Probating an Estate: The Basics…
When someone passes away, British Columbia law governs how his or her assets (“the estate”) will be distributed. The estate includes (but is not limited to) any land, houses, money, investments or personal items the deceased owned. If the deceased has left a will, a person will be assigned to distribute the estate (“the executor”).
If you have been named executor…
First, confirm with the original will you have been named. If the deceased has not provided you with the location of the original will you may want to check their home, their safety deposit box, or ask the lawyer who drafted the will.[i] Alternatively, you can try searching to see if the will was registered with the Vital Statistics Agency. If it was, a notice will tell where the testator kept the original will. You will also want to confirm with the Vital Statistics Agency that you have the final will of the testator and that there is not a newer version.[ii]
Whether to take on the task…
If you have been appointed an executor of a will, you should think seriously about whether you are willing to take on the role. Be aware that you could
- be committing to something that will take a lot of time and energy
- be subject to litigation if the will is contested
- be sued by beneficiaries or creditors if you are negligent in your duties.
However, keep in mind that the deceased trusted you to follow their wishes and believed you would a good job. If you are nervous, it is best to speak with a lawyer about the particular details of the will. If you are concerned about the cost, an executor is generally reimbursed by the estate for most of the expenses in relation to dealing with the estate and paid a small percentage fee.[iii] Also keep in mind, if you legally renounce your position as executor, you may not reclaim it.
If you decide to be an executor…
You may have to probate the will. This is the process of obtaining a court ruling that the will is valid and can be done by applying to a court for a “grant of letters probate.” Whether a will needs to be probated depends on the specific circumstances of that will. Wills will require submission where:
- there are competing wills
- there is a challenge to validity of a will, specifically whether it expresses testator’s intent (i.e. undue influence)
- an executor needs proof of authority where institutions holding assets or involved in their transfer to beneficiaries insist on probate
For example, if you are an executor and your brother John is angry that you received the antique car collection your father owned, you will want to probate the will. Or, if the testator had a large number of investments, the bank may want to see a probated copy of the will so it knows that the executor has the power to deal with the money.[iv]
However, many transfers can occur without probate, if for example:
- all property is owned jointly (for instance, with a spouse)
- the estate is comprised of small bank balances, personal ornaments, bicycles, clothing, cash, coins, gold bars, furniture, electronics, books, collections, wine, etc.
Be aware of what items within a Will incur probate fees…
The Probate Fee Act requires the executor of an estate to pay the British Columbia government probate fees calculated based on the value of the estate.[v] However, not all assets are included in this total. There are two main requirements:
(1) if real and tangible property, it must be situated in BC, or if intangible, deceased must have been ordinarily resident in BC, and
(2) property passes to personal representative (i.e. not joint tenant or designated beneficiary).[vi]
No probate fees are incurred if the estate is valued at less than $25,000. Although this is more important to know for the testator to know when planning his estate, the executor must be aware of s. 2(4) of the Probate Fees Act which requires that any asset learned of following probate must be disclosed to the court and subsequent probate fees must be paid to the government.[vii]
Be aware of the Wills Variation Act…
The Wills Variation Act allows any child or spouse of the deceased to apply to the court to vary or change the terms of the will.[viii] The Act has a six-month deadline (starting from the granting of probate). It is best practice to wait six months before distributing the assets, or alternatively you can obtain releases from each potential claimant. Remember that as an executor you are legally responsible if you distribute the assets to the wrong people and could be sued.
As an executor of an estate, you are responsible for the following tasks:
- Check to see if the will specified a particular burial or cremation process. It is also courteous to consult with family members or loved ones, though the executor has final determination of funeral arrangements. The executor also bears responsibility for funeral costs, though these are generally paid out of the estate.
- Take steps to safeguard the assets of the deceased. Lock up the residence and advise the police if it is not under proper supervision. Arrange for redirection of mail. Check leases and tenancies, arrange for payment of rent, and give notice if necessary. Check utilities are paid to date.
Keep good records:
- Document all accounts of assets, liabilities, receipts, and disbursements, and entitlement to be reimbursed for all proper and reasonable expenses.
Safety deposit box:
- You will need to check for a safety deposit box. If there is one, photocopy all documents to bring to your lawyer. Examples include:
- certificate numbers of securities, numbers and kinds of shares, registered owners, dates of maturity, expiry date of warrants and conversion rights, transfer agents of stocks and bonds, date of issue of certificates etc.
- Contact all financial institutions the deceased dealt with, inform them of the death and request lists of assets and liabilities.
- Contact all insurers, inform them of the death and request claim forms and written confirmation of benefits. You may feel more comfortable asking your lawyer to deal with this.
- Check the insurance on the deceased’s assets (e.g., motor vehicle, house, furniture), including expiry date.
- Make banking arrangements. For example: arrange for accumulation of income due to the deceased at death or in the future; collect and bank any outstanding cheques (e.g., pensions, dividends, interest, salary).
- Review cheques drawn by deceased before his death if there is any question of incapacity.
- If the deceased had a business, arrange for its interim management. Check the will to see if the deceased has specified how this should be done.
- Check with employer regarding death benefits.
- Notify and cancel pensions and annuities.
As you will note, this list is extensive. Also, please note that there may be additional duties … each estate probate process in BC is has unique requirements depending on the estate. You may want to consult with a lawyer depending on the size and complexity of the estate.[ix]
[i] The Canadian Bar Association, “Your duties as an Executor” (2010) Available at: http://www.cba.org/bc/public_media/wills/178.aspx.
[iv] Law Society of British Columbia, “Practice Checklist Manual, Probate and Estate Administration Manual” (2010) Available At: www.lawsociety.bc.ca/docs/practice/checklists/G-4.pdf.
[v] Probate Fee Act, SBC 1999, c 4
[viii] Wills Variation Act, RSBC 1996, c 490.
[ix] Note: This list has been drawn from a larger one in the Law Society’s Practice Manual, supra.