A will is a legal document 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”). Please visit our blog article “When Should You Make a Will” [http://touchstonelawgroup.com/kelowna-lawyers/make-will/] for a summary of how your estate would be distributed under the rules of intestacy set out in WESA.
Dying without a will can create problems for those you leave behind. Three potentially unfavourable consequences of dying without a will include:
1. No Executor or Guardian
An executor appointed under a will may act almost immediately upon death once he or she has obtained a grant of probate or administration from the Supreme Court of British Columbia. This process confirms the appointment of the executor and is required so that the executor can take steps to both protect and eventually transfer various assets. When there is no will in place, an administrator must be appointed by the court. WESA establishes the order of priority for those people who have a right to administer the estate in the event that the deceased dies intestate. A person applying to be the administrator of an intestate estate must then obtain the consent of every person with an equal or greater right to apply. If a potential administrator’s application is contested this process could become time consuming and costly.
The delay in appointing an administrator can be extremely problematic if it is desirable to be able to deal with the assets in a timely fashion. For instance, where the deceased operated a company or business prior to death.
If there are no next of kin willing and able to handle this responsibility, then the Public Guardian and Trustee may choose to administer the estate. This may or may not be what you would have wanted.
2. An Undesirable Distribution of Assets
If a person dies without a will, the distribution of the deceased’s property is determined in accordance with the intestacy scheme set out in WESA. Because WESA determines who will inherit what, this may not be the same as how you would have divided it and may even leave some beneficiaries poorly provided for. Ultimately, without a will, you are unable to exclude or include beneficiaries. You must depend on the law and the government to decide the economic fate of your family and loved ones. By having a will in place you can have the peace of mind of knowing you’ll appropriately provide for your loved ones as you would have intended.
Dying without a will can also result in unfavourable tax consequences as you may be subject to taxes you could have avoided with proper estate planning. Proper planning may be able to reduce the income tax owing from the sale of your assets on your death. We recommend that clients also work with an accountant in order to fully understand the potential tax implications of their estate plan.
Please let us know if you have any questions regarding the above or your estate planning needs. We would be happy to discuss how your estate would pass under the intestacy rules or under your current will, if any.
Author: Kelly Newby, Summer Student
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: email@example.com
Danielle (Dani) Brito: firstname.lastname@example.org