Most people tend to put off thinking about what would happen if they were to die or become incapable of managing their affairs. Really, everyone should think about estate planning. If you fail to develop a plan, then you might not have any input into who manages your affairs, who becomes the guardian of your children, and what happens to your assets.

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There are three documents everyone should have:

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1. A will

 

2. A Power of attorney

 

3. A representation agreement

 

The will sets out who you want to administer your estate, to receive your assets and to be the guardian of your minor children. If a person dies without a will, these decisions might need to be made by people who don’t know what you would have preferred. There are laws about inheritance when a person dies without a will, but under these laws your assets might go to people you would not have chosen.

The power of attorney is a document that names a person to handle your financial and legal affairs. It might also allow this person to handle your affairs if you were to become incapable of managing them yourself for medical reasons.

The representation agreement allows you to name someone you trust to make health and personal care decisions for you should you become unable to make such decisions yourself. If you have any particular health-care wishes, you can include them in a representation agreement.

You might also consider other planning steps:

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• an advance directive to set out your wishes about medical care at the end of life

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• registering as an organ donor

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• pre-planning a funeral

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Estate Administration

When a person passes away, the deceased’s assets and liabilities (called the deceased’s “estate”) must be wound up and resolved.

The person who resolves the estate may be appointed in the deceased’s will as the “executor” (some archaic language calls a female executor an “executrix”). If there is no will, the person who resolves the estate must be appointed by a court, and is called an “administrator” (or “administratrix”).

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If there is a will, a court will decide if it is the last will and it names an executor who is ready to act. Then the court issues a “Certificate of Appointment of Estate Trustee” (commonly called “letters probate”).

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The person responsible for winding up the estate does so on behalf of the beneficiaries of the estate, and owes the beneficiaries a fiduciary duty. Any conflict of interest whatsoever between the interests of the administrator and the beneficiary must be resolved in favor of the beneficiary.

The role of the estate executor or administrator includes many responsibilities that may be undertaken by a lawyer. For more information about these roles and responsibilities, see our Executor Guide  and review the Estate Administration Checklist below.

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Claims Against the Estate

The Wills, Estates and Succession Act (WESA) permits a child or spouse of a deceased to ask a court for a larger share of the will-maker’s estate if the will-maker failed to provide proper support for that child or spouse.

Courts may consider many factors in determining whether the child or spouse is entitled to a larger share:

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• The station in life of the child or spouse

• The financial need of the child or spouse

• The future needs of the child or spouse

• Whether the will imposes unduly restrictive conditions on a gift to the child or spouse

• Whether the child or spouse is being maintained by the state

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Courts have confirmed that a will-maker can disinherit a child for good cause, ideally as set out in a WESA memorandum prepared along with the will and setting out the will-maker’s reasons.

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A “spouse” could include a person legally married to the deceased, but could also include a person who had lived with the deceased in a marriage-like relationship for at least two years, or who had had a child with the deceased. It is possible that there might be more than one “spouse” who has a claim on the estate. Whether a person was a “spouse” and whether the deceased made adequate provision for that person might require legal advice.

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A court action to challenge a will under the Wills, Estates and Succession Act must be commenced within 180 days from the date of the grant of probate.

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Wills and estates of status Indians are governed by the Indian Act, and are discussed below.

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UNDUE INFLUENCE

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A will can be challenged if the will-maker made the will under duress or in fear of someone, or if the will-maker was improperly dominated or defrauded by another person.

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Under the Wills, Estates and Succession Act, when a relationship existed between the will-maker and another person (often a caregiver), and “where the potential for dependence or domination of the will-maker was present”, a gift made to that person is now presumed invalid. The would-be beneficiary must prove that he or she did not improperly influence the will-maker.

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CHALLENGING THE WILL

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There are two common ways of challenging the validity of a will:

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• if the testator lacked testamentary capacity when the will was made, and

• if the will was made under suspicious circumstances.

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Testamentary capacity includes properly understanding the act and implications of making the will, being free of mental disorder, and exercising genuine free choice. If the will is rational on its face, it is presumed that the testator was capable at the time when it was made. A person claiming that the will-maker did not have capacity must prove that there was incapacity, on the balance of probabilities – a civil standard of proof. Wills made by children might raise capacity issues: an individual under 16 years of age can only make a valid will if he or she is on active service in the armed forces.

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A person claiming that a will was made under suspicious circumstances must show good reason to suppose that the will does not accurately express the will-maker’s intention. Once that suspicion is established, the burden shifts to the person supporting (or “propounding”) the will to prove that the testator knew what he or she was doing in making the will, and fully approved of the will as it stands.

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Duties of the Representative

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An executor or administrator of an estate is the personal representative of the deceased. Deciding whether to act as someone’s personal representative is an important decision. No one can be forced to act as personal representative, even if they are named as executor in a will.

Before agreeing to act, consider some of the duties of the personal representative:

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• Ensuring proper funeral arrangements are made,

• Acting impartially,

• Taking possession of the deceased’s assets,

• Paying the deceased’s debts and planning to take care of other liabilities,

• Notifying beneficiaries,

• Spending time to make careful decisions,

• Making certain that estate investments are suitable,

• Insuring against perils,

• Continuing or starting court actions on behalf of the estate, and

• Accounting to beneficiaries and creditors of the estate.

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There are some risks and additional duties that a personal representative might face, and should be aware of before agreeing to act:

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• There could be personal liability for a breach of trust in administering the estate,

• The terms of the will (if there is one), might specify terms of trusts that need to be administered,

• The nature and location of the deceased’s assets might involve special considerations,

• Conflicts of interest might arise in administering the estate,

• Acting might affect personal relationships with the beneficiaries,

• If the personal representative is a non-resident, there might be tax implications for the estate, and

• The remuneration available might be small in relation to the time involved.

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​Application for Probate or Administration

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When a will names an executor and that person is willing to undertake the task of administering the estate, the executor applies to the court for letters probate. Although probate might not be necessary in the case of some small estates (less than $25,000), applications for letters probate must be made where the will-maker owned an interest in land either solely or as a tenant in common.

When a person dies without a will, or with a will that does not designate an executor, an application for letters of administration must be made so that the court may appoint someone to administer the estate.

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Click on the links for more details:

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Letters Probate

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Grant

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Grant of Probate

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In a simple probate application the deceased lived in British Columbia, the executor named in the will is the applicant, and there is no dispute about the validity of the will. These are the documents required:

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• Certificate of Wills Notice Search

• Original will, any codicils, and any documents that have been incorporated into the will by reference (NEVER undo the staples in a will or staple the will to any other document)

• Notice of Proposed Application in Relation to Estate (Form P1)

• Submission for Estate Grant (Form P2)

• Affidavit of Applicant for Grant of Probate or Grant of Administration with Will Annexed (Form P3 or P4)

• Affidavit of Delivery (Form P9)

• Affidavit of Assets and Liabilities for Domiciled Estate Grant (Form P10)

• Cheque for probate filing fees

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Grant of Administration

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If a person dies without a will, and the estate is simple with no problems or complexities, the typical application for a grant of administration includes these documents:

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• Certificate of Wills Notice Search

• Notice of Proposed Application in Relation to Estate (Form P1)

• Submission for Estate Grant (Form P2)

• Affidavit of Applicant for Grant of Administration Without Will Annexed (Form P5)

• Affidavit of Delivery (Form P9)

• Affidavit of Assets and Liabilities for Domiciled Estate Grant (Form P10)

• Cheque for probate filing fees

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When a person dies with a will but without designating an executor to administer his or her estate, the documents for a typical application are those submitted to obtain a Grant of Probate.

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Probate Fees

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The provinces each have different fee structures.

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In British Columbia, the basic fee payable for the grant application is $200.

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The basic fee is waived if the value of the estate* does not exceed $25,000. The $25,000 threshold is calculated based on the value of all the property of the deceased situated in British Columbia.

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In addition to the basic application fee, the probate fees depend on the value of the estate:

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1. For the first $25,000-$50,000 in value, $6 for each $1,000 (or part of $1,000), plus

2. For any value over $50,000, $14 for each $1,000 (or part of $1,000).

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For Example:

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 If an estate has a gross value of $214,500, the total fee payable will be:

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Basic Fee: $200.00 Additional Fee: ($50000 – $25,000) / $1,000 X $6$150.00 ($215,000 – $50,000) / $1,000 X $14$2,310.00 Total$2,660.00

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*The “value of the estate” means the gross value of
(a) the real and tangible personal property of the deceased situated in British Columbia, and
(b) if the deceased was ordinarily resident or “domiciled” in British Columbia immediately before the date of death, the intangible personal property of the deceased, wherever situated, that passes to the personal representative at the date of death.

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The probate fee rate is the rate in effect when the grant is issued, not the rate in effect on the date of death, nor the rate in effect on the date when any additional filing fees are paid.

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Remuneration of the Personal Representative

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Entitlement

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The executor or the person who administers an intestate estate might be paid for acting as the personal representative. The amount of payment is based on the gross aggregate value of the estate, including capital and income, and might include an annual care and management fee.

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The annual care and management fee is available if the will is silent on payment to the executor, or if there is no will.

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If the will gives something to the personal representative as a beneficiary, then that gift may be presumed to be in lieu of remuneration, unless the will specifically says that the personal representative may take the gift and also be paid for acting as executor.

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Amount

If the will specifies how much the executor should be paid, then the will governs, and the amount payable is limited to the amount specified in the will.

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If no amount is specified in the will, s.88 of the Trustee Act sets out an upper limit for how much an personal representative may be paid:

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• 5% of the gross aggregate value of the capital of the estate;

• 5% of the income earned during the administration; and

• An annual “care and management fee” of 0.4% of the average market value of the assets

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These figures are maximums; personal representatives are commonly entitled to 3% of the income and capital of the estate, as well as the care and management fee.

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A court or registrar determines the actual amount based on:

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• The magnitude of the estate;

• The care and responsibility involved;

• The time spent in the administration;

• The skill and ability displayed; and

• The success of the end result.