The passing of a friend or family member is a difficult and emotional time for all. However, there are a few things that you can do during your lifetime to ensure that the administration of your estate is as smooth as possible for your loved ones. In this article, we will discuss five “bucket list” items to do during your lifetime to minimize the burden on the individuals administering your estate after you pass away.
1. Create a Will and Keep it Current
A will is a legal instrument which sets out how your estate (including both your assets and liabilities) will be distributed upon your death. If you pass away without a validly executed will, your estate will be distributed in accordance with the default “intestacy” rules set out in Part 3 of the Wills, Estate and Succession Act of British Columbia (“WESA”) which may not be consistent with your wishes. For more information about the default intestacy rules, please see our article titled “When Should You Make a Will”
Your will also names the executor of your estate. Your executor is the individual responsible for collecting your assets, paying your liabilities (if any) and ultimately distributing the balance of your estate to your beneficiaries. It is important to name an executor (and, ideally, alternate executor) that you trust and who you believe is capable of administering your estate. If you do not appoint an executor under your will, the court may grant administration of your estate to one or more of the following persons (in the following order of priority) which may not be consistent with your wishes:(a) your spouse or a person nominated by the spouse; (b) your child having the consent of a majority of your other children; (c) a person nominated by your child if that person has the consent of a majority of your children; (d) your child not having the consent of a majority your children; (e) an intestate successor other than your spouse or child, having the consent of the intestate successors representing a majority in interest of your estate, including the intestate successor who applies for a grant of administration; (f) an intestate successor other than your spouse or child, not having the consent of the intestate successors representing a majority in interest of your estate, including the intestate successor who applies for a grant of administration; (g) any other person the court considers appropriate to appoint, including, without limitation, and subject to the Public Guardian and Trustee’s consent, the Public Guardian and Trustee.
You should also appoint a guardian if necessary (and, ideally, alternate guardian) for your minor children in your will. Please note that there is specific language that should be included in your will (along with the will of the guardian you appoint) to ensure that the appointment is valid and enforceable. We recommend that you consult a lawyer to ensure that this type of provision is properly worded.
We strongly urge you to retain a lawyer or notary to prepare your will rather than using a do-it-yourself will kit. For information on some of the risks associated with using do-it-yourself will kits, please see our article titled “Do-It-Yourself Will Kits”
We recommend that you review your will periodically to ensure that it continues to operate in a manner that reflects your testamentary wishes. Examples of material changes in your affairs that may change the operation of your will or your testamentary wishes include the: birth, or death of a person close to you, commencement or termination of a marriage-like relationship (including a common law relationship), acquisition or disposition of assets (including real estate and gifts), relocation outside of British Columbia, undertaking of any liabilities, and changes in tax, wills or estates laws. It is prudent to review your Will periodically even if you are unaware of any changes in circumstances that may affect the will.
2. Let Your Executor Know the Location of Your Will
When you pass away, one of the first duties of your executor is to conduct a diligent search for any testamentary documents prepared by you during your lifetime. Your executor’s search will be significantly easier if you keep them up to date on the location of your most current will. In addition, it is important to ensure that your executor has the key and/or code necessary to access your will, if applicable. For tips on where to store your will, please see our article titled “Where to Store Your Will”: http://touchstonelawgroup.com/kelowna-lawyers/store-will/
3. Don’t Jump Into Joint Tenancy
When two or more people own assets (real estate, bank account, etc.) together, they will either own the property as joint tenants or tenants in common. With joint tenancy, the asset would automatically transfer to the surviving joint tenant by way of the right of survivorship. This means that the asset would not require a grant of probate from the Supreme Court of British Columbia and probate fees would not be payable. When one tenant in common passes away, their respective share in the asset would pass through their estate and a grant of probate would likely be required to transfer the asset to that person’s ultimate beneficiaries.
Joint tenancy is a great estate planning tool in certain limited circumstances. For example, if spouses wish to leave their entire estate to each other joint tenancy can be faster and less expensive than having the asset pass under the deceased spouse’s will. We are often asked if it is prudent for a single parent to add an adult child as a joint tenant on their house, bank account, etc. In most cases the answer is no. When multiple children are involved, this can lead to lengthy and expensive litigation to determine whether the asset was intended to be a gift to the joint tenant child or if that child holds the asset in trust for the estate. If the parent’s intention is to give the child access to their money to pay bills, it is generally preferable to appoint the child as the parent’s attorney in a power of attorney.
4. Maintain a List of Important Information
On a practical note, it is very helpful for your executor to know as much about you, your assets you’re your liabilities as possible. We recommend keeping a list of all relevant information that you think may be helpful to your executor and to update your list as your assets, liabilities and digital accounts change. Helpful items include, but are not limited to, the following:(a) Your place of birth; (b) The name and contact information for your spouse, children, and next of kin, if applicable. This is particularly important if your executor is not familiar with your family circumstances; (c) The name of your financial institution(s) where you hold accounts and bank account numbers; (d) The name of your investment(s) and account numbers; (e) The addresses of all real estate that you own or have a beneficial interest; (f) The name of your lender(s) and mortgage reference numbers, loan documents, etc.; (g) Copies of promissory notes, loan documents, etc. to which you are entitled to collect; (h) Your logins and passwords for all digital assets (computers, cell phones, email addresses, online banking; and (i) The name and contact information for your financial advisor, accountant, lawyer, and any other professional that you ordinarily deal with.
5. Use Your Full Legal Name on Accounts/Assets
When your executor applies for a grant of probate, they are required to provide the Supreme Court of British Columbia with a comprehensive list of all of your pseudo names. In certain cases, if the name on the grant of probate does not match the name in which an asset is held exactly, the asset cannot be transferred. This means that your executor will have to apply to the Supreme Court of British Columbia which will cause additional costs and delays on wrapping up your estate. Therefore, always hold all accounts and assets in your full legal name to prevent this problem from occurring.
As the saying goes, “nothing in life is certain except death and taxes”. We can’t help with your taxes, but we are here to help make your passing and estate administration as smooth as possible. If you have any questions with respect to the above or estate planning in general, please do not hesitate to reach out to one of our lawyers practicing in the area of estate planning and estate administration.
Author: Danielle (Dani) Brito
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of estate planning and estate administration at the following:Jennette Vopicka: firstname.lastname@example.org Danielle (Dani) Brito: email@example.com Jane Otterstrom: firstname.lastname@example.org