital gains on those assets. If so, the estate will have to pay tax on those gains to the Canada Revenue Agency.
If you have a spouse or a child, it may be necessary for you to make adequate provision for that person in your Will. If you do not make that provision your estate may be involved in litigation after your death.
A “Spouse” means not only a husband or wife of a lawful marriage, but also someone living and cohabiting with another person (of the opposite or same sex) in a marriage-like relationship for at least two years.
The Wills Variation Act of British Columbia permits a spouse or child of a testator to apply to the Court after your death for a share, or a larger share, in your estate. The court will take into account numerous factors in considering the application and may grant the application if it feels that you have not dealt fairly with that person under all the circumstances.
An experienced lawyer will know about the rules that apply to wills and can help with estate planning so as to save money for your beneficiaries. You will have the peace of mind of knowing that your will is properly drafted and valid, and that your estate will be paid out according to your wishes.
A notary in BC can not prepare a Will containing a trust. Therefore if you have minor children and you do not want them to inherit at age 19, you should always get the help of an experienced Wills lawyer when preparing a Will.
You should review your Will whenever there has been a material change in your affairs. This could be a birth, death, marriage or marital breakdown in your family, a death or change in circumstances of a guardian or executor-trustee named in your Will, a substantial change in your assets or liabilities, or a change in tax legislation.
Your Will should also be reviewed periodically even if you are not aware of any changes in circumstances which may affect the Will. This will allow you to re-examine the provisions in your Will for young beneficiaries as they grow older, to consider whether a change of executor may be appropriate and whether your Will reflects your current wishes as to the distributions of the assets you then may hold.
If a beneficiary does not have the capacity to manage his financial affairs, it may be appropriate to leave your property to that person by way of a trust, rather than outright.
In addition a beneficiary who is mentally or physically disabled may be entitled to receive financial or other government assistance. It may be that the gift in a Will can be structured with a discretionary trust which will benefit the individual without eroding the benefits he or she may be entitled to receive from government.
In a typical discretionary trust the Trustee is given the absolute authority (discretion) to decide how much of the income and how much of the capital, if any, will be paid to the beneficiary and at what time. Because the beneficiary cannot require the payment of the income or capital from the trust, as the law currently stand the trust is not considered to be of any value to the beneficiary in calculating the beneficiary’s assets under, for example, the Employment and Assistance for Persons with Disabilities Act. Also, because the Trustee will pay out only what the beneficiary needs, the beneficiary will not accumulate excess assets which could result in a loss of the disability pension.
The Voice of CP has a usual manual for disability trusts either created in Wills or during one's lifetime: Click here for a copy.
If a person dies intestate (without a Will) there will be no named executors to carry out the wishes of the Will. Somebody else will therefore have to apply to be appointed by the Court as an Administrator by way of Letters of Administration.
Letters of Administration with Will Annexed appoints an Administrator when none of the people named in a Will as an executor are able or willing to take up the position.
If you die living in British Columbia without leaving a valid Will, BC’s Estate Administration Act dictates how your estate will be divided. It sets out the following rules:
If you own a home, your spouse will have the right to use it for life. This is called a "life interest" and can tie up the estate for a long time. Your spouse receives the first $65,000 of your estate. Then if you have children, your spouse and children share what is left – equally if you have one child, and if you have more than one child, then one-third to the spouse and the remainder equally to your children. If you have no children, then your spouse gets everything. Step-children or common-law children are excluded.
If you don't have a spouse, or if your spouse is dead, the estate goes to your children. If any of your children died before you, leaving their own children, then their children would take equally the share of your dead child.
If you have no children or grandchildren, then your parents (or the survivor of them) get the estate.
If your parents are dead, then the estate goes to your siblings, but if one of them has died before you and left any children living when you died, those children receive your dead sibling's share.
If all your siblings are dead, then your estate is divided equally among your nephews and nieces, but if there are none, then it’s left to your other relatives based on a table of family connections that shows how they are related to you.
There is no flexibility and people that you want to provide for may be left out.
NOTE - the laws on intestacy in BC will be changing (likely towards the end of 2012) when the new Wills Estates and Succession Act becomes effective.
If you have not named an executor in your Will, or the executor named in your Will is unwilling or unable to act as your executor, or you die intestate (i.e. without leaving a valid Will), somebody, usually one of your next-of-kin, must apply to the court to be appointed the administrator of your estate on your death. Your spouse is the first person who can apply. If you have no spouse or if your spouse is unwilling or unable to be the administrator, then a relative can apply. The administrator is often required by the court to post a bond to ensure that your estate is administered and distributed according to law.
Without a will, the Public Guardian and Trustee becomes the trustee and holds the child’s shares in trust for them until they’re 19 years old. The child’s parent or guardian would have to apply to the Public Guardian and Trustee for any money needed for things like living expenses or education. This can be a hardship if the child is quite young and the parent or guardian needs the money for day-to-day expenses.
When the child turns 19, they can demand all of their money no matter how much it is, regardless of their maturity or financial responsibility. By contrast, if you have a will, you appoint the executor and trustee for the share going to a child under 19, and you can direct that the share be used for the child’s benefit, including support and higher education, without government involvement.
