AFTER DEATH

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After Death

Who's in Charge After Death?

The deceased’s personal representative will be responsible for paying the estate debts and distributing its assets. If there is a will, the will names an executor to carry out these duties. If there is no will, then an administrator must be appointed by the court.

Identification of Personal Representative

If there is a will, the will names the executor. The executor is typically a trusted relative or friend of the will-maker. There may be more than one executor named in the will, or the will might name one executor and an alternate in case that person is unable to act. To identify the executor, first find the will.

Executor

The executor gathers the assets of the estate, pays off the estate debts, and distributes the remaining assets according to the terms of the will.

In most cases the executor applies to the court for a grant of probate: this is a court order confirming that the will is valid and giving the executor authority to gather the estate’s assets and settle the estate’s debts.

If you are named as the executor, you might decide to hire a lawyer to help guide you through the steps. If the estate is small and simple, you might try to act without a lawyer. In that case, there are many resources available to help you understand and perform your duties in being executor. In most cases you will share some of the responsibilities with a lawyer, who can efficiently handle many of the steps under your instructions.

Probate is not always required.

If the other beneficiaries think that there is a problem with the will, or if they think that there is a problem with the executor, they might take their concerns to court. The executor may be called upon to represent the estate, and may have to defend his or her actions.

Administrator

Generally, if there is a will then the personal representative settling the estate is called an “executor”, and if there is no will, then the personal representative settling an intestate estate is called an “administrator.” Grants of administration are made to people who are not named as executors in a will.

Grant of administration without will annexed

A personal representative seeking to settle an intestate estate applies to the court for a “grant of administration without will annexed.” For more about the procedure, click here.

Grant of administration with will annexed

A grant of “ letters of administration (with will annexed)” is made in some cases:

  • There is a will, but the named executor is unable or unwilling to act, or
  • There is a will that names a minor as the sole executor, and the child’s guardian applies for a grant of administration (WESA, s. 134).

For more about the procedure, click here.

Co-Executors and Co-Administrators

Usually there is one personal representative while another person may be named in a will or letters of administration as an alternate executor or administrator. Sometimes, however, there is more than one personal representative, and depending on the terms of the will or grant of administration, they might have equal roles. This can arise when a parent of two children wants to treat them equally and names them both as co-executors in the will, instead of naming one as executor and the other as an alternate.

Although a will might name two (or more) co-executors, one might decide not to act and the other might elect to pursue the grant of probate. In that case, only the one co-executor pursuing the grant would face potential liability in handling the estate (WESA, s. 107):

If an executor does not join an application for a grant of probate or administration with will annexed, the executor is not liable in respect of assets of the estate coming into the hands of a co-executor, an alternative executor or an administrator with will annexed, whether or not power is reserved to the executor to apply for a subsequent representation grant.

A person named as co-executor who elects not to join the other co-executor in pursuing probate might reserve the right to apply later to the court for an estate grant. But once the court approves the final disposition of the estate by the other executor, that disposition is final (WESA, s. 148).

If there is more than one personal representative, disputes could arise between the co-representatives resulting in stalemate or delay in settling the estate. Some options for resolving this stalemate might include:

Agent for Executor

Administering an estate involves some legal matters, so you should get a lawyer. The lawyer’s fees will generally be paid by the estate. Certainly if the estate includes real estate, trusts, or foreign assets, or if there could be conflict among the beneficiaries, get a lawyer’s help as soon as possible. Lawyers who help executors administer estates are also called solicitors.

Specifically, the legal work in the administration of an estate involves first locating the will and searching for any wills notices. The lawyer reviews the will and advises the executor whether it is valid and what its terms mean. If the deceased died without a will, the lawyer provides advice about who is the next of kin, who is entitled to apply to the court for letters of administration, and who is eligible to inherit.

The lawyer can also deal with advertising for creditors. Legal advice will be important if any claims are disputed or there is any conflict between the creditors or beneficiaries.

The lawyer also conducts title searches for any personal property that may have been registered in the Personal Property Security Registry, and any real property owned by the will-maker registered in the Land Title Office. The lawyer will advise as to the title to these assets.

In addition to the legal tasks, a lawyer can also do some (or all) of the executor’s work. As executor you can decide whether you want to do all the executor’s work or you want a lawyer to help do part (or all) of it. A lawyer will need to gather and review a lot of documents about the deceased’s assets, liabilities, and relationships. You may be able to save time and expense by gathering these documents to provide to a lawyer:

  • The original will and any codicils (amendments) you have found;
  • Grant of probate (if it has been issued, give the lawyer a copy certified by the court) or any foreign grants of probate that need to be submitted for resealing, or any ancillary grant (if applicable);
  • Any instructions about funeral arrangements or dealing with assets after the death of the deceased;
  • The deceased's birth, marriage, and death certificates, and social insurance number;
  • Copies of any marriage agreement, separation agreement, divorce decrees and maintenance orders, if applicable;
  • A list of banks or financial institutions where the deceased may have had accounts, safety deposit boxes, RRSPs, TFSAs, or other investments;
  • Names of any financial advisors, planners, or accountants the deceased consulted;
  • Bank books, cheque books, and financial statements or documents, up to the time of death;
  • Details of any bonds, stocks, and securities owned by the deceased;
  • A list of real estate owned by the deceased, with the addresses and copies of the titles, if available, together with approximate values;
  • Details of any motor vehicles, boats, or large equipment owned by the deceased, including model, year, and registration numbers;
  • Life insurance policies, if applicable;
  • Copies of buy-sell agreements, partnership agreements, leases, employment contracts etc., if applicable;
  • Copies of the financial statements and particulars of any businesses or private companies in which the deceased held an interest, if applicable;
  • List of contents of the deceased’s safety deposit box, if applicable;
  • Details of any digital assets (such as Bitcoin or loyalty rewards) or online accounts, preferably with account passwords;
  • Details of any other assets not listed above;
  • A list of liabilities of the deceased, including funeral expenses, as detailed and complete as possible, together with approximate amounts;
  • Previous years’ income tax returns, preferably going back 7 years;
  • An outline of the deceased's family tree, with relatives' names, ages, occupations, and present addresses, and
  • A list of names of people who had significant relationships with the deceased who may be listed in the will.


Based on the information you provide, the lawyer will prepare affidavits and other court documents, including an inventory of the deceased’s assets and liabilities. These documents must be filed with the court as part of the application for a grant of probate. The lawyer will have you sign documents and then will file them in the Probate Registry of the Supreme Court. If necessary, the lawyer may appear in Supreme Court Chambers for a hearing associated with the application.

After the grant of probate is received, the lawyer prepares the documents necessary to transfer the deceased’s assets to you as executor. The lawyer ensures that the documents are properly executed, and then files them with transfer agents (in the case of securities) and the Land Title Office (in the case of real property).

Once the assets are in your name, you may then transfer them to the beneficiaries or the next of kin, or sell them as the case may be. The lawyer prepares the documents for the transfer of real property, ensures they are properly executed, and files them for registration in the Land Title Office.

The lawyer assists you in preparing your accounts and prepares releases for the beneficiaries or next of kin to execute.

If it is necessary to pass your accounts, the lawyer prepares and files the necessary affidavits and court documents in the Supreme Court Registry, then attends in Supreme Court Chambers and at the hearing before the registrar.

You might decide not to hire a lawyer if the estate is simple and there are no disputes. The Supreme Court of BC has posted online resources to help you with a proceeding in court:

Keep in mind that it is usual to get a lawyer to assist with most estates. Even simple estates can involve complicated processes and legal forms.

Certainly if there is any uncertainty or dispute, you should get legal advice as soon as possible.

Public Guardian and Trustee

The duties and mandate of the Public Guardian and Trustee (“PG&T”) are set out in the Public Guardian and Trustee Act (R.S.B.S. 1996, c. 383):

  • Protect the legal and financial interests of children under the age of 19 years;
  • Protect the legal, financial and in some cases personal and health care interests of adults who require assistance in decision making.

The PG&T also provides estate services:

  • The PG&T might be appointed to administer an intestate estate (WESA, s. 130);
  • The PG&T might administer the estate of a missing person;
  • The PG&T might be named as a will’s executor;
  • The PG&T is eligible to apply for an estate grant if the named executor is unable or unwilling to act (WESA, s. 131(c)); or
  • The PG&T could hold assets for a named beneficiary in trust, either because the gift is unclaimed (WESA, s. 147) or because the beneficiary is a minor or and adult incapable of managing his or her affairs.

The PG&T might also become a party to an estate grant as the representative of a minor or of an adult who has been declared incapable of handling his or her financial and legal affairs but has no other legal guardian. In the course of settling an estate there may be several applications to the court, and if any applications affect minors or incapable adults, the PG&T must have notice.

For example, the PG&T must be given notice of these applications, if any of the other beneficiaries entitled to a share in the estate is a minor or incapable adult:

  • A notice by a surviving spouse exercising a right to the spousal home (WESA, s. 29(1)(c)), or
  • An application for variation of a will (WESA, s. 61(1)).

Deciding Whether to Act

Executors face risks and could be personally liable if they make mistakes:

  • If they distribute estate assets to the beneficiaries before all taxes are paid;
  • If they distribute assets to beneficiaries while other beneficiaries or creditors still have unresolved claims to those assets; or
  • If they distribute assets to beneficiaries without making adequate efforts to discover or notify other possible beneficiaries or creditors.

Settling an estate may be difficult and stressful. If you find it too much to handle yourself, you can get a lawyer or a trust company to help you, or to do it for you. Those expenses would be paid out of the estate. See Agent for Executor for the services a lawyer would provide.

Duties of a Personal Representative

Generally the personal representative gathers the estate assets, pays the creditors, and distributes the remaining assets to the beneficiaries. Depending on how complicated an estate is, there may be a lot of steps involved in that process. Specific steps in settling one estate might not apply to another estate. A lawyer can help set out the right steps in each case.

If you are doing this yourself without the assistance of a lawyer, consult this Checklist to help you organize your duties and keep track of what you have already done.

Renunciation

If you have been named in a will as executor but you are unable or unwilling to act, and haven’t started dealing with any of the estate assets, you can renounce your appointment as if it had never been made (WESA, s. 104). To renounce your appointment as executor, file Form P17: Notice of Renunciation.

If you have started dealing with assets, you are legally bound to continue, and can only be relieved of the task by a court order discharging you (WESA, s. 157) or an order removing you (WESA, s. 158).

If the documents required for an estate grant have not already been filed, you will also need to file them with your renunciation (Rule 25-1(4)). Your appointment as executor may be deemed to have been renounced if one of the beneficiaries or a party interested in the will wants you to apply for probate and you fail to do so. If that party files a citation (Form P32) to force you to seek probate and you fail to do so within six months, then you may be deemed to have renounced your appointment as executor (Rule 25-11(5)).

Reserving the Right to Apply for Probate

If there is more than one executor named, but only one co-executor applies to the court for the estate grant, then that grant must reserve the right of the other co-executor to apply for probate at a later time.

(8) A grant of probate issued on an application for an estate grant brought by one or more, but not all, co-executors must reserve the right of a co-executor who does not join in the application to apply at a later time unless that co-executor has renounced executorship (Supreme Court Civil Rules, Part 25 (“Probate Rules”), Rule 25-4(8))

A co-executor who doesn’t seek a probate grant might formally renounce executorship (WESA, s. 104).

If a co-executor has not renounced executorship, but the probate is granted to the other co-executor who completes probate, the reserved right expires when the probate is finalized by the court (WESA, s. 148).

Get Organized

Flowchart

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Checklist

First Steps

  • Record the date of death
  • Record all decisions made, steps taken, and financial transactions
  • Consider contacting a lawyer regarding general estate questions
  • Contact the BC Vital Statistics Agency online or by phone (1-888-876-1633):
  • Review the will, if there is one
  • Determine who will act as executor (or administrator, if there is no will) of the estate

Arranging the Funeral and Death Benefits

  • Funeral Arrangements: Contact a funeral service provider or the Memorial Society of British Columbia (if the deceased was a member)
  • Obituary: consider if and where to publish a notice of death or obituary
  • Indigenous Persons: if the deceased was a member of a First Nation living on a reserve, contact Indigenous and Northern Affairs Canada
  • Life Insurance: contact the deceased’s life insurance company, if applicable
  • Military Service: various programs may provide funeral coverage, pension and benefit assistance to the family and survivors of veterans or military personnel:
    • If the deceased was receiving a disability pension, family members may be eligible for a survivor’s pension
    • Funeral assistance, including financial assistance with the funeral and grave marking, may be available through the Last Post Fund
    • If the deceased died within 30 days of being injured while on active military service, a death benefit may be payable to the surviving family members
  • Federal Government Benefits: visit a Service Canada location or call (1-800-277-9914, toll-free) to notify them of the death; they can answer questions about the Canada Pension Plan, Old Age Security and related benefits
  • Provincial Government Benefits: if the deceased was receiving the Senior’s Supplement, a housing subsidy, worker’s compensation, or other provincial benefits, contact Service BC or the individual agencies set out in the Service BC Bereavement Checklist
  • Benefit Plans: if the deceased received pension benefits or extended health and dental benefits from a workplace or privately funded plan, contact the plan administrator to advise of the death and to determine eligibility for survivor benefits or continued benefit coverage for dependants

Administering the Estate

  • Legal Help: consider contacting a lawyer regarding probate or letters of administration
  • Locate Estate Assets: including, if applicable, assets in a safety deposit box
  • Medical Insurance: you may need to contact Medical Services Plan to cancel MSP health insurance coverage
    • MSP records are generally updated automatically if the deceased passed away in BC. If the deceased passed away outside BC or was covered under a self-administered MSP account, contact MSP directly or visit a Service BC location.
  • Passport: cancel the deceased’s passport, if it has not yet expired. The passport should be returned to the Passport Program address below by registered mail with a copy of the death certificate and a letter indicating whether you wish the cancelled passport to be destroyed or returned to you:

Passport Program
Gatineau, QC, K1A 0G3

  • Social Insurance Number: if the deceased died in one of the provinces in Canada, then notice will go automatically to the federal government to cancel the SIN number, but if the deceased died in a territory or outside of Canada, you must notify Service Canada to cancel the deceased’s SIN. Provide the deceased’s SIN number and a copy of the death certificate to Service Canada. You can either bring it to the nearest Service Canada Centre or mail the documents by registered mail:

Service Canada
Social Insurance Registration Office
P.O. Box 7000
Bathurst, NB E2A 4T1

  • Mail: contact Canada Post and provide them with a statutory declaration that death has occurred and mail should be forwarded, if applicable
  • E-Mail and Online Accounts: check the deceased’s computer for accounts, passwords, online business presence, and digital assets
    • Consider cancelling subscriptions, web hosting, or accounts
  • Protect Assets: secure estate assets and ensure that adequate insurance coverage is in place
  • Apply to Court: if there is a will, apply to the court for a grant of probate; if there is no will, apply for letters of administration
  • Notify Utilities: contact hydro, cable, telephone, internet, and other utilities to change the name on their accounts, forward the bills, or cancel the services provided
    • Keep in mind that some accounts may be billed online, so you might not be able to identify all accounts just be searching for paper statements mailed to the deceased, and should check for statements sent to the deceased by e-mail
  • Driver’s Licence: cancel the deceased’s driver’s licence at a local driver licensing office or by mailing a copy of the death certificate and the driver’s licence to:

ICBC Licensing Unit
PO Box 3750
Victoria, BC, V8W 3Y5

  • Automobile Registration and Insurance: contact ICBC (through an Autoplan broker) or the deceased’s private insurer, if applicable, to cancel or change car insurance
    • Depending on who will be the new vehicle owner, you may need to provide a certified copy of the death certificate, a certified copy of the will, and possibly a letter from your lawyer or a certified copy of the estate grant
    • If the deceased leased a vehicle, contact the lessor
  • Financial Institutions: contact banks and other financial institutions to remove the deceased’s name from joint accounts or to transfer accounts held solely by the deceased into the name of the estate
    • In searching for accounts, keep in mind that some accounts may not send paper statements, and the deceased may have held accounts for which statements were sent to an e-mail address
  • Credit Cards: contact credit card companies to remove the deceased’s name from accounts or to cancel them
  • Real Property: search for property held or rented by the deceased
    • If the deceased owned real property registered in the Land Title Office, change the name on title
    • If the deceased was a tenant, contact the landlord to arrange for vacating the property, terminating the lease, and final accounts
    • If the deceased was a landlord, locate a copy of the lease and contact the tenant(s) to arrange for continued rental payment and property management, or vacating the property, subject to the terms of the lease and the relevant laws:
      • Relevant laws, depending on the situation, might involve the Residential Tenancy Act, S.B.C. 2002 C. 78, the Strata Property Act, S.B.C. 1998, c. 43 and strata bylaws, or the Commercial Tenancy Act, R.S.B.C. 1996, c. 57.)
  • Creditors: search for and examine debts and claims against estate
    • Publish Notice to Creditors: contact the BC Gazette at 1-800-663-6105 to arrange for publication of the notice
    • Seek legal advice in defending any legal action against the estate of the deceased
    • Pay debts owed by the deceased
  • Income Taxes: check online at the Canada Revenue Agency’s “What to do when someone has died,” web resource, and contact an accountant to file required income tax returns and apply for clearance certificate(s)

Winding Up the Estate

  • Accounting to Beneficiaries: prepare detailed accounting of payments made in administering the estate and obtain approval from beneficiaries or the court
  • Distribute Assets of Estate: distribute personal and household effects, pay legacies and distribute estate to beneficiaries according to terms of the will (or, if there is no will, according to the order of intestate succession (WESA, ss. 20-23).

Checklist PDF

Files and Record Keeping

If you decide to be executor, you should keep a diary of all the steps you take and decisions you make in administering the estate. Start at the date of death. For each item, record the date, what you did, the time involved in completing that step, and any expenses that you incurred personally.

You must keep a complete record of all expenditures and receipts because, unless you are the only beneficiary, before distributing the estate you must account to the other beneficiaries as to how the estate was administered.

Immediate Tasks After Death

The first steps are going to include notifying family and friends, registering the death and getting a death certificate, finding a will, and making arrangements for a funeral or memorial service in keeping with the deceased’s wishes.

For a list of immediate tasks, see the section called “First Steps” in the Checklist.

Contacting Family and Friends

The deceased might have an address book, Facebook friends, contacts in a smartphone, or contacts listed in electronic address books on a computer. Contact the people you believe would want to know, and suggest to them that they contact people whom you might not know.

If the deceased was employed, contact the employer.

Organ Donation

There is an organ donor registry maintained by BC Transplant. If the deceased was a donor, BC Transplant operates a Donor Family Support Program that can arrange for a medal to be given to donor families to honor the gift. BC Transplant also publishes a Donor Family Support Guide that lists resources for dealing with grief.

The Human Tissue Gift Act (R.S.B.C. 1996, c. 211, s. 12) requires that donations be anonymous, but if the donor family wants to contact the recipient, BC Transplant provides a letter-writing service that preserves the anonymity of both donor and recipient.

Autopsy

An autopsy is a thorough medical examination of a deceased’s body after death. It may be required by a coroner, or it may be requested by the deceased’s family.

Choose a Funeral Director

The executor takes responsibility for the funeral. Consult the section called “Arranging the Funeral and Death Benefits” in the Checklist.

The Memorial Society is a non-profit society that assists with funeral arrangements for its members. When a member dies, they recommend nearby funeral providers and assist with the arrangements. If the deceased was a member, the deceased may have already made funeral arrangements. Contact the Memorial Society (1-888-816-5902) to check.

If the executor is unwilling or unable to instruct the funeral service provider, the spouse may. There is a list (under the Cremation, Interment and Funeral Services Act, s. 5) of the people who can instruct a funeral service provider, if the executor is unable or unwilling to do so.

Medical Certificate of Death and Death Certificate

When you choose a funeral service, the funeral director will usually help you order copies of the death certificate.

If you elect to do it yourself, you must first register the death before you can order the death certificate. Contact the Vital Statistics Agency (250-952-2681 in Victoria, or 1-866-876-1633 toll-free), or go to their website, or go to any Service BC location.

When the death is registered you can order the death certificate by completing an application and paying the application fee, which is currently $27 per death certificate for ordinary delivery by mail or $60 for next-day delivery by courier.

Burial or Cremation

The Memorial Society of BC is a non-profit society that provides assistance to people planning a funeral. The deceased might already have pre-planned a funeral through the Memorial Society, in which case the details and preferences would be registered. In any case, it is worth contacting them to find out if the deceased was a member, and for other help they can provide in finding providers and arranging funeral services on your behalf.

The British Columbia Funeral Association provides addresses of funeral and cremation service providers online: Deathcare Services.

Writing the Death Notice or Obituary

There are many suggestions online for how to write an obituary. If you are having difficulty, a funeral director will be able to provide suggestions for how to write a death notice or obituary, and where to publish it.

Typically a death notice or obituary is published in a local newspaper like the Vancouver Sun or Victoria Times Colonist. Sometimes an online guest book is also provided (typically an online guest book has an expiry date).

You might consider whether a notice online might be appropriate, perhaps on the deceased’s Facebook page (if applicable).

Funerals and Memorial Services

Where the will sets out the deceased’s wishes as regards funeral, interment or cremation, those wishes are binding on the executor, who must respect those wishes unless they are unreasonable, contrary to law, or cause undue hardship. Cremation, Interment and Funeral Services Act, S.B.C. 2004, c. 35, ss. 5-8.

Payment of Funeral Service Costs and Other Immediate Bills

To pay the funeral expenses, you could take the invoices to the bank where the deceased kept an account. If there’s enough money in the account, the bank will give you funds to cover the expenses.

If there isn’t enough money to cover the funeral expenses, there may be funds available from other sources:

  • The Province of BC offers a funeral supplement (they may seek repayment);
  • If the deceased was a veteran, funds may be available from Veteran’s Affairs through the Last Post Fund; or
  • If the deceased was an Indigenous person living on a reserve, Indigenous and Northern Affairs operates a Decedent Estates Program to help settle the estates of Aboriginal persons, including providing an executor or administrator.

Click for more on insolvent estates.

Secure Property and Valuables

The estate assets might need to be protected. The list below contains suggestions for safeguarding assets in many common situations. This list doesn’t include all possible assets or situations, so keep in mind that you might need to take additional steps to protect the assets in the estate you are administering.

  1. Search for cash, insurance policies, securities, jewellery, and other valuables. Arrange for their safekeeping.
  2. Cancel the deceased’s credit cards.
  3. Lock up the deceased’s residence, if it is not occupied. If it is vacant and not being supervised, tell the police.
  4. Arrange for an immediate inventory of all the deceased’s personal assets.
  5. Check the insurance on the deceased’s assets (e.g., house, furniture, motor vehicle). Check the expiry dates and check the vacancy provisions to ensure that the coverage continues (most home insurance limits vacancy to 30 days). Notify the insurers of the death, and ask about a vacancy permit if the property will continue to be unoccupied.
  6. Arrange for interim management of the deceased’s business.
  7. Collect and deposit any outstanding cheques (e.g., pensions, dividends, interest, salary).
  8. Cancel subscriptions or redirect mail, if necessary.
  9. Check for mortgages (and determine if they are life-insured) and agreements for sale, and make the payments to keep them up to date.
  10. Check leases and tenancies.

If the deceased had tenants, tell the tenants where to send rent payments, and give notice of termination if necessary (check the terms of the lease and relevant laws). Notice of termination should comply with the terms of the lease. Depending on the situation, it might involve the Residential Tenancy Act, S.B.C. 2002, c. 78, the Strata Property Act, S.B.C. 1998, c. 43 and strata bylaws, or the Commercial Tenancy Act, R.S.B.C. 1996, c. 57).

  1. Review the last cheques written by the deceased to ensure that there were no irregularities.

Guardianship of Minors

If a parent of a minor child dies, it may become an issue who is to be guardian of the child. If the other parent is not a legal guardian of the child, that parent does not necessarily become guardian on the death of the guardian parent (Family Act, s. 54).

The will might specify who the guardian is to be (Family Law Act, s. 53), or the guardian parent might have executed an “Appointment of Standby or Testamentary Guardian,” under the Family Law Act.

If a minor child is left with no adult able to be guardian, the child would be in need of protection pursuant to the Child, Family and Community Service Act, R.S.B.C. 1996, c. 46, s. 13(h). The Province (Ministry of Child and Family Development) would become the child’s guardian, while the Public Guardian and Trustee would become guardian of the child’s property.

In some cases a will might set out guardianship and also provide a testamentary trust for the benefit of the minor child. If no trust is expressly created, but the child inherits either under a will or intestacy, a trust is created with the Public Guardian and Trustee (WESA, s. 153).

Pets

Pets are property at law. A will-maker cannot make a gift to a pet in a will, since a beneficiary must be a legal “person” (WESA, s. 1), but the will-maker can make a gift of the pet in the will. It is common to give a pet and some money together to a beneficiary, to cover costs of caring for the pet.

Locate Estate Planning Documents

The will may be in the deceased’s home, in a safety deposit box, or at the office of the lawyer who drafted the will.

If you need to look in a safety deposit box you will need a key to the box and a copy of the death certificate. If the will is there and it names you as executor, you can then remove the will and list the other contents (WESA, s. 183) of the safety deposit box.

Try to find out if the deceased made a later will. A person who makes a will in BC may file a notice (WESA, s. 73) with the Vital Statistics Agency in Victoria. This notice says where the will is kept. If the will-maker later moves that will or revokes it, a new Wills Notice might be filed. The current cost to file a wills notice is $17.00.

To search for a wills notice you will need a copy of the death certificate (a lawyer can do this search online without the death certificate). The current cost to search for a wills notice is $20.00 (an additional $5 cost to search for an additional name the will-maker might have used in filing the notice). Note that it is an offence to provide false information in filing the search for a Wills Notice (WESA, s. 77).

Search Of Wills Form.png

The Vital Statistics Agency will give you a Certificate of Wills Search. Keep this certificate for when you apply to the court for probate. In applying for probate you need to provide the court with two copies of the certificate (Probate Rules, Rule 25-3(2)(c)).

If there is no will, or there is a will but it’s not valid, then the person who wants to settle the estate assets will need to apply to the court.

Caution: because a person who makes a will is not required to file a notice with the Vital Statistics Agency, the report from the Agency does not prove that there is no later will.

Other Immediate Tasks

Depending on the estate, some other tasks might need to be done immediately:

  • If there are concerns or disputes about an autopsy or funeral service, those issues must be addressed immediately.
  • If the deceased had a business, there might be business processes outstanding or employees who need to be paid.
  • If the deceased was renting or had tenants, or lived in a condominium, there might be issues with notice or rental payments.
  • If a named executor or guardian of a minor is ill or cannot be located, it might be necessary for another person to step in to handle matters.
  • If insurance or benefits are needed immediately, such applications might take priority.

It can be stressful handling an estate, and if you are in doubt, consult a lawyer.

Review of Will(s) and Trusts, As Applicable

If there is a will, first of all, make sure that it is that last will. If you have not already done so, conduct a wills search.

Wills

When you are sure that this is the last will of the will-maker, make sure that it is valid. There are several ways in which a will might be invalid:

  • It might not have been properly witnessed or signed;
  • The will-maker might not have had the legal capacity to make a will; or
  • The will-maker might have been under duress or subject to undue influence.

Some deficiencies in the will can be cured by the court on an application under WESA (s. 58).

Witness and Signature

A will must be signed at the end by the will-maker in the presence of at least two witnesses, who then sign the will in the presence of the will-maker:

WESA, s. 37 says,

  1. To be valid, a will must be
    1. in writing,
    2. signed at its end by the will-maker, or the signature at the end must be acknowledged by the will-maker as his or hers, in the presence of 2 or more witnesses present at the same time, and
    3. signed by 2 or more of the witnesses in the presence of the will-maker.

A will made by a member of the armed forces on active duty (a “military will”) can be valid without being witnessed (WESA, s. 38).

If a will is signed by the will-maker but then additional testamentary gifts or instructions come below the signature, or were added after the will was signed, those additional instructions are invalid, but the will may otherwise be valid (WESA, s. 39).

If there is no attestation clause, it may be possible to avoid having to prove the will in solemn form before a court by filing an affidavit of one of the witnesses, or an affidavit of someone with personal knowledge of the will-maker’s intentions (Probate Rules (Rules 25-3(15) and 25-3(16)).

Capacity

A will can be valid in BC if the will-maker is at least 16 years old and is mentally capable of making a will. Wills made by members of the armed forces on active service can be valid regardless of the age (WESA, s. 38) of the will-maker.

WESA, s. 36, says,

  1. A person who is 16 years of age or older and who is mentally capable of doing so may make a will.
  2. A will made by a person under 16 years of age is not valid.

Determining whether the will-maker had the mental capacity to make a will is a legal test:

  • does the will-maker understand that he or she is making a will, and
  • is the will-maker able to decide rationally how to distribute the assets.

There may be other relevant tests for capacity that apply in particular circumstances. For example, an application for division of pension entitlement under the Canada Pension Plan may fail if the applicant was incapable of forming or expressing the intention (Canada Pension Plan, s. 55.3) to divide the pension.

If the executor named in a will lacks the mental capacity to manage the estate, the court would pass over that person and appoint another executor (WESA, s. 158(b)) or substitute representative (WESA, s. 159). If the named executor has a legal committee appointed to manage his or her affairs, the court might appoint that person or entity to be executor, or the court might appoint another person entirely.

Undue Influence

Where a beneficiary could dominate or exert undue influence over a will-maker, and a gift to that person in the will is challenged in court, WESA (s. 52) says that the beneficiary must show that will-maker was not unduly influenced to make the gift.

It used to be that people who witnessed a will could not also be beneficiaries. The concern is that witnesses may be in a position to exercise undue influence or duress over the will-maker. Under WESA (ss. 40 and 43), witnesses may be able to inherit if they show the court that the will-maker was not improperly influenced in making gifts to them.

Multiple Wills

A will-maker might deliberately have more than one valid will. Multiple wills can be an effective estate planning device where the will-maker held different kinds of assets. Instead of one will covering everything, which could take a long time to probate and might involve assets in other jurisdictions or assets that actually don’t need probate at all, these different kinds of assets could be divided into separate wills.

Having multiple wills could reduce probate costs by dividing the assets and disposing of them separately: assets that do not need probate are not part of the will that is subject to probate fees.

Inter Vivos Trusts

Alter Ego/Joint Partner

If the will-maker is concerned that a spouse or children might challenge the will, the will-maker might have set up an alter ego or joint partner trust. Alter ego trusts are for individuals aged 65 or older, and joint partner trusts for couples. These trusts are inter vivos trusts, which means they are set up by the will-maker during his or her lifetime. The assets are distributed at the time of the will-maker’s death.

When the will-maker dies, this trust is treated as an individual for tax purposes. In other words, the trust must file a return and pay taxes on its income. Tax changes in force January 1, 2017 affect the tax rates applicable to inter vivos trusts for 2016 and later taxation years. Inter vivos trusts are now taxed at the highest marginal rate. For advice about taxation of trusts, consult a lawyer.

Other Inter Vivos Trusts

There are various types of inter vivos trusts that can be set up for particular purposes, including charitable trusts, spousal trusts, and trusts for persons with special needs.

They may or may not be set up as revocable by the will-maker who is settling the trust.

Intestacy

If there is no will, a person who is in a position to handle the deceased’s assets may apply to the court for a representation grant. The person who applies is typically a spouse, relative or friend of the deceased, and may be applying with the consent of other potential beneficiaries. In some cases the court might insist that the person applying get an insurance bond or provide some security. This may happen if one of the parties is not capable of handling his or her affairs and does not have a representative, or if one of the parties asks the court to order security (WESA, s. 128). The court might insist that the person applying get an insurance bond and provide proof of this bond to the court. This bond protects the estate beneficiaries in case the personal representative mishandles the estate assets.

If you are dealing with a matter involving a person who is missing but not definitely deceased, and owns property that must be dealt with urgently, it may fall under the | Estates of Missing Persons Act where the court will appoint the Public Guardian and Trustee, or another person who applies, as curator of the estate.

Once the person is determined to have died and a representation grant is issued, the interim curator is replaced by the personal representative named in that grant (Estates of Missing Persons Act, s. 9).

Full

If there is no will, the estate will be divided according to the “Order of Intestate Succession” set out in Part 3 of WESA:

  • If there is a spouse but no children, the spouse takes the estate;
  • If there is a spouse and children who are all children of that spouse and the deceased, the spouse gets the first $300,000, then half the residue, and the other half of the residue goes to the children;
  • If there is a spouse and children who are not all children of that spouse and the deceased, the spouse gets the first $150,000, then half the residue, and the other half of the residue goes to the children;
  • If there is no spouse but there are children, they inherit the estate.

If there is no spouse and no child, the estate goes to the following relatives in this order:

  • The deceased’s parents (also called “ascendants”);
  • If there are no living parents, to the parents’ children (the deceased’s siblings, also called “collaterals”);
  • If there are no living siblings, to the deceased’s living grandparents or their descendants (the deceased’s first cousins);
  • Failing that, to the deceased’s great-grandparents or their living descendants (the deceased’s second cousins or cousins removed).

If there is no surviving relative, then the estate is forfeited to the province of BC (WESA, s. 23(2(f)).

The order of intestate succession in WESA is called “parentelic” distribution because it follows the parent, and this is different than the distribution system in BC before WESA, which was by “consanguinity” or nearest blood relation.

Partial

If there is a will but part of it is invalid, whether because that part is unclear or impossible to follow, the assets included in that invalid part of the will must be distributed according to the rules of intestate succession (WESA, s. 25).

For example, where a will is clear about who is to inherit specific assets, but doesn’t make any provision for the residue of the estate, that residue would be distributed according to the rules of intestacy.

Identification of Beneficiaries

Identify and Notify

An executor must make reasonable efforts to identify and notify possible beneficiaries. If the executor does make reasonable efforts, that executor will not be liable for any loss that occurs if a beneficiary is not actually notified (WESA, s. 121).

Problems identifying beneficiaries might be due to uncertainty in the will. A gift in a will to the “next of kin” will likely fail because of the uncertainty of who the will-maker meant, and whether the person who is next-of-kin at the will-maker’s death was actually the person the will-maker had in mind.

Problems identifying beneficiaries might also arise if part (or all) of the will is invalid, so that gifts specified in the will cannot take effect, and go instead to intestate heirs. In Re: Tomlinson Estate (2015 BCSC 1223), family members who were not named in the will but would have inherited if the deceased had died intestate unsuccessfully sued the estate, claiming the will was invalid.

Adoption

Generally, when a birth parent (called a “pre-adoption parent” in WESA, s. 3) gives a child up for adoption, that child loses the legal right to inherit from the birth parent, unless that child is named in the will. Similarly, a birth parent who gives a child up for adoption loses any legal right to inherit from the deceased child, except if the child names that parent in a will.

WESA, s. 3 says,

(0.1) In this section, "pre-adoption parent" means a person who, before the adoption of a child, was the child's parent.

(1) Subject to this section, if the relationship of parent and child arising from the adoption of a child must be established at any generation in order to determine succession under this Act, the relationship is to be determined in accordance with the Adoption Act respecting the effect of adoption.

(2) Subject to subsection (3), if a child is adopted,

(a) the child is not entitled to the estate of his or her pre-adoption parent except through the will of the pre-adoption parent, and

(b) a pre-adoption parent of the child is not entitled to the estate of the child except through the will of the child.

(3) Adoption of a child by the spouse of a pre-adoption parent does not terminate the relationship of parent and child between the child and the pre-adoption parent for purposes of succession under this Act.

A birth parent (or certain relatives of a deceased birth parent) may be able to unseal adoption records in an effort to locate a child who was given up for adoption, subject to restrictions under the Adoption Act (s. 71).

The Adoption Act (s. 61) also permits the original identity of an adopted child to be disclosed if it allows that child to receive a benefit.

Inventory of Assets and Liabilities

Content: List of Estate Assets and Liabilities

Below is a step-by-step guide to listing the estate assets and liabilities. For suggestions about how to identify assets and liabilities, see “Administering the Estate” in the Checklist.

These steps apply to many estates in British Columbia, but some of them may not apply to the estate that you are administering.

How to List the Estate Assets and Liabilities

  1. Record all the expenses you incur in being executor, including funeral expenses.
  2. Arrange with the deceased’s bank or financial institution to view and list the contents of the safety deposit box.
  3. List all the banks or financial institutions where the deceased had accounts or loans. Include the account numbers. For each account, request the balance and the interest accrued to the date of death. Collect any bank books, cheque books, or statements of account, current to the date of death.
    1. Note that accounts may include lines of credit, credit cards, term deposits, tax-free savings accounts, registered retirement savings plans, and registered retirement income funds.
    2. Also note that account statements may be provided online or via e-mail.
    3. If the deceased might have had digital assets such as Bitcoin or loyalty rewards (Air Miles, Aeroplan points) look for online accounts and passwords.
  4. List all securities, stocks, or bonds owned by the deceased. Obtain the market value at the date of death.
  5. List all real estate that the deceased owned alone or with others. Also list any mortgages or agreements for sale that the deceased held or owed. Provide the full addresses of all properties. Have appraisals done, as of the date of death, on any properties that were not jointly owned.
  6. List all estate income that will be received after the date of death. This may include cheques for pensions, deferred profit sharing plans, dividends, interest, salary, or any repayments or refunds owing to the deceased.
  7. List any business assets or corporate shares owned by the deceased. Obtain appropriate valuations.
  8. Identify all people and businesses who owed money to the deceased. Provide any details you can of the nature of the debt and the amount owing.
  9. List any other assets, including cars, boats, household goods, jewellery, electronic equipment, collections such as coins or art, and other personal effects. Describe or photograph them (note serial numbers where possible). Estimate values. Discuss with your lawyer whether any of these are excluded assets for the purposes of the Family Law Act:

    Excluded assets for the purposes of the Family Law Act are assets that are not shared family assets but belong to one spouse alone. This may include such things as property owned by one spouse before the relationship began, or a family heirloom inherited by one spouse.

  10. List all outstanding debts and liabilities of the deceased, including balances owed for taxes, utilities, and rent or property management.
  11. List any agreements or court orders to which the deceased was a party, or under which the deceased was liable. This might include divorce decrees, maintenance orders, marriage agreements, Family Law Act orders (or earlier orders under the Family Relations Act), guarantees, buy-sell agreements, partnership agreements, leases, employment contracts, and insurance owned by the deceased on the life of another.

Form

The Affidavit of Assets and Liabilities is filed using Form P10. This form lists all the assets and liabilities that pass to the executor or administrator (WESA, s. 122).

Typically, the assets are listed using Form P10 if the deceased lived in B.C., and Form P11 if the deceased was not living in BC at the time of death, or if there are assets in a foreign jurisdiction (Probate Rules, Rule 25-3(2) and (8)).

Valuation of Assets

General Principles

In transferring assets and estimating the value of the estate it may be necessary to find out the fair market value of individual assets. There are various methods of valuation, depending on the asset:

  • For household goods, an auctioneer may make an informal and cursory appraisal and conduct an estate auction, leaving the profit for the estate.
  • In valuing investments for tax purposes you need to calculate the capital gain (the amount it is worth at the time of death, less the initial purchase cost). It may be necessary to hire an accountant.
  • If the assets include jewellery, antiques or collectibles, or other assets for which the value is uncertain, you may need to get a professional appraisal.
  • For valuation of estates involving overseas assets or business assets, you will likely need to hire an accountant.

Relevant Date

Generally, all the estate property that is subject to probate will be deemed to have been sold, and the proceeds received, by the deceased immediately before death. In completing the disclosure statement ( Affidavit of Assets and Liabilities) for an estate grant in Form P10 or Form P11, record the value at the date of death.

Using Appraisers

Some assets have a clear value at any particular date: a bank account or an investment account can have a specific value at day’s end. If the deceased had assets whose value is not clear, such as a car, real estate, or jewellery, having an appraisal will help in determining what value to include in the application for probate.

For vehicles, you might be able to find similar vehicles for sale online and arrive at a reasonable valuation, or you could hire an appraiser.

For real estate, you could use the most recent property assessment, although if the real estate is located in an area where property values have recently changed significantly, it might be prudent to get a more recent appraisal. Realtors might be able to do this free hoping that they will handle sale of the property. There are also private firms that provide formal appraisals in compliance with the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP).


Types of Estate Property

The estate might include personal property and tangible items, real property, digital assets or legal rights, and cash and investments. Some assets might be located outside of BC. The most common types of assets are identified in this section.

Real Estate

A will-maker might hold real property assets or a charge on title (such as a mortgage or judgment). A search at the Land Title and Survey Authority of BC (LTSA) will produce a state of title certificate. This search can be done in person at the Land Title Office that holds records for the area where the property is located, or it can be done by a lawyer.

If the will-maker held title to property, find out how the title to these assets is held. If the deceased held title as a joint tenant, then the other surviving joint tenants still own the entire property. Joint tenancy includes what is called a right of survivorship, meaning that if one joint tenant dies then the property continues to be fully owned by the surviving joint tenants. Often spouses will own a home as joint tenants, so that when one dies the other becomes the sole owner of the entire property.

If the property is held by a surviving spouse as a joint tenant and that spouse is living there, the spousal home passes outside the estate and there are no concerns about the estate having to sell it or manage it.

That is different from being tenants in common, where each owner owns a portion of the property. When one tenant in common dies the share owned by that person is held by the deceased’s estate, and may be transferred in the will or sold.

If the deceased was the only owner, or if the deceased owned property as a tenant in common, find out who is living there now, if anyone, and what share the deceased owned. Until the property is sold or transferred, keep the asset secure:

  • Ensure that there continues to be insurance coverage and that utility payments are being made;
  • If no one is occupying the property, check into the terms of any homeowner insurance, which may require that the property not be left vacant for a month;
  • If the property is unoccupied, inform the police.

Land Title Act

The Land Title Act, Part 17, covers transfer of ownership after an owner dies. For joint tenants, the Land Title Office will register a transfer of title from one joint tenant to a surviving joint tenant upon filing the deceased’s death certificate, or the certified copy of the grant of probate (Land Title Act, s. 269).

In other cases of transferring real property after the death of the owner, the executor must file a certified copy of the grant of probate with the Land Title Office (Land Title Act, s. 266(5); WESA, s. 122). The executor may also be required to file a portion of the affidavit (in Form P3 or P4) that correctly describes the land parcel in question, although the Registrar of Land Titles may dispense with that requirement (Land Title Act, s. 266(6)). An executor who applies to the Land Title Office to discharge a mortgage must also file the certified copy of the grant of probate (Land Title Act, s. 267).

The executor has all the power the will-maker had over the land, whether the will-maker held title to the land or held a charge on title. Once the executor is registered in the LTO as taking the will-maker’s place on title, the executor has the power the will-maker had (Land Title Act, s. 264).

Spousal Home

Where there is a surviving spouse, that surviving spouse may be able to keep the spousal home if it is valued at equal to or less than the amount the spouse is owed from the estate (WESA, s. 26), or if the court orders it (WESA, s. 33).

An executor must notify a surviving spouse that he or she may have a right to the spousal home. An executor who disposes of the home without giving proper notice may face liability (WESA, s. 27).

The spouse must give notice to the personal representative expressing an intention to keep the home (WESA, s. 29). The notice of an application for a claim to the spousal home must be in Form P42 if there is already a proceeding in the matter; if there is no proceeding already, then the spouse should apply by requisition in P43, according to Rule 25-4(2).

Notice must be delivered within 180 days of when the representation grant was issued.

If no notice is delivered, then the personal representative can sell the home.

If there are disputes, or if you are uncertain about entitlement (for example, as to who is a “spouse” or whether any particular relative has a claim or not), be sure to get legal advice before disposing of assets.

Personal Property

Personal property may be either tangible (things you can touch or see) or intangible (securities and rights). Intangible personal property might include investments or rights registered in the Personal Property Security Registry (perhaps a right to repossess a car if payments are not made, for example).

If the deceased was living in BC, both tangible and intangible personal property may be subject to probate (unless it doesn’t pass to the personal representative at all).

If the deceased was not living in BC, only the tangible personal property may be subject to probate (Probate Fee Act, S.B.C. 199, c. 4, s. 1).

Accounts at Banks or Financial Institutions

The will-maker may have had chequing or savings accounts at financial institutions or held assets in safety deposit boxes at financial institutions. Search for statements and account numbers.

For a safety deposit box, you will need the key. A bank representative will want you to make an inventory of the contents and leave that list in the box, then you may remove any contents (WESA, s. 183).

Contact the branch. There may be an individual at that branch who deals with accounts of deceased clients, and if not, they can refer you to their head office where they will help you. Typically they will want to see a certified copy of the grant of probate, and then they will transfer the name on the account into the name of the estate or of the executor. If you are not planning on applying for probate, perhaps due to the small size of the estate, the financial institution may have other forms or processes they require before they can release the assets.

If any accounts are held jointly, ensure that the joint account holder has not withdrawn all the funds, unless that was the will-maker’s wish.

There may be a need to keep accounts open temporarily. If there are payments that must continue to be made from current accounts (such as payments for utilities or mortgages), ensure that there continue to be sufficient funds in the accounts until these matters are finalized or the assets are sold. If there are rent, annuity, or other payments being deposited, keep the accounts open or advise the payor where to redirect payments.

If there is no need to maintain these accounts, then close them.

Investments

If the estate includes securities, such as stocks, bonds, or mutual funds, you should check with the company holding the securities about how to transfer or sell the securities. You may have to apply for probate in order to transfer them, depending on the requirements of the account holder(s).

Depending on the nature of the investment assets and the needs of the beneficiaries, it might be helpful to seek the advice of a lawyer, accountant, or tax planner before you transfer the assets.

  • Some investment assets may have restrictions or tax consequences on transferring them. For example, transferring funds might impute capital gains to the recipient, gains that could be avoided if the transfer were delayed or the assets were held in a more tax-effective way.
  • If there are rollover dates, such as for GICs or investments that mature at particular dates, take note of the maturity dates and any penalties for liquidating the assets before or after the key dates. Be careful to avoid penalties where possible, so as to be prudent and maximize the estate value.
  • If you need to reinvest before you can distribute estate assets, be careful to choose prudent investments. You may be personally liable if you make imprudent or unreasonable choices and the estate loses money or incurs unnecessary penalties.

The Trustee Act, (ss. 15.1-15.6) sets out the basic guidelines for investment by a trustee or an executor. A trustee is expected to exercise the care and skill that a prudent investor would exercise. A trustee is not personally liable if the investment suffers a loss so long as the investment strategy was reasonable and one that a prudent investor would follow. A trustee may delegate investment authority to an advisor where doing so is reasonable and prudent.

Debts and Liabilities

The deceased or the estate might owe money. The personal representative must account to creditors as well as beneficiaries (WESA, s. 142(2)) before estate assets can be distributed.

If the assets are not sufficient to pay all the debts and the gifts under the will, the assets must be liquidated in the order specified by WESA (s. 50(5) to pay debts:

  • First, property subject to a mortgage or said in a will to be payment on a debt, pays that debt;
  • Next, any assets that would be distributed on an intestate basis or as residue go to pay debts;
  • Then any general legacies or gifts of money are depleted to pay debts;
  • Ultimately, items gifted as specific bequests are sold to pay debts.

If the will leaves a gift to a creditor, that gift is not necessarily a payment by the will-maker on the debt, unless the will clearly says that it is (WESA, s. 53(3)). A creditor might take a gift and still pursue a debt.

Benefit plans that have designated beneficiaries pay benefits directly to those beneficiaries, and creditors of the estate have no access to payments made from benefit plans (WESA, s. 95).

Safety Deposit Boxes

In looking for a will, check if the deceased had a safety deposit box. You will need a key to the box and a copy of the death certificate. If the will is there and it names you as executor, you can then list the contents of the box and remove the will (WESA, s. 183).

Before you can remove the contents of the safety deposit box you must list the contents, then date and sign the list. You must leave a copy of that list in the safety deposit box, and give a copy to the bank that has box. Those copies must be retained for at least 12 months (WESA, s. 183).

Foreign Assets

If the will-maker owned assets in another province or another country, consult a lawyer who can advise you as to tax requirements or restrictions on selling assets in that jurisdiction.

Other

Some estates might have assets that need special attention to locate, value, and transfer:

If you are not sure of the value of any assets, get an appraisal.

Creditors

The executor will have a duty to account (WESA, s. 142(2)) not only to beneficiaries but also to creditors.

Types

Liabilities of Estate

Finding out who the deceased owed money to generally has two aspects:

  • Looking in the deceased’s records for evidence of mortgages, loans, and accounts with outstanding charges, and
  • Publishing a notice asking for anyone having a claim against the estate to come forward.

Keep in mind that debts owed by the deceased might include online accounts and fees, perhaps invoiced in online statements or sent to the deceased by e-mail. If the deceased did business online, be sure to check the deceased’s e-mail and computer for evidence of online accounts. Accessing or cancelling online accounts might require searching for passwords or contacting account administrators.

A creditor will have 30 days after publication of a notice in the BC Gazette to come forward with a claim against the estate (WESA, s. 154). An executor must not distribute the estate until this period has passed and outstanding claims have been resolved (WESA, s. 155).

Of Deceased

Debts incurred by the deceased fall to the estate. The estate is responsible to pay those debt claims, but the executor also has a duty to account for payments made by the estate, so the executor should make sure that the claims are correct.

Family Law Claims

If the deceased was required to pay support to a spouse or child and was behind in payments, those outstanding debts become debts owed by the estate.

If the deceased was in the process of separating or divorcing, ownership of estate assets can become challenging. Before distributing assets that might be subject to a claim in family law, you should get legal advice.

“Family assets” (as defined in the Family Law Act,  S.B.C. 2011, c. 25, s. 85) generally means property in which both spouses have a legal interest.  It may be formally owned by one, while the other spouse holds an unregistered interest, as in a  constructive trust.   If the deceased was the registered owner of property that might be subject to a constructive trust, get legal advice before distributing property.

Family property that is an “excluded asset” would be owned by one spouse and not be subject to a claim by the other spouse. Excluded property is not generally divided (Family Law Act, s. 96). Depending on what the spouses did with the excluded property during the deceased’s lifetime, however, it might have lost its status as “excluded.” Discuss with your lawyer whether any of the estate assets are “excluded assets” under the Family Law Act.

Relating to Death

The most common type of claim by creditors against an estate is for funeral and related expenses. The personal representative will be personally liable for those expenses, but is entitled to be reimbursed by the estate.

Incurred by Personal Representative

The personal representative will incur expenses for administering the estate. That could include fees for professionals like lawyers, accountants, or appraisers. There will also be expenses for filing forms with the court registry or land title office and for transferring assets.

Of a Beneficiary

A beneficiary might owe money to the deceased. For example, if a parent gave money to a child, and then the parent died, it might be unclear

  • Whether the money was a gift or a loan to be repaid, and
  • Whether the money was an advance on what would be left to the child in the will (which would reduce the gift from the estate).

It used to be that money given by a parent to a child was presumed to be a gift given to advance the child, but that presumption is no longer valid (WESA, s. 53(1)).

If it is unclear whether money given to a beneficiary during the lifetime of the deceased is a gift or loan, or whether it affects a gift in the will, consult a lawyer.

Similarly, if the deceased owed money to a beneficiary, the executor should not assume that a gift left in a will to a beneficiary who is also a creditor pays off the debt to that creditor. It used to be that if the will-maker owed money to a creditor but made a gift in the will that was enough to pay the debt, it was presumed that the will-maker intended that the gift would satisfy the debt. Under WESA (s. 53(3)), that common-law presumption no longer stands. Unless there is clear language in a will saying that the gift to a creditor is intended to satisfy the debt, the creditor could take the gift and still have a claim against the estate.

Claims Against Personal Representative

Statutory

Some statutes that set out duties of an executor also say that executors who fail in their duties to creditors may be liable. Executors may also face liability if they make poor choices in investing estate assets.

If a creditor sues the deceased, the personal representative will be named to defend the claim (Supreme Court Civil Rules, Rule 20-3(10)).

If the executor publishes a notice to creditors and a creditor fails to step forward by the end of the time specified in the notice, the executor is not liable for distributing assets without paying that creditor (WESA, s. 154).

If a will allows for more than one possible executor, an executor named in the will but who does not seek the estate grant will not be liable for how the other executor deals with the estate (WESA, s. 107).

Common Law

Some claims against executors by creditors of the estate arise not from statute but from common law. Creditors might make claims against the estate if the executor did not pay their claims. The Supreme Court of BC recently confirmed that,

The executor has a duty to ascertain the liabilities of the estate. If the executor disputes a claim against the estate in whole or in part, the remedy of the creditor is to sue the estate.

Browne v. Brown Estate, BCSC 2015 28

Sometimes the claims of creditors are based on clear accounts, but sometimes the debts they claim are not set out in documents at all. In a recent case, Re: Tomlinson Estate, 2016 BCSC 1223, family members of the will-maker claimed that the will-maker had promised to pay them for services they had provided to her during her lifetime. When the will did not make a gift to them, and the executor did not agree to pay them, they sued the estate (unsuccessfully) as creditors.

An executor who pays the expenses to represent the estate in court is generally entitled to be repaid from the estate (Re: Tomlinson Estate, 2016 BCSC 1223).

Procedures of Personal Representative

Searches

A personal representative must search for estate creditors and list estate liabilities on the List of Assets and Liabilities filed for an estate grant.

Depending on the estate and the kinds of expenses the deceased had, the personal representative might identify some debts and creditors from talking to friends and relatives of the deceased, looking through the deceased’s mail, and scanning the deceased’s computer and e-mail. Other debts might be identified in searches at the Land Title Office or the Personal Property Security Registry.

If the person seeking an estate grant is unable to identify liabilities (in order to list them in applying for an estate grant) because people or institutions won’t give the applicant that information, the court registry will provide an “Authorization to Obtain Estate Information” (Form P18) to help the applicant obtain that information (Probate Rules, Rule 25-4(2)(b)(e)).

Advertising for Creditors

A Notice to Creditors is usually published in the BC Gazette. It is not mandatory to publish the notice, and publishing the notice does not let the beneficiaries avoid valid claims by creditors, but it does help the executor to distribute the estate after settling all the claims against the estate.

  • Contact the BC Gazette to publish your notice in Part I, which is published weekly. The cost is $63.83.
  • If you are sure that you know all the creditors who may have claims against the estate, then you might decide not to advertise. If you are not only the executor but also the only beneficiary, the expense is likely not warranted.
  • Here is a link to the online form to complete, and a sample is provided (below).

Notice To Creditors.png

Publishing the notice also protects executors from liability. Executors who publish this notice are not liable to creditors who fail to respond within the time specified in the notice. The time specified for a response must be no less than 30 days after publication of the Notice to Creditors. After that period expires, you can distribute the estate (WESA, s. 54).

Defending Estate Against Creditors

If a creditor sues the estate, the personal representative defends the claim. The personal representative has the same rights that would have been available to the deceased (WESA, s. 50(2)) , and is entitled to be indemnified by the estate for the costs of defending the claim (Re: Tomlinson Estate, 2016 BCSC 1223).

If the executor published a notice to creditors and a creditor failed to come forward in the time prescribed, the executor is not liable for distributing assets without paying that creditor (WESA, s. 154).

Cancellations and Notifications

The personal representative will need to tell people about the deceased’s passing. Some authorities and businesses will need to cancel services and forward accounts. Depending on the deceased’s estate, this usually involves freezing bank accounts, cancelling credit cards and driving licenses, and notifying creditors.

Follow the steps set out in the Checklist, particularly the section “Administering the Estate.”

Claiming Life Insurance, Canada Pension Plan (CPP) Death Benefit and Other Benefits

Some of these steps might have already been done. Follow the Checklist and see the section “ Devolution of Assets at Death.

Life Insurance

Generally, life insurance proceeds pass to the beneficiary designated in the life insurance contract and not to the estate (WESA, s. 95). However, there may be complications:

  • If the beneficiary in a life insurance policy is identified not by name but only using language like “next of kin” or “heir,” then the proceeds of insurance pass to the estate (Insurance Act, s. 59(3));
  • If more than one beneficiary is named but one or more of those beneficiaries predecease the will-maker, the remaining named beneficiaries receive the proceeds, although if all the named beneficiaries predecease the will-maker, then the proceeds are paid into the estate (Insurance Act, s. 63(1)).

If the will mentions the life insurance and designates a beneficiary for that life insurance who is not the same beneficiary designated to the insurance plan administrator, then the most recent designation will generally be considered valid (Insurance Act, s. 61(2)). Even if the will is otherwise invalid , the designation of beneficiary might still be valid (Insurance Act, s. 61(1)).

If you are administering an estate where it is unclear who should be the beneficiary of life insurance, consult a lawyer.

Annuities

Annuities are included in the definition of “benefit plan” under WESA (s. 1). An annuity plan might have a designated beneficiary who will receive the proceeds on the death of the annuitant, or the annuitant might have designated the proceeds to go to his or her estate.

If the annuity has a named beneficiary but that person predeceases the will-maker, the remaining proceeds of the annuity will be paid into the estate (WESA, s. 91).

Canada Pension Plan

The Canada Pension Plan offers a one-time lump-sum death benefit following the death of a contributor to the Plan. The amount of the benefit depends on the deceased’s payments into the Plan. The maximum benefit payable is $2,500.

The executor must apply for the benefit within 60 days of the death. If there is no executor or the executor is unable to apply, the death benefit may be paid to the person who paid the funeral expenses, or a spouse or next-of-kin to the deceased.

A “Survivor Pension” may be payable under the Canada Pension Plan. “Survivor” is defined under the Canada Pension Plan, s. 42(1) as being the person who was married to the deceased, unless the deceased had a common-law partner at the time of death, in which case the benefit is paid to the common-law partner. The spouse must apply for the Survivor’s Pension, and how much is payable will depend on the age of the applicant, how much the deceased contributed to the CPP, and whether the applicant also contributes to the CPP. The soonest the Survivor’s Pension will start is the month following the death.

Note that any CPP or old age security cheques for the month after the month in which the person died must be returned uncashed.

Old Age Security

A surviving spouse (aged 60-64) of a deceased person might be eligible to receive an Allowance for the Survivor as part of the Old Age Security program, if the surviving spouse has a low income. Once the surviving spouse turns 65 the benefit terminates, as the spouse would then become eligible for the regular Old Age Security benefit.

Application for an Estate Grant

Applying for a grant of probate involves filing all documents that would answer key questions:

  • Was a will search done?
  • Is the applicant the rightful executor?
  • Has an inventory been made of assets and liabilities?
  • Has a careful search been made for beneficiaries and people who may have rights to inherit?

If you want to gather and file this material yourself, keep in mind that the documents required for an estate grant will need to be filed in the court using specific forms. Here is a link to the Probate Forms.

Even simple estates can be complicated enough that a lawyer’s help will be needed. You can help the lawyer by gathering the following information to prepare the estate grant application documents:

  1. Make an inventory of all the deceased’s assets and liabilities. Try to provide exact values as at the date of death, but approximate values may be enough. If you are working with a lawyer, provide the lawyer with copies of recent bank statements, property assessments, share certificates, appraisal reports, credit card statements, and other statements of income, assets, and debts. If you can’t gather those statements yourself, the lawyer may ask you to sign an authorization so the lawyer can gather that information directly from the financial institutions on your behalf.
  2. List each beneficiary named in the will, including his or her full name, address, and relationship to the will-maker.
  3. List any spouses that the deceased had ever married or lived with in a marriage-like relationship. For each, provide the full legal name, address, and details about the date of marriage or cohabitation, the date of divorce or separation, and whether there is any agreement between the spouses dividing their assets.
  4. List all the deceased’s children, whether they were born inside or outside of marriage, are stepchildren, or were adopted by the will-maker. Provide each child’s full legal name and address. If any child is under 19 years of age, include that child’s birth date and the name of that child’s parents and/or legal guardians (if only one parent or guardian is responsible for that child, only that parent’s name is required).
  5. List more distant relatives (other than people you have already listed) who you think might be entitled to a share in the estate if there were no will. For example, if the deceased had no surviving spouse, you might list all children, grandchildren, or parents; if the deceased had none of those, you might list the deceased’s parents, brothers, sisters, aunts, uncles, nieces, and nephews.

The lawyer will use this information to prepare the forms, and then you sign those forms and take them to the court registry to be filed. One of the forms, Form P10, is an affidavit where you swear that you have made a complete search and know of no other assets or debts.

The steps that must be taken to prepare these documents can take several weeks, depending on such factors as the nature of the assets and how quickly the financial institutions are able to provide information. Financial institutions can sometimes take several weeks to respond.

You must keep track of the things you do in administering the estate. For your convenience, here is a sample Post-Grant Worksheet:

Steps N/A Required Completed
(date)
Consult with lawyer on next steps      
  Advertise for creditors      
  Prepare notarial copies of grant      
  Complete insurance/annuity/pension claims      
  Arrange for transmission/transfer/sale of specific assets to meet cash needs      
  Assets held in joint tenancy and with designated beneficiary transferred to surviving joint tenant or appropriate beneficiary      
  Arrange for payment of cash legacies/specific bequests      
  Arrange for payment of debts      
  Arrange for transmissions/transfer/sale of remaining assets      
 

Arrange for preparation and filing of all income tax returns
Name of accountants:                        

     
  Apply for clearance certificate      
  Clearance certificate received      
  Reserve funds for:                

Personal representative fee:  $             
                Lawyer’s billing:                      $             
                Accountant’s billing:               $             
                Income tax:                             $             

     
  Prepare trust reconciliation statement      
  Prepare releases and receipts      
  Letter to residuary beneficiaries with releases      
  Received all releases and paid residue of estate      
  Account for tax reserve or other holdback – if applicable      
  Request final accounts from lawyer, accountant      
  Receive and pay final accounts      
  Close file (keep documents in case of follow-up issues)      

Required?

Estates with some types of assets don’t require probate, just the death certificate. These include estates where the assets pass outside the will, and small estates.

Real estate owned in joint tenancy with another person doesn’t require probate. If the deceased person owned land or a house in joint tenancy with another person, transfer the land to the other joint tenant simply by filing an application in the Land Title Office (include the death certificate). You need to go to the Land Title Office that handles the property in question.

Other assets that are owned jointly, which might include bank accounts or vehicles, can also be transferred to the other joint owner without probate. Apply to the bank, or the registry where the asset ownership is registered, to transfer the ownership to the remaining joint owner. You will need the death certificate.

Some assets, such as workplace benefit plans, TFSAs, RRSPs, and life insurance, allow the owner to designate a beneficiary. These assets can pass to the beneficiary without probate. The plan administrator or the financial institution holding the assets will need to see the death certificate.

Small Estates

There is no probate fee for estates of less than $25,000, and (depending on the estate assets), such small estates might not require probate or formal administration at all.

A bank holding assets with a value around $25,000 or less will typically pass those assets directly to an executor named in a will if the executor signs a letter of indemnity saying that if the bank is wrong in paying the proceeds then the executor will indemnify the bank. The bank will not likely pass those assets to an administrator if there is no will.

If the estate includes real estate, even if it is worth less than $25,000, the Land Title Office (Land Title and Survey Authority of BC) will only pass title to a joint owner or to a personal representative. If there is no joint owner, you will need to get an estate grant naming you as the personal representative.

When WESA was originally drafted it proposed a new “Small Estate” regime subject to special rules, but these laws did not come into force. When the new probate rules were drafted they effectively dealt with smaller estates without needing a separate regime.

If you don’t know whether you need to seek an estate grant or not, talk to a lawyer.

Application for Grant of Probate

Probate is the process where a court rules that a will is valid. When the court approves the will and the executor named in the will, the court issues a grant of probate.

Typically the executor obtains notarized copies of that grant to show to banks and other account holders so that the accounts and assets can be accessed by or transferred to the executor.

If you want to try to handle this yourself, the sections below describe the process for proving a will in common form and the forms you will need to complete and file. For most estates this can be complicated enough, and the risk of making a mistake big enough, that you will want to get a lawyer’s help.

Application for Grant of Administration with Will Annexed

To apply for a grant of administration with will annexed, use Form P3, so long as you meet these criteria (from WESA ss. 121-126, and the Probate Rules, Rule 25-3(6)):

  • There is no executor able to act and you are a person permitted under WESA, s. 131 to apply for letters of administration with will annexed
    • WESA, s. 131 gives first priority to a beneficiary who has the consent of the other beneficiaries to act, but if there is no such consent, then
    • Any beneficiary may be appointed, and if there are none, then
    • The court may appoint another person who is suitable
  • You have made a diligent search for another will in all reasonable places, including where the will-maker kept documents, and no more recent will has been found
  • You believe that this is the will-maker’s last will dealing with property in BC
  • The will complies with the formalities for making a will:
    • The will-maker had the capacity to make a will and was at least 16 years of age, and
    • The will is signed at its end and witnessed by two people who are each at least 19 years old
  • You searched for a wills notice showing no later will (or no will registered)
  • The will is not a military will
  • You are not aware of any problem with how the will was executed
  • You are not aware of any interlineations, erasures, or alterations to the will
  • The documents referred to in the will are attached to the will
  • You are not aware of any other grant of probate for this estate in BC or any other jurisdiction
  • Service to the Public Guardian and Trustee is not required (see Probate Rules, Rule 25-2(8) and (9), and Rule 25-3(11)):
  • Service to the PGT may be required if as executor you will be required to serve a minor or a person who has been declared mentally incompetent
  • Service to the PGT on behalf of a minor is not required if the applicant is the executor and the will creates a testamentary trust for that minor

After you file the form you must serve it on specific people:

  • All other named or alternate executors
  • Beneficiaries, including possible intestate successors
  • Nisga’a government or treaty First Nations, if the will-maker was a member
  • Citators, who are people who have filed a citation demanding that you seek probate, if there are any

If you and the will-maker were spouses, you must confirm that your appointment and any gifts you may receive are not revoked by WESA (s. 56(2)):

  • If the will-maker and a spouse ceased to be spouses, and didn’t reconcile between when the will was made and the will-maker died,
  • Then any gift to or appointment of the spouse as executor is revoked, and such gift is treated as if the spouse pre-deceased the will-maker, unless the will expressly declares a contrary intention.

Use Form P4 if any of the following apply:

  • There are interlineations or erasures,
  • There are problems with the witnesses or signatures,
  • There might be missing pages or missing codicils,
  • It is unclear whether the will-maker could read or understand the will, or
  • It is a military will.

Application for Grant of Administration Without Will Annexed

If there is no will, but there is no conflict about the disposition of the estate, a person willing to seek the grant applies for a grant of administration without will annexed in Form P2.

WESA (s. 130) lists the people entitled to apply. The deceased’s spouse has first priority, followed by a child who has support of the majority of the deceased’s children, then a person nominated by that child, followed in turn by another intestate successor who has the support of a majority of other intestate successors.

With the grant application, file these additional documents (Probate Rules, Rule 25-3(2)):

Disclosure Statement for Executors and Administrators

The disclosure statement is another name for the Affidavit of Assets and Liabilities in Form P10. The disclosure statement lists all the assets and liabilities that pass to the executor or administrator (WESA, s. 122).

Typically, the assets are listed using Form P10 if the deceased lived in B.C., and Form P11 if the deceased was not living in BC at the time of death, or there are assets in a foreign jurisdiction.

The registry is permitted (under Rule 25-4(1) of the http://www.canlii.org/en/bc/laws/regu/bc-reg-168-2009/latest/part-5/bc-reg-168-2009-part-5.html Probate Rules]) to provide an “Authorization to Obtain Estate Information” in Form P18 to a person applying for an estate grant who has not been able to complete the list of assets and liabilities. Form P18 is issued if the list of assets and liabilities is not complete because the applicant needs the authorization in order to obtain information to complete it (Rule 25-4(2)(b)(e)).

Filing the Documents

Generally, documents relating to the will, the search for the will, the appointment of executor, affidavits of assets and liabilities, and any orders relating to those things in this or any other jurisdiction must be filed in an application for an estate grant.

Form P2 will be required, as will Form P3 or P4. Depending on the circumstances, various other forms may also be required.

Rule 25-2 describes who must be given advance notice of the application in Form P1. Notice must be delivered 21 days before the date of the application. Generally, these people must be given notice:

  • All the people who are named as executors or would have had a right to be executors;
  • All the people who are named as beneficiaries or who would have had claims as beneficiaries if the will-maker had died intestate;

Rule 25-3 sets out the documents to file:

  1. A person wishing to apply for an estate grant must, after delivering in accordance with Rule 25-2 the documents that were required to be delivered under that rule, file the following documents:
    1. A submission for estate grant in Form P2;
    2. An affidavit from the applicant, or, if there are 2 or more applicants, from at least one of the applicants, as follows:
      1. If the application is for a grant of probate or a grant of administration with will annexed,
        1. In Form P3 if subrule (6) of this rule applies, or
        2. In Form P4 if subrule (6) of this rule does not apply;
      2. If the application is for a grant of administration without will annexed, in Form P5;
      3. If the application is for an ancillary grant of probate or an ancillary grant of administration with will annexed, in Form P6;
      4. If the application is for an ancillary grant of administration without will annexed, in Form P7;
    3. If there are 2 or more applicants, an affidavit in Form P8 from each of the applicants who has not sworn an affidavit referred to in paragraph (b);
    4. Two copies of a certificate from the chief executive officer under the Vital Statistics Act indicating the results of a search for a wills notice filed by or on behalf of the deceased;
    5. Any affidavit or material required by any of subrules (15) to (24) of this rule;
    6. One or more affidavits, in Form P9, that, collectively, confirm that the documents referred to in Rule 25-2 were delivered to all of the persons to whom, under that rule, the documents were required to be delivered;
    7. In accordance with subrule (7) of this rule, from the applicant, or, if there is more than one applicant, from at least one of the applicants, an affidavit of assets and liabilities, which affidavit must be
      1. Subject to subparagraph (ii) of this paragraph, an affidavit of assets and liabilities for domiciled estate grant in Form P10, or
      2. If subrule (8) applies, an affidavit of assets and liabilities for domiciled estate grant in Form P10 or an affidavit of assets and liabilities for non-domiciled estate grant in Form P11;
    8. In accordance with subrule (10), for each of the documents that are filed with the submission for estate grant and that are not written in the English language, an affidavit of translator in Form P12;
    9. If one or more of the executors has renounced executorship, whichever of the following that applies:
      1. If the executor has provided to the applicant a notice of renunciation in Form P17, that notice of renunciation;
      2. If the executor is deemed under Rule 25-11 to have renounced executorship, an affidavit of deemed renunciation in Form P34 prepared by the citor under Rule 25-11 (7) and any supporting affidavits of service;
    10. Any document required under subrule (3).
  2. Subject to subrule (5), the person wishing to apply for an estate grant must file with the documents referred to in subrule (2) (a) to (j) the following:
    1. If the application will be for a grant of probate or a grant of administration with will annexed,
      1. The originally signed version of the will, if that original exists or, if that original does not exist, a copy of the will, and
      2. If an order has been made that affects the validity or content of the will and that order has not yet been filed in the proceeding within which the estate grant is being sought, a copy of that order;
    2. If a grant of probate or equivalent, or a grant of administration with will annexed or equivalent, was issued in a jurisdiction that has not been prescribed for the purposes of section 138 of the Wills, Estates and Succession Act and the application under this Part will be for an ancillary grant of probate or an ancillary grant of administration with will annexed, the following:
      1. A copy of the foreign grant that has been certified by the issuing court;
      2. If the will is not attached to the foreign grant, a copy of the will that has been certified by the issuing court;
    3. If a grant of administration without will annexed, or equivalent, was issued in a jurisdiction that has not been prescribed for the purposes of section 138 of the Wills, Estates and Succession Act and the application will be for an ancillary grant of administration without will annexed, a copy of the foreign grant certified by the court out of which the grant of administration without will annexed, or equivalent, was issued.

After the grant application is sworn, file the application with the Probate Registry in the local courthouse. At that time a Court will charge a filing fee (currently $200, unless the estate has a value of less than $25,000, in which case there is no fee payable (Supreme Court Civil Rules, Appendix C - Fees, Schedule 1).

The time frame for the Probate Registry to review and approve probate applications can vary considerably, but generally the review process takes approximately two to three months.

Once you are granted probate, there are various things you can or must do. You can arrange to move the estate assets into your name, as executor. You must settle the deceased’s debts and any expenses that you incur in the course of administering the estate. You can convert assets into cash, if you think this is appropriate.

Proceedings Related to Estate Grants

Steps to Prove a Will in Common Form

If the will appears to be valid and no one challenges it, you may take these steps to apply to prove the will in common form.

  1. A wills search – contact the Vital Statistics Agency to confirm that they have not received any notice of a will later than the one that names you as executor.
  1. Notice of Proposed Application in Relation to Estate – complete Form P1, which is notice of the proposed application for the estate grant, and mail or deliver it at least 21 days before submitting the documents to the court for filing.

Deliver it with a copy of the will to each person named as executor or alternate executor, each beneficiary in the will, each person who is entitled to apply under the wills variation provisions of WESA, and each person who would be entitled to a share in the estate if there were no will.

If any person entitled to notice is under age 19, notice must be sent to that person’s parents or legal guardians and, for certain minors, also to the Public Guardian and Trustee.

In the case of a person who is (or may be) mentally incapable, notice must be sent to that person’s committee (if there is no committee, send notice to that person directly, and also to the Public Guardian and Trustee).

A lawyer could assist you in completing Form P1 and delivering it.

  1. Submission for Estate Grant – this form (Form P2 ) gives details about the parties. It also describes the documents that are filed in support of your application for a grant of probate.

Form P2 Parties: Confirm whether the definition of “spouse” applies, whether there are any children, and whether parties are members of the Nisga’a or any treaty nation.

  1. Affidavit of Applicant for Grant of Probate – this affidavit (in Form P3) identifies you and your relationship to the deceased. Use this form to confirm, among other things, that you have made a careful search for a later will and found none. Use Form P4 if there are irregularities with the will.
  1. Affidavit of Delivery – this affidavit (in Form P9 ) sets out the names of each person to whom notice has been mailed or delivered as required by law (as outlined in paragraph (2) above).
  1. Affidavit of Assets and Liabilities for Domiciled Estate Grant – this form (Form P10 ) sets out all the will-maker’s assets that pass to you under the will, wherever these assets are located. Certain liabilities must also be disclosed.

Notice of a Proposed Application in Relation to an Estate (Form P1) must include:

  • The deceased’s name, last address and date of death
  • The name and mailing address of applicant, and address of service
  • If the applicant is an individual, the city and country where the applicant lives
  • The nature and type of grant sought
  • The location of the registry where the documents are filed
  • Notice to the recipient that he or she may have specific rights or claims:
    • A right to oppose the application or resealing
    • A claim under the Family Law Act or WESA (subject to time limits),
    • A right to seek independent legal advice about this application
    • A right to seek security if the application is for a grant of administration (unless the Public Guardian and Trustee is the applicant)
    • A right to receive an accounting from the executor or administrator on distribution of the estate
  • Notice to the recipient that the grant being applied for may be approved 21 days after delivery of this notice, and that delivery is made on the date it was mailed by post (if it is delivered electronically, delivery must be acknowledged in writing)

Steps to Prove a Will in Solemn Form

If the will appears to have irregularities or problems with validity, or if someone is challenging the will, the will may need to be proved in solemn form. That means the court will have to hear the facts and interpret the will-maker’s intention and the terms of the will. You should have legal advice in a case like that.

For more information about some possible disputes that could arise, see the sections on “ Estate Litigation” and “ Wills Variation Claims.”

Even where you might be able to provide affidavits to clarify the will-maker’s intention, it may be more prudent to have a court prove the will in solemn form, to avoid challenges later.

  • Proof in Solemn Form is a proceeding used when there is a dispute (or potential dispute) as to a will’s validity. It will require the long-form Affidavit of Application for Grant of Probate (Form P4).
  • To prove a will in solemn form, you may need to start a new proceeding by petition, and you may need to come to court. The procedure is set out in Rule 25-14(4):
  1. To apply to the court for an order proving a will in solemn form, a person
    1. may, if there is an existing proceeding within which, under these Supreme Court Civil Rules, it is appropriate to seek that order, apply for that order by notice of application in that proceeding, or
    2. must, if there is no existing proceeding within which it is appropriate to seek that order, start a proceeding by petition under Rule 16-1 and seek the order within that proceeding.
Notice of Dispute

A person is entitled (under WESA, s. 106) to oppose an application for an estate grant by filing a Notice of Dispute in the form specified by Rule 25-10:

  • Notice of Dispute is a form (P29) to notify the court that someone opposes the grant application, perhaps claiming that there are problems with the will or that the person applying for the grant is not the proper person to apply

The Notice is essentially in effect for a year and can be renewed once without leave of the court. After the Notice of Dispute is filed, an estate grant will not be made until

  • A period of one year passes without the Notice having been renewed, or
  • The will is proved in solemn form, or
  • The Notice of Dispute is withdrawn (in Form P30), or
  • The court orders that it be removed (in Form P31).

Citation

WESA introduced simpler procedures to challenge a will, and various challenges can now be brought using the citation form.

  • Citation is a form (P32) demanding that a person appointed as an executor apply for probate
  • Deemed Renunciation: if that person served with the form fails to comply within 6 months, he or she is deemed to have renounced executorship (Probate Rules, Rule 25-11(5)).

Curing Deficiencies

If the will needs to be interpreted because the will-maker’s intent is not clear, or if there is a document that seems to be a will but doesn’t comply with the formalities, the court might be asked to interpret the will-maker’s intention and cure defects in the document. If there is an irregularity in how the will was signed or witnessed, a court might cure the defect (WESA, s. 37(2)) and declare the will to be valid.

The court must be satisfied that, despite defects, the document represents the testator’s final wishes (Hadley Estate, 2017 BCCA 311).

The BC Court of Appeal in Hadley Estate, 2017 BCCA 311, described WESA, s. 58 as conferring a broad discretion on the court:

Remedial in nature, it confers a broad discretion on the court to order that a “record or document or writing or marking on a will or document” be fully effective, despite non-compliance with the statutory requirements. Although s. 58 cannot be used to uphold a will that is substantively invalid, it permits the court to cure issues of formal invalidity in prescribed circumstances .

[...].

For an order to be granted under s. 58 of the WESA, the court must be satisfied that a document represents the testamentary intentions of the deceased person. Hadley Estate, 2017 BCCA 311

Rectification of Wills

Another process for correcting a will is rectification where the court maybe asked to delete minor errors in the wording of the will. An application for rectification must be made no more than 180 days from the date of the estate grant (WESA, s. 59).

Application by Personal Representative for Advice and Directions

The person administering the estate acts under the direction of the court (WESA, s. 103(2)). When the personal representative is unclear about what steps to take, the personal representative can apply to the court for direction (Probate Rules, Rule 25-14(8)).

If the executor believes there are no unknown creditors or beneficiaries, and that no claims may be made against the estate, the executor might seek direction of the court under the Trustee Act (s. 39) to distribute assets. (As a caution, this would not protect the executor from personal liability if new creditors or beneficiaries were to emerge).

39

  1. A trustee, executor or administrator may, without commencing any other proceeding, apply by petition to the court for an order that
    1. the trustee, executor or administrator be at liberty to distribute the proceeds of the estate he or she is administering among the parties entitled to them, having regard only to the claims of the persons the trustee, executor or administrator has been able to ascertain to be entitled and whose residence or address he or she has been able to find out, and
    2. the trustee, executor or administrator is not be liable for the proceeds of the estate or assets, or any part of them, so distributed to persons of whose claim and residence or address the trustee did not have notice at the time of the distribution.

Removal of an Executor or Trustee

After a grant is issued and a personal representative is appointed, the court has authority to remove that personal representative (executor) under certain circumstances. For example, an executor may be removed

  • When the conduct of the executor has endangered the estate, or
  • The executor has acted dishonestly

The court may appoint a person to administer the estate temporarily while there is an ongoing dispute as to who will finally be appointed executor. A person appointed temporarily in that capacity does not have the right to dispose of assets, but does have a right to be paid for performing executor duties (WESA, s. 103).

WESA (Part 6, Division 9, sections 157-161) deals with “Discharge, Removal and Substitution of Personal Representatives,” including how the personal representative or another party may apply to the court asking that the personal representative be removed by court order.

Revocation of an Estate Grant

If an executor is taking too long to act, or not acting in the best interests of the estate, the estate grant may be revoked. If the entire grant is revoked, the appointment of executor and authority to act as executor passes as if it had never been granted (WESA, s. 141).

Probate Fees

Once the application is reviewed, the Probate Registry will assess the probate fees that are payable. These fees are set out in the Probate Fee Act and are based on the gross value of the estate assets that were located in British Columbia when the deceased died.

$0 to $25,000: $0
$25,000 to $50,000: $6 for every $1,000 (or part of $1,000)
i.e., $25,000 estate = $150
$50,000 or more: $14 for every $1,000 (or part of $1,000)

For example, if the gross value of an estate is $125,000, the probate fee will be $1,200, which is in addition to the court filing fee of $200.

Intangible assets, such as bank accounts and investments, are generally deemed to be “within” British Columbia (even if the branch location is outside of British Columbia), and therefore are subject to probate fees.

Taxes

Role of Personal Representative

As executor or administrator of a deceased person’s estate, you are the personal representative of the deceased person. Under the Income Tax Act, it is your legal responsibility to:

  • File all required tax returns for the deceased;
  • Pay all taxes owing; and
  • Inform the beneficiaries of the amounts they receive from the estate that are taxable.

As an executor, you will have a year from the date of the deceased’s death before you must distribute the deceased’s estate to the beneficiaries. This is called the “ executor’s year.”

There were significant tax changes to the taxation of estates and trusts affecting the 2016 taxation year. For example, tax rates applicable to testamentary and inter vivos trusts changed, and a new Graduated Rate Estate was created, to provide potentially lower rates of tax for up to three years following the testator’s death. For advice on taxation in estate planning, consult a lawyer.

Income Tax Act

Filing Obligations

Depending on the circumstances, you may need to deal with different kinds of tax liability. As executor, you must file certain income tax returns for the deceased and the estate:

  1. You must file a T1 (General) return for any year before the year of death, if the deceased had not filed a return for that year and if tax is payable.
    1. Any late or unfiled returns must be filed as soon as possible.
    2. With respect to a prior year’s return where the deceased died before the normal filing deadline, the return must be filed within six months of the date of death, or the normal filing deadline, whichever is later.
  2. You must file a T1 (General) return for the year of death (January 1 to the date of death), in most circumstances.
    1. The return must be filed either six months from the date of death or on April 30 of the year following the year of death, whichever is later.
    2. If the deceased taxpayer carried on business as a proprietor or a partner in the year of death, the filing deadline would not be April 30 but June 15.
    3. As executor, you should arrange for this return to be filed as early as possible, so that you can get a Clearance Certificate from the Canada Revenue Agency.
  3. You must file a T3 return within 90 days of each fiscal period of the estate.
    1. The first fiscal period begins with the date of death. You may choose the date on which the first fiscal period ends, but that date must be no later than 365 days after the deceased’s death.

Depending on the nature of the deceased’s income, the estate may be allowed to file other “elective” income tax returns, and it might be a good idea to do so.

If you have not yet done so, retain an accountant to assist you in preparing the income tax returns. If you do not have an accountant in mind, a lawyer could assist you in finding an accountant to prepare the required returns for the estate.

Capital Gains

The Canada Revenue Agency considers that a person has sold or disposed of property and received the value of the sale just before death. This is called a http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/dmd/menu-eng.html deemed disposition]. The effect of a deemed disposition is that capital gains are calculated on the value at the date of death. Capital gains are calculated as the gain in the asset’s value from the date when it was purchased to the date when it was “sold” (the date of death). In most cases, half the capital gain is taxable.

This can become a concern in cases where, for example, the deceased owned real property that has gained value over his or her lifetime and is now subject to a significant tax bill. Depending on the tax situation of the beneficiaries, there might be concerns about capital gains and ways that an accountant or a lawyer can assist in addressing tax liability.

Clearance Certificate

An executor must obtain a Clearance Certificate ) from the Canada Revenue Agency before distributing property to any beneficiary (Income Tax Act, s. 159).

Apply for a Clearance Certificate (Form TX19 - Asking for a Clearance Certificate) once all of the deceased’s tax returns have been assessed. If there is a trust, a separate clearance certificate is needed for the trust.

If you fail to obtain a clearance certificate before making a final distribution of the estate to the beneficiaries, and then tax is assessed by the CRA, you risk being held personally liable for the unpaid taxes, interest and penalties owed by the estate.

Usually the CRA does not give a Clearance Certificate until they are satisfied that the estate has paid any tax that is payable based on an assessment of the date-of-death tax return. You should file the date-of-death income tax return as soon as possible, so that you can request a Clearance Certificate promptly.

Clearance Certificate.png

Non-Resident Beneficiaries

If one of the beneficiaries is not a Canadian resident, before you distribute any estate assets to that non-resident beneficiary you should obtain legal advice, and perhaps advice from an accountant. You may need to deduct non-resident withholding tax and remit it to CRA, or request a certificate of compliance from CRA.

In the case of a proposed distribution to a non-resident beneficiary, it might be appropriate for the personal representative to require the non-resident beneficiary to obtain a compliance certificate before the distribution is made. A compliance certificate confirms that the taxpayer has complied with the Income Tax Act (s. 116). An accountant is in the best position to advise the personal representative whether a compliance certificate is appropriate.

The tax that a non-resident beneficiary might be required to pay on Canadian source income depends on a number of factors: for example, the tax payable will depend on whether the income is dividend or passive income, or a capital gain from disposition of Canadian real estate.

If a beneficiary might be a non-resident of Canada for income purposes, as executor you should obtain tax advice to ensure compliance with CRA. Failing to do so may result in your being personally liable for such taxes.

Non Resident Certificate Complicance.png

Deceased Taxpayers: Required and Elective Returns

You need to file tax returns for any years for which the deceased didn’t file a return. If the estate earned any income after the date of death (such as rental income, or interest on bank accounts), then tax returns will have to be filed for the estate for each year after death, until the estate is wound up or paid out.

A deceased person is deemed to have disposed of most of their assets immediately before death and the resulting income, taxable capital gains, allowable capital losses, recaptured depreciation, etc. are included in the deceased’s final tax return.

Final T1 Return

The deadline for filing a final tax return for a deceased individual depends on whether that person carried on a business in the year of death.

If neither the deceased nor their spouse was carrying on a business:

Date of Death: | Deadline: January 1 to October 31 | April 30th of the following year November 1 to December 31| Six months after the date of death

If the deceased or their spouse was carrying on a business:

Date of Death: | Deadline: January 1 to December 15 | June 15th of the following year December 16 to December 31| Six months after the date of death

If the deceased’s will creates a spouse trust, the final return may be filed up to eighteen months after the date of death.

Generally, the tax owing by a deceased individual for the year of death is due on the later of 6 months after death or April 30 of the following year. So if the deceased died on December 1, 2005, and their deadline would otherwise have been April 30, 2006, you have until June 1, 2006. In addition, to the extent that the deceased has amounts included in their income in respect of rights or things or in respect of taxable capital gains or recaptured depreciation arising from the deemed disposition of capital property owned at death, the personal representative can elect to pay the tax in up to ten annual installments. The government charges interest on the unpaid tax.

Elective Return for Rights or Things

There are three elective returns an executor might file: for Rights or Things, for a Graduated Rate Estate, or for Partnership and Proprietorship Income. By filing the elective return, the executor could reduce tax that would finally be payable by the estate.

“Rights or things” are amounts that had not been paid to the deceased at the time of their death and that, had the person not died, would have been included in income when received. There are rights and things from employment and from other sources, including unused vacation leave paid after death, matured, uncashed bond coupons, Canada Pension Plan and Old Age Security payments for the month of death, and declared but unpaid dividends.

Filing a second T1 Rights & Things Return can minimize taxes payable by the estate as it allows income splitting at graduated tax rates.

If there is a separate T1 return filed for Rights & Things, it must be filed by the later of one year from the date of death and the date that is ninety days after the mailing of the Notice of Assessment in respect of the final return.

Elective Return for Trust

The estate must also file a T3 Trust return for income of the estate earned after the date of death. If the deceased’s will established a testamentary trust or inter vivos trust, you must file a T3 return for each of the trusts.

Unlike the final return noted above, which always must be filed, you may not have to file a T3 return if the estate is distributed immediately after the person dies or if the estate did not earn any income before distribution. If there is income earned after the date of death and the administration is completed in less than a year, you only need to file one T3 return covering the period of administration. If the estate administration period extends beyond one year, a separate T3 return will have to be filed for each "taxation year."

The "taxation year" of an estate is the period for which the accounts are ordinarily made up. Usually, the taxation year of the estate will end on the anniversary of the date of death or on December 31. Only a Graduated Rate Estate can have a non-calendar year end. The taxation year cannot exceed twelve months and after the year-end has been established it cannot be changed except with the permission of the Canada Revenue Agency (the “CRA”).

Elective Return for Partnership and Proprietorship Income

The Elective Return for Partnership and Proprietorship Income may be relevant if the deceased had a business. If the business had a fiscal year that is not a calendar year, and the deceased died after the end of the business fiscal year but before the end of the calendar year, the elective return would cover that period.

If the elective return is not filed, the entire amount is claimed on the final return.

Prior Years' Returns

If a person dies before the due date for filing taxes for the previous year, and has not yet filed a return for that previous year, the personal representative has 6 months from the date of death to file the return.

Transfer of Assets and Distribution of Estate

As a general rule, an executor has a year, although it can take longer to distribute the estate to the beneficiaries. It is difficult to forecast these dates with any degree of certainty. Various factors may influence how promptly the estate can be settled:

Any of these could delay disposition while you wait for time periods to elapse or seek to resolve the claims.

Generally the soonest you could expect to start disposition is 180 days (six months) after the estate grant is issued. That 180 days is to give beneficiaries who might want to file a claim for variation 180 days from the date of grant to do so. If you suspect there may be a claim, wait an additional 30 days because persons who make a claim will have 30 days after they file to notify you.

Types of Gifts

Gifts may be of personal property (such a gift is sometimes called a bequest) or real property (sometimes called a devise).

Gifts may be conditional. Conditional gifts may depend upon a particular event taking place, or a particular situation existing.

The will-maker may make specific bequests, giving particular assets to named individuals, or may broadly divide the estate assets among groups named as “issue” or “children.” If the will is so broadly worded that it makes gifts to unnamed “heirs” or ”descendants,” it may be unclear who they were meant for, so those gifts may be distributed as if the will-maker had died intestate (WESA, s. 42).

Gifts made for charitable purposes may be subject to the Charitable Purposes Preservation Act, which ensures that the gift continues to be used for those charitable purposes.

Gifts may also include heritage or cultural property that is subject to the First Peoples' Heritage, Language and Culture Act, or Provincial heritage objects designated under the Heritage Conservation Act. If you have doubts as to whether any land or objects included in the will may be designated for heritage or cultural protection, a lawyer can advise you.

Some gifts may also have a designated beneficiary, so they would go directly to that person and not be part of the estate assets at all.

Life Estate

A life estate is a gift to a beneficiary of the right to use real property for his or her lifetime. It is usually a gift provided to the surviving spouse, and it lets that spouse remain in the spousal home after the will-maker’s death. When the spouse dies, ownership of the home might pass to the will-maker’s children. It is a gift in trust, not an outright gift. The life tenant does not own the property.

It may be an inter-vivos trust if an owner transfers title in the home to his or her children, but leaves him- or herself a life estate in the family home, to live there as a life tenant. In that case there would be no transfer of title upon the death of the life tenant.

Failed Gifts

A gift in a will might fail if there is no beneficiary to receive it: perhaps the beneficiary died before the will-maker, or the identity of the beneficiary is too uncertain. Perhaps the gift to that beneficiary was invalid or has been revoked. A gift might also fail if there is no gift to give, perhaps because the will-maker no longer owns it, or it no longer exists when the will-maker dies.

Generally, a gift that exists but cannot be given to the beneficiary will go into the residue of the estate, unless the will specifies an alternate way of dealing with it.

Survivorship and Lapse

A beneficiary must survive the deceased will-maker for five days (WESA, s. 10) in order to take a gift under the will. If the will makes a gift to a person who dies before the will-maker, or dies less than five days after the will-maker, the gift to that person is said to lapse.

If a gift fails because the beneficiary has not survived the will-maker, the will might have a provision for giving it to another beneficiary. If the will doesn’t specify an alternate beneficiary, and if the beneficiary was a brother, sister, or child of the will-maker, the gift would go to the descendants of that brother, sister or child. Failing that, it would go into the residue of the estate (WESA, s. 46).

For example: Two spouses have left their entire estates to each other in their wills, and have not named alternate beneficiaries. Tragically, they are both seriously injured in the same accident. One dies immediately, and the other dies four days later. Neither will inherit under the other’s will. Their estates are administered as if they had each died without a will.

Ademption

A will cannot make a gift of an asset that the will-maker does not own (WESA, s. 157).

If the will-maker owned the asset and it was sold by a personal representative or a person acting on behalf of the will-maker, the beneficiary may be entitled to an asset or amount of equivalent value from the estate (WESA, s. 48).

Invalid for Duress or Undue Influence

Gifts that a will-maker might have made under duress or undue influence may be invalid. It used to be that people who witnessed a will could not also be beneficiaries. The concern is that witnesses may be in a position to exercise undue influence over the will-maker. Under WESA (ss. 40, 43) witnesses may be able to inherit if they are able to show the court that the will-maker was not improperly influenced in making the gift.

Uncertainty

A gift to a person whose identity is unclear, or to a charity or other organization that is not clearly identified, or that no longer exists at the time of the will-maker’s death, may fail for uncertainty.

A gift may also fail for uncertainty if the gift is made for a purpose that is unclear or cannot be accomplished.

To save some gifts made to charities for specific purposes, the Law and Equity Act allows that where a gift in trust seems to be made for purposes that are not entirely charitable, instead of leaving the gift to fail for uncertainty, the gift shall be designated entirely for the specified charitable purpose:

47 If a person gives, devises or bequeaths property in trust for a charitable purpose that is linked conjunctively or disjunctively in the instrument by which the trust is created with a noncharitable purpose, and the gift, devise or bequest would be void for uncertainty or remoteness, the gift, devise or bequest is not invalid as a result but operates solely for the benefit of the charitable purpose.

Revocation

A will may be revoked by creation of a later will, but a will made after WESA came into effect (March 2014) is not revoked by the will-maker’s later marriage (WESA, s. 55).

A gift in a will to a spouse can be revoked (WESA, s. 56) where the will-maker and that spouse later cease to be spouses. If the will-maker and that spouse have reconciled by the date of the will-maker’s death, there is no revocation.

Executor’s Year

As an executor, you will have what is called an “executor’s year” (which is a year from the date of the deceased’s death) before you are expected to distribute the deceased’s estate to the beneficiaries. The reason for this executor’s year is that it gives you an opportunity to identify and gather in all the estate assets and to pay all debts.

Consult a lawyer or accountant to discuss your situation and whether it is better to distribute assets or maintain a Graduated Rate Estate trust for up to three years following the will-maker’s death.

Accounts

Duty to Account

The executor will have a duty to account to beneficiaries and also to creditors (WESA, s. 142). Executors who fail to account completely or accurately may face personal liability.

Unless you are the sole beneficiary, as executor you must keep accurate accounts summarizing the administration of the estate. Before you distribute the estate among the beneficiaries, you must give them an accounting of your administration of the estate.

Time Period

Before you finally distribute the assets, check that you gave enough time

Form

Your accounting will set out the payments made by the estate and also your expenses and any executor’s fee you are charging. The amount may be up to 5% of the estate value according to the Trustee Act (s. 88), unless another amount is set in the will (Trustee Act, s. 90).

The accounts will generally include an inventory of the original estate assets, details of all money received and disbursed, and a summary of the assets on hand. The supporting books and records should be maintained until all clearance certificates have been issued.

The accounting should include:

  1. Details of the assets and liabilities of the estate at the date of the deceased’s death,
  2. Details of each receipt and disbursement during your administration of the estate,
  3. A list of the assets that you now have on hand,
  4. A calculation of the remuneration you intend to seek, if any, as executor (up to 5% of the estate value), and
  5. A statement of the distribution that you propose making.

Record Keeping

You may have already closed all the deceased’s existing accounts and transferred the assets into the name of the estate or the name of the beneficiary entitled to receive the asset. If not, do so now, or before distributing the residue of the estate.

You should have received any necessary clearance certificates concerning outstanding taxes and any required certificates of compliance for taxation of non-resident beneficiaries before distributing the estate assets.

Approval and Releases

You may have already had beneficiaries sign releases. A release is a contract promising that, in consideration for receiving a gift from the estate, the person signing promises not to make any claims against you. By signing releases, beneficiaries acknowledge receipt of their shares of the estate, approve your accounts, and release any claim that they may have against you or the estate.

If you have not yet received the releases, do so before distributing the estate.

Please note that if any beneficiary is a minor (WESA, s. 153), then additional steps (WESA, s. 157(3)) must be taken before you can distribute the estate. This might include notifying the Public Guardian and Trustee or the guardian of a trust set up for the minor.

Application for Passing of Accounts

Passing of accounts is governed by the Trustee Act (s. 99) and the Probate Rules (Rule 25-13).

The personal representative prepares a final statement identifying expenses and any fees he or she is charging for administering the estate. This statement has to be approved by the beneficiaries in a process called “passing of accounts.”

If the beneficiaries do not approve the accounts, the personal representative will need to apply to the court (with an affidavit in P38 ) and the accounts will need to be passed by the court. It may require the registrar to prepare and file a certificate in Form 39.

Even if the beneficiaries consent, the personal representative might decide to apply to the court for passing the accounts for protection against possible liability.

Discharge of Personal Representative

Without Court Order

A personal representative is not always required to apply to the court for formal discharge once the estate is settled. In a simple estate where the beneficiaries approve the accounts (or the personal representative is the only beneficiary), and there are no concerns about unexpected liabilities, applying for formal discharge might not be necessary.

With Court Order

The personal representative may apply (in Form P41) to the court for formal discharge (WESA, s. 157). The court may order discharge either

  • When the estate is settled or
  • Before the estate is settled, when another personal representative is being appointed to take over (WESA, s. 159)

The advantage of being formally discharged by the court is that it protects that personal representative against further liability:

WESA, s. 157(5) says, An order discharging a personal representative from office releases the personal representative from all actions, claims and demands arising from or in connection with acts or omissions of the personal representative while in office, except in respect of undisclosed acts or omissions.

Remuneration

Personal Representatives and Trustees

Entitlement

As executor, you are entitled to be reimbursed from the estate for any out-of-pocket expenses you need to pay for the proper administration of the estate. That would include search fees, filing fees, and costs of delivering notices, for example.

You may also claim fees for your time and effort. If you are the sole beneficiary, you wouldn’t likely claim fees, because they would be treated as income and be taxable for income-tax purposes. However, if you are dealing with a more complicated estate, you might choose to claim fees.

Reasonable professional fees (such as accountant fees or search fees) are proper estate expenses, and if you pay those fees personally, then the estate will reimburse you. However, if you engage a lawyer to perform your executor’s duties, the fees the lawyer charges to perform executor duties (distinct from legal work) must be paid by you personally, or must be deducted from the executor’s fee payable by the estate.

Amount

The maximum fees executors can charge for time and effort spent administering an estate is 5% of the value of the estate assets, 5% of the income earned on the estate assets during administration, and an annual .4% “care and management” fee based on the average market value of the estate. The “care and management” fee is traditionally charged only when the executor is managing a trust.

Executor fees may be subject to GST and are treated as income for tax purposes.

The Trustee Act sets out how much a trustee under a will is entitled to charge:

88 (1) A trustee under a deed, settlement or will, an executor or administrator, a guardian appointed by any court, a testamentary guardian, or any other trustee, however the trust is created, is entitled to, and it is lawful for the Supreme Court, or a registrar of that court if so directed by the court, to allow him or her a fair and reasonable allowance, not exceeding 5% on the gross aggregate value, including capital and income, of all the assets of the estate by way of remuneration for his or her care, pains and trouble and his or her time spent in and about the trusteeship, executorship, guardianship or administration of the estate and effects vested in him or her under any will or grant of administration, and in administering, disposing of and arranging and settling the same, and generally in arranging and settling the affairs of the estate as the court, or a registrar of the court if so directed by the court thinks proper.

Procedure

The procedure for fixing and approving payment to the personal representative is like the process for passing the accounts, and is set out in Rules 25-13 and 25-14 of the Probate Rules:

  • Apply in Form P41 and
  • Provide an affidavit in Form 40 describing the assets and liabilities of the estate and the actions taken in administering the estate.

The court might approve the application, require a hearing, or give other directions.

Lawyers

The lawyer may be instructed to do some or all of the executor’s work. The lawyer will be entitled to a fee for performing legal tasks, but if the lawyer also performs some executor tasks, the fee that the executor would be entitled to for performing those executor duties will go to the lawyer.

Determining what legal fees are proper or reasonably necessary for the services provided depends on the particular circumstances:

  • The complexity of the proceeding and the difficulty or the novelty of the issues involved;
  • The skill, specialized knowledge and responsibility required of the lawyer, which may relate to the amount involved in the proceedings;
  • The time reasonably expended in conducting the proceeding;
  • The conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the proceeding;
  • The importance of the proceeding to the party who is paying, and the result obtained; and
  • The benefit the legal services provided to the party who is paying.

If you are not satisfied with the lawyer’s bill for fees when it is rendered, you may require the lawyer to have the bill assessed by a registrar of the Supreme Court. The registrar will determine if it is reasonable, considering the circumstances set out above.

The law governing legal fees is set out in three main places: • Supreme Court Civil Rules, BC Reg 168/2009, Rule 14-1 (“Costs”) • Rule 25-13 (“Remuneration and Passing of Accounts”), and • Legal Profession Act, S.B.C. 1998, c. 9.

If you receive a lawyer’s bill that causes you concern, you have a right to ask a registrar to review the bill.

Beneficiaries as well as the executor will have a right to ask for a review of the lawyer’s accounts. In a case called http://www.canlii.org/en/bc/bcsc/doc/2014/2014bcsc970/2014bcsc970.pdf Feth (Estate of)], 2014 BCSC 970, the beneficiaries were in a position to indemnify the executor for expenses incurred, and so they were included among the parties who could request review of a lawyer’s bill under the Legal Profession Act, s. 70:

70 (1) Subject to subsection (11), the person charged or a person who has agreed to indemnify that person may obtain an appointment to have a bill reviewed before (a) 12 months after the bill was delivered under section 69, or (b) 3 months after the bill was paid, whichever occurs first

Insolvent Estates

If you are administering an estate where there isn’t enough money to pay the estate’s debts, you will probably be dealing with disappointed creditors and beneficiaries, and they might blame you. You should get legal advice.

WESA (Division 12) deals with insolvent estates. WESA (s. 170) says that where there isn’t enough money to pay all the estate’s claims, the claims must be paid in a prescribed order:

  • Secured creditors
  • Funeral expenses
  • Executor’s expenses
  • Wages to the deceased’s employees
  • Claims for spousal support or child support
  • Municipal taxes
  • Rent payments to landlord

Other claims fall further down the list of priorities, and all these claims must be paid before there are assets left to give gifts to beneficiaries (WESA, s. 170).

Estates of Indigenous Persons

The estate of an Indigenous or First Nations person might involve special considerations:

  • Settling the estate could be governed by the federal Indian Act, not WESA,
  • Devises of real property on reserve could fail, or involve other Band members and require approval of the Minister of Indigenous and Northern Affairs,
  • Gifts of personal property could include cultural artifacts (such as art, carvings, or masks), and disposition of cultural artifacts raises special concerns and potential liability for the executor, and
  • Probate could require approval of the Minister of Indigenous and Northern Affairs.

The federal Indian Act, R.S.C. 1985, c. I-5, applies to estates of Indigenous people who are registered (or entitled to be registered) as “Indians” under the Indian Act. The Act provides that the Minister of Indigenous and Northern Affairs has exclusive jurisdiction over testamentary matters of Indians.

The Indian Act s. 42(1) says,

Subject to this Act, all jurisdiction and authority in relation to matters and causes testamentary, with respect to deceased Indians, is vested exclusively in the Minister and shall be exercised subject to and in accordance with regulations of the Governor in Council.

Generally, the estate of an Indigenous person who ordinarily lived on a reserve will be governed by the Indian Act, while the estate of an Indigenous person who ordinarily lived off a reserve will be governed by WESA.

Procedures for administering estates of Indians are set out in the Indian Estates Regulations, C.R.C., c. 954. The federal government also provides online information about Estate Services for First Nations People and publishes a guide that is available online: General Information for Administrators.

WESA applies to estates of Nisga’a citizens (WESA, ss. 13-18.3) and could apply to estates of other Indigenous persons whose First Nation had executed a treaty and land claims final agreement with the federal and provincial governments and so become a “treaty First Nation” in BC.

WESA (s. 14) allows a treaty First Nation to get involved in an estate proceeding if the estate includes cultural property, to ensure that it is dealt with in ways that respect the treaty First Nation’s cultural laws or traditions. WESA (s. 14) also allows a treaty First Nation to become involved if there is a dispute about validity or variation of the will:

WESA s. 14 says,

  1. If the final agreement of a treaty first nation so provides, the treaty first nation may commence and may intervene in a proceeding under this Act in respect of the will of a treaty first nation member of the treaty first nation that provides for the devolution of cultural property.
  2. If the final agreement of a treaty first nation so provides, in any judicial proceeding under this Act in which
    1. the validity or variation of the will of a treaty first nation member of that treaty first nation, or
    2. the devolution of cultural property of a treaty first nation member of the treaty first nation is at issue, that treaty first nation has standing in the proceeding.


There are special considerations for devises of real property situated on a First Nations reserve. Under WESA, a will-maker cannot leave the property to a person who is not a member of the First Nation entitled under that Band’s laws and customs to live on the reserve (WESA, ss. 18.2). Similarly, under the Indian Act, a devise of land situated on reserve may be declared void (Indian Act, s. 46(1)(d)).

Bringing a Foreign Grant into BC

A “foreign grant” is an estate grant issued by a court outside British Columbia (WESA, s. 1), generally to a representative who is outside of BC.

To make that grant effective in BC, the foreign representative must apply to the court in BC, using Form P21. The foreign representative must give notice to the people who would be affected by the grant (WESA, s. 138 and Rule 25-2(1)). If the court approves, the foreign grant (which is already “sealed” with approval of the foreign court) is said to be “resealed” with the approval of the BC court.

For more detail, Rules 25-6 to 25-9 of the Probate Rules specify the procedure for resealing a foreign grant, and how to deal with special circumstances.

If the deceased had assets outside BC, or you dispute the grant to another executor who is administering the estate, you should get legal advice.

Wills Variation Claims

When a person dies leaving a will, any spouse or child of the deceased can ask the court to vary the will if it does not “make adequate provision for the proper maintenance and support” (WESA, s. 60) of that spouse or child.

The current law, WESA, has not changed the law on wills variation claims that was set out under the old law, the Wills Variation Act, R.S.B.C. 1996, c. 490. So cases that were decided under that old act are still relevant.

The proceeding to vary the will must be started within 180 days of the date of the estate grant, and notice of the claim must be served no later than 30 days after the end of that 180-day limitation period. This means that an executor should not make any distribution of estate assets until at least 210 days after receiving the grant. If for some reason the executor or a beneficiary wants to make a distribution of assets before expiry of the 210-day period, the written consent of all persons who received Notice is required, even from those who were not named as beneficiaries in the will itself.

WESA (s. 61(4) provides that if an action for variation has been brought by one person who is entitled to apply, the limitation period is deemed to have started to run on behalf of all persons who might apply:

61 (4) If an action has been commenced on behalf of a person under this Division, it may be treated by the court as, and so far as regards the question of limitation is deemed to be, an action on behalf of all persons who might apply.

If the claim for variation involves real property in BC, the person making the claim may file a certificate of pending litigation (CPL) with the Land Title and Survey Authority (LTSA) against the property within 10 days of starting the wills variation proceeding. The LTSA has issued Practice Note 04-10 to describe the correct form of CPL to file. A lawyer’s help will be needed to file the document.

A will-maker generally has a moral duty (as recognized at law) to provide for a spouse and children in the will. However, there are circumstances where there may be no such duty, or where excluding some beneficiaries or dividing an estate unequally might be just and equitable.

In Tataryn v. Tataryn Estate, the Supreme Court of Canada in 1994 identified relevant factors in determining whether a will-maker has made adequate, just and equitable provision for a spouse or child. That case involved a will-maker who had wanted to disinherit one child, leaving the bulk of the estate to the other, and limiting the surviving spouse’s control over the estate. The Supreme Court of Canada discussed the needs, moral claims, and legal claims of the parties, and increased the legacies to the spouse and disinherited child.

The circumstances that might support or negate a will-maker’s moral duty to provide for an adult child were recently identified in Brown v. Pearce Estate (2014 BCSC 1402):

  1. Contribution and expectation: Contributions by the child in the form of caring for the will-maker or growing the will-maker’s estate will generally serve to strengthen the moral obligation. Also, promises made by the will-maker as to supporting the spouse may give rise to expectations that would affect what is fair and just in the circumstances.
  2. Misconduct/Poor character: Section 6(b) of the Act empowers the court to refuse variation to a person whose character or conduct, in the opinion of the court, disentitles him or her to relief. Such misconduct is measured as at the date of death, not subsequently, and must be directed at the will-maker. Generally speaking, the conduct must be relatively severe in order to justify disinheritance.
  3. Estrangement/Neglect: A will-maker might not have a moral duty to an adult child if there had been a long period of separation or estrangement that was caused by the child.
  4. Gifts made in the will-maker’s lifetime: Where a will-maker has transferred assets or made gifts to a child during the will-maker’s lifetime, there might be no further duty to provide in the will. On the other hand, if the will-maker has made greater gifts to other children, there may be a duty owed to the child who received less.
  5. Unequal treatment of children: Unequal treatment of children may be fair in the circumstances, depending on their relative independence and needs, and considering what other gifts or benefits they had been given, but the presumption is that independent adult children should be treated equally.
  6. Will-maker’s reasons for disinheritance: Where a will-maker gives reasons for providing only a small (or no) inheritance to a spouse or child, the court considers whether those reasons are valid and rational: “valid” reasons are rooted in fact, and “rational” means there is a logical connection between these reasons and withholding inheritance. If those reasons seem valid and rational, then the burden shifts to the person challenging the will to show why they are not.

You should seek legal advice if there is any risk of a dispute among beneficiaries or if there are any spouses or children who have been disinherited or provided for in what seems to be an unequal manner. Remember that a personal representative may be personally liable for mistakes such as distributing the estate assets to the wrong people.

Closing Matters

As a final check, when these things have been completed, the executor’s work is finished:

  • A Notice to Creditors was published (f necessary), and the time for creditors to come forward elapsed,
  • All debts and claims have been paid,
  • A clearance certificate was obtained from Canada Revenue Agency,
  • The beneficiaries provided releases,
  • If security or a bond was required, it has been cancelled,
  • All estate assets have been distributed to the beneficiaries,
  • An accounting has been provided to beneficiaries and some creditors.

Resources

Online Resources

  • BC Courts website provides fact sheets on court proceedings
  • Following a Death” provides information about Canada Pension Plan, death benefits under the Plan, and steps following a death
  • Heritage Law’s website contains current information

Legislation

Regulation and Forms

Form Name Form #
Affidavit in support of application for estate grant (PDF) P8
Affidavit in support of application to pass accounts (PDF) P38
Affidavit of applicant for grant of probate or grant of administration with will annexed (short form) (PDF) P3
Affidavit of applicant for grant of administration without will annexed (PDF) P5
Affidavit of assets and liabilities for domiciled estate grant (PDF) P10
Certificate (PDF) P39
Citation (PDF) P32
Estate grant (PDF) P19
Notice of proposed application in relation to estate (PDF) P1
Notice of renunciation (PDF) P17
Statement of account affidavit (PDF) P40
Submission for estate grant (PDF) P2