League and Williams Lawyers

Category: Wills and Estates

  • Revoking or Changing a POA (Power of Attorney) Agreement

    Revoking or Changing a POA (Power of Attorney) Agreement

    As part of proactive estate planning, it is often a good idea to appoint a power of attorney (POA). A POA is authorized to make financial and legal decisions on your behalf. The primary purpose is to have someone ready to act on your behalf if you are unable to. In an enduring POA agreement, the appointed person has authority, once you become incapable, to make any financial/legal decisions you could normally make yourself. It’s a good idea to appoint a POA before it becomes too late to do so. After a person becomes incapable, someone will have to apply to become their committee to make decisions on their behalf.

    The appointed attorney must act in your best interests with all the decisions they make on your behalf. There is not necessarily anyone watching over the POA, ensuring that they’re making the best decisions for you. Sometimes, the POA isn’t making the “right” decisions and you may wish to change or revoke the POA agreement.

    Mental Capacity Required

    A POA can resign from their duties at any time.

    In order to change or revoke a POA agreement, you must be mentally capable of understanding the nature of the decision. The only person who is able to revoke the agreement is the person who is the subject of the agreement.

    Some people wonder how a person could be mentally capable of modifying the agreement, but not capable of managing their own financial affairs. Under the Power of Attorney Act, an adult is incapable of managing their affairs if they cannot understand all of the following:

    • The property the adult has and its approximate value;
    • The obligations the adult owes to his or her dependents;
    • That the adult’s attorney will be able to do on the adult’s behalf anything in respect of the adult’s financial affairs that the adult could do if capable, except make a will, subject to the conditions and restrictions set out in the enduring power of attorney;
    • That, unless the attorney manages the adult’s business and property prudently, their value may decline;
    • That the attorney might misuse the attorney’s authority;
    • That the adult may, if capable, revoke the enduring power of attorney;
    • Any other prescribed matter.

    It’s possible to prove someone is capable of understanding a POA revocation without being able to manage their own affairs.

    Modifying the POA Agreement

    You must draft an amendment to make a change to a POA agreement. An amendment is a separate document that clarifies what you wish to be changed from the original agreement. You must sign and witness the amendment to ensure validity. The changes are immediately effective and the appointed POA must adhere to the new changes by law. If they don’t want to or feel that they are not able to, they must resign immediately. The appointed attorney doesn’t have any say in the changes and has no authority to make changes to the agreement.

    Revoking a POA

    In some cases, the original POA agreement is outdated and should be revoked. Usually, a new POA is appointed thereafter. To revoke a POA agreement, you must give the appointee a signed notice. A notice of revocation can be a very simple document stating you are revoking the POA. It should include the date, the attorney’s name and your name with a signature.

    Further, it’s important to know people can have two POAs at once. If you appoint a new POA, there is no presumption of revocation of the original POA. If you do not want two attorneys, you should remember to revoke the original agreement.

    Anyone who is capable of understanding the consequences of their choice is able to modify or revoke a POA agreement. The person doesn’t need to provide any reasoning for their decision to revoke or modify. The appointed attorney won’t be able to decline a proposed change or revocation and must adhere to the ruling. The only other option available to the attorney is to resign.

    If you want to revoke or modify your power of attorney agreement, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Estate Planning: Six Reasons Why an Update May be in Order

    Estate Planning: Six Reasons Why an Update May be in Order

    Many people don’t start thinking about their estate plan until they are thinking of retirement, or see will writing as a ‘set and forget it’ exercise. Will writing can be a long, tiring and emotionally stressful process and as a result most will-writers prefer not to think about the document once it’s been done. Unfortunately, lack of timely updates can create discrepancies between the terms of one’s will and their true intentions at the time of their death.

    Everyone’s life changes over time, often unexpectedly, and it’s normal to forget to reflect these changes in estate plans and make updates accordingly. It is good practice to review a will and estate plan annually to ensure that everything is up-to-date and accurately reflects how the will writer intends to distribute their estate. If you’ve had a major change or addition to your life and family, it may be time to update your will. For more on this, read our blog on what to do after a will is written. If you haven’t written a will yet, read our blog post on why you should have a will and the benefits of having one.

    How You Can Update Your Will

    If, as a result of your review, changes to your estate plan are needed, there are two main ways of making modifications: writing a codicil and writing a new will. Each option has different benefits depending on your individual circumstances. While it might sound burdensome to re-write a will or draft a codicil, it’s often much easier than it sounds. Usually, the new will is very similar to the original and simply incorporates the few changes that the writer wishes to make. For more information, read our blog on how to make a revision to your will.

    In addition to a will, there are other components to a well thought out estate plan that you can consider, including:

    • A power of attorney – appointing an individual with the legal right to manage your legal or financial affairs in case you are unable to;
    • A healthcare proxy or representation agreement – this enables someone to make healthcare decisions on behalf of someone else if they’re incapable; and,
    • An insurance coverage review – terms of a will do not automatically apply to property such as life insurance, RRSPs, RRIFs and TFSAs (if the accounts have named beneficiaries).

    Some of the most common life events that require a will to be modified are as follows:

    1. Birth of a Child

    A will can be varied by a judge in BC if it is ruled to be an unfair under specific criteria.

    Arguably the most significant life-altering event in someone’s life is the birth of a child. Parents can become busy with their newborns and forget to update their will to reflect this important change. This can be true in the case of grandchildren being born as well. While succession plans may seem obvious, you should clearly express your intentions in a will. This is particularly important if you have multiple children who you’d like to inherit different assets. Parents or guardians of minors should appoint a guardian to care for them in the event of their parents’ death. A guardian is someone who would be the legal caretaker for the children until they reach the age of majority, and you should update to your will to include information for your child’s potential guardian.

    2. Marriage and Divorce

    Spouses are typically the most prominent beneficiary in their partner’s will. Following a marriage, separation or divorce, people should clearly reflect their change of marital status in their will. Many spouses choose to form a joint or mutual will which means that the first person to die will have their entire estate transferred to their spouse. If the other spouse dies, then the estate is distributed according to their will. Remember that someone who has lived in a “marriage-like” relationship with someone for two or more years may have rights for spousal support as if the couple were legally married. For more information, read our blog on spouses.

    3. Receipt of an Inheritance

    If a person inherits an estate asset, they should update their will. This is crucial, especially for high-value assets. Excluding a large asset from the will may result in intestate distribution of the asset. Intestacy laws could divide your estate contrary to your wishes. Always remember your will to reflect new inherited assets as soon as possible.

    4. Business Creation and Sale

    Business owners must revise their wills to include their company shares and their interests in the company. Keep the document up to date if the company relationship or structure changes. Sometimes, parents want one child to control the business. The other children may pursue different careers. One child may buy siblings’ shares to ensure a fair transaction.

    5. Tax Legislation Changes

    Tax laws change frequently. People may not know about available tax advantages when distributing an estate. Consult estate planning professionals to keep your will current and ensure efficiency for your financial planning. Maximize your estate’s potential value under the latest tax laws by keeping your will updated.

    6. Death of Named Beneficiaries

    Named beneficiaries might die before the will writer. In such cases, redistribute the estate to other family or friends. Otherwise, intestacy rules may apply. Update your will to distribute assets as desired. For more on the rules of intestacy in British Columbia, see Part 3 of the BC Wills, Estates and Succession Act.

    Update Your Will- Next Steps

    Updating your will after a life-altering event isn’t difficult. However, excitement or despair may make you forget estate plan consequences. Regularly review your estate plan with an experienced lawyer for effective planning for the future. Ensure your will and related documents reflect your intentions at the time of your death.

    Looking for more information? Read our page on the basics of estate planning.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Varying a Trust: Courts Approving Trust Fund Modifications

    Varying a Trust: Courts Approving Trust Fund Modifications

    In the estate planning process, people commonly use trust accounts to give gifts. They can also create purpose trust accounts, which designate funds for a specific purpose. Some common trust accounts that are made in wills include:

    • Trust accounts made for minors to give them parts of the account at certain intervals or milestones of their life;
    • Purpose trust accounts, where the contents are to be spent for a specific purpose (such as a pet trust account);
    • Trust accounts made for children in a past relationship, where the funds can be used by the testator’s spouse until their death; or,
    • Trust accounts for disabled beneficiaries.

    Purpose Trusts and Estate Planning

    Trusts can have lengthy terms or be in effect for many years before the beneficiary recieves the entire gift. Sometimes the terms of the trust become outdated, preventing the beneficiary from using the trust to its fullest potential. The courts are sometimes able to vary the terms of the trust to create more realistic and useful terms.

    In essence, the terms and overall purpose of a trust can be anything that the testator wishes. This sometimes causes unrealistic conditions in trusts. For example, a person writes in their will, ”$100,000 is to be put in a trust account for my daughter. These funds are to be used to support her future schooling. My daughter will only be entitled to withdraw from this trust account for the purpose of paying overdue library books.” While this trust has a beneficial purpose, it is not realistic that the daughter will require $100,000 to pay overdue books. In this case, the courts could vary the trust for the daughter, adjusting the terms to better reflect the overall intention of the trust and enable the daughter to use the trust to support her education more effectively.

    Trust and Settlement Variation Act

    The Public Guardian and Trustee of BC can file to have a trust modified on a person’s behalf.

    In BC, the Trust and Settlement Variation Act (TSVA) specifies the conditions in which the courts are able to vary a trust. Any interested party is able to come forward before the courts to request a variation. The courts have the discretion to either approve the request and vary the trust, to revoke the trust or enlarge the powers of the trustee. Variations occur most commonly with trusts that the beneficiary cannot reasonably utilize, although the courts have no specific criteria for approving a request.

    Who Can Request a Trust Variation

    The TSVA is intended to benefit people who are incapable of defending their legal and personal interests. It specifies the following people are able to have a trust variation request filed on their behalf:

    1. Any person having, directly or indirectly, an interest, under the trusts who by reason of infancy or other incapacity is incapable of assenting,
    2. Any person, whether ascertained or not, who may become entitled, directly or indirectly, to an interest under the trusts as being at a future date or on the happening of a future event a person of a specified description or a member of a specified class of persons,
    3. Any person unborn, or
    4. Any person in respect of an interest of the person that may arise by reason of a discretionary power given to anyone on the failure or determination of an existing interest that has not failed or determined.

    The TSVA allows people to act on behalf of unborn babies, minors and incapacitated people. The courts allow any person to act on any of the above person’s behalf.

    Varying an Unreasonable Trust Account

    Let’s examine the example above. Assuming the daughter was a minor at the time, her guardian might recognize the bizarreness of the trust terms and request it be varied. One might propose to remove the restriction on spending the funds on overdue books. This way, the trust still honours its intentions (supporting her schooling) and becomes reasonably useful to the beneficiary. The guardian could request a provision that entitles the daughter to the remaining funds after she completes her education.

    In the end, the TSVA is designed to ensure trusts can fully benefit their respective beneficiaries. If you believe a loved one should have their trust inheritance modified to their benefit, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • 6 Tips for Estate Executors for Easy Administration

    6 Tips for Estate Executors for Easy Administration

    The job of an estate executor is not always a simple one and can be extremely strenuous when dealing with complex estates. The executor must ensure the beneficiaries receive the inheritance they’re entitled to. If executors make significant mistakes in administration, they may face personal liability. In this blog post, we hope to give executors some tips to help them avoid unnecessary complications and administer the estate more seamlessly.

    Tip 1: Ask for an Asset List

    If the will-writer is still alive, executors should ask them to prepare an asset list to help with estate administration. Accounting for all of the estate assets is one of the first tasks an executor is responsible to undertake. It’s usually quite obvious to the will-writer what assets they own and where they are, however, may not be obvious to the executor. A detailed list of assets can help ensure that administration of an estate gets off to a good start. By outlining what the assets are, what thee approximate value of those assets are and where they are is very helpful. If the executor lacks this information, they often scramble to account for everything that belongs in the estate of the will-writer.

    Tip 2: Keep Detailed Notes and Accounts

    A big part of the role of an executor is to provide a detailed account of everything that goes into and out of the estate while they are responsible for managing the estate’s assets. It’s best to prepare for this throughout the estate administration process rather than trying to recall all your past transactions at the very end. If any beneficiaries take issue with the detailed account, they can request a passing of accounts, where the executor will have to prove the accounting is legitimate to the courts. Maintaining detailed notes and recordings of all transactions made while acting as the estate administrator is always a best practice. By doing this, the executor can safeguard themselves from personal liability for potential missing estate assets.

    Tip 3: Open an Estate Bank Account

    Executors can open estate bank accounts in BC before the will has been granted probate.

    A temporary bank account for the sole purpose of managing the estate’s assets (an estate bank account) can be a critical tool for executors to keep track of the estate’s assets and to manage them appropriately. Further, an estate bank account keeps all the estate assets in the same place and prevents joint accounts from creating complications in the administration. Having an estate bank account also helps executors to keep organized and differentiate estate assets from personal assets. For more information, read our blog on estate bank accounts.

    Tip 4: Keep the Named Beneficiaries Updated on the Progress of Administration

    An executor is responsible to the beneficiaries of the will, and needs to be working to make sure they receive their inheritance properly and in a timely manner. Sometimes, an inheritance has life changing impacts and it’s not uncommon for beneficiaries to become impatient while awaiting their inheritance. This can be frustrating for executors as the beneficiaries start to hound them for updates and ask them to speed up the process, which is often beyond the control of the executor. In other cases, beneficiaries are skeptical of the executor and believe that they are not is mishandling the estate or failing to accurately account for all assets of the estate.

    To avoid confusion and frustration, it’s best to keep an open line of communication with beneficiaries, keeping them updated on a regular basis with what’s going on in the administration of the estate. When executors fail to communicate with beneficiaries, often find that beneficiaries become impatient and skeptical of the executor’s ability to administer the estate appropriately.

    Tip 5: Be Reasonable and Manage Time Responsibly

    Estate administration is by no means a race, and executors should take all the time they need to finish the job properly. However, executors should be mindful that they can’t unduly delay the process for legally invalid reasons. Beneficiaries are entitled to receive their inheritance in a reasonable amount of time and can force executors to take action when they fall victim to the lazy estate (a slow executor). Executors shouldn’t rush because no one will punish them for reasonable delays. Further, the executor’s year protects executors – they have a year to finish administering the estate before beneficiaries can start actions of the complain.

    Tip 6: Don’t Be Afraid to Ask For Help in Administration

    Just because a will names someone as the sole executor, it doesn’t mean that the executor has to handle everything alone. It’s not uncommon for beneficiaries and family members to lend a helping hand, so don’t be afraid to ask for help. Further, if you need professional assistance, estate lawyers and accountants can provide help with any complex issues that may arise, ensuring appropriate resolution. If you’re an estate executor and need help, contact an experienced estate lawyer today. We can help to ensure that the estate is administered properly and in a timely manner.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Maximizing Estate Value Using Trusts

    Maximizing Estate Value Using Trusts

    People often have a particular conception of what their will is going to include before they go to a lawyer to create one. Some people expect the estate planning process to be overwhelming, but most often people underestimate how complex their final estate plan will be. If you have paid off your mortgage, have no debts, and wish to pass your wealth to only your spouse and one child, you will have a simple estate plan, right? The reality for many people is that if they want the beneficiaries of their will to draw the maximum benefit from their estate when they die, extensive and detailed estate planning is necessary. In this blog we will consider how trusts can be one of the most powerful tools in an estate plan.

    What is a Trust?

    There are many different types of trust which we will detail later in this article, but first, what is a trust? What does it do? Unnecessarily complicated language in this area of law often convinces people that they don’t need trust instruments for their relatively simple estate plan. In reality, a trust (or multiple trusts) can be a simple tool that many people would benefit from employing in their estate plan.

    While many people probably have heard the term “trust fund”, you can think of a trust as a type of account which can hold anything, including funds, real estate, even personal valuables such as jewellery or wine collections. The possibilities of what you can hold on trust are essentially endless. The ability to protect any type of assets and ensure their exact distribution even after death makes trusts a valuable part of many people’s estate plans.

    Many people underestimate the importance of strategy in their estate plan. With careful planning, you can significantly increase the value your beneficiaries can draw from your estate.

    The Basics of Trusts in Estate Planning

    Let’s start with the basics. In estate law, the will writer who creates a trust is called the settlor. The settlor is the person who transfers the assets from their name into the trust. Then, they must appoint one or more trustees who are tasked with managing the trust and distributing its assets or profits to the beneficiaries according to the instructions of the settlor. The will writer decides the beneficiary of the trust. It can be nearly anyone they wish, they can even appoint organizations such as charities or schools. They can appoint one beneficiary, or several.

    They can even designate a class of people as beneficiaries. For example, a will writer can identify all graduates from their child’s school in 2022 as beneficiaries of a trust. More likely however, will writers will use a trust to distribute assets to their family or close friends, and name which individuals are to benefit from the trust.

    There are several different types of trusts which will writers can create, each having their own distinct benefits, and sometimes drawbacks, to the estate. Let’s look at the most common examples of trust instrument implementation in estate planning:

    Private Express Trusts

    This is the most common type of trust used in an estate plan. In an estate plan, will writers often use the trust to leave assets to their beneficiaries on certain conditions. For example, a will writer might put $50,000 in trust to benefit their granddaughter, stipulating that the money will be released incrementally to pay university tuition.

    Will writers also often use this type of trust to ensure their loved ones have a secure living situation in the future. Parents can specify that their home shouldn’t be sold until all of their children graduate high school. Further, they can dictate how to divide the proceeds if they sell the house. Drafters most often write these wills to become official only upon the will writer’s death. Will writers should be aware that if they die with considerable debts in their name, there is a possibility that their trust will fail.

    Inter-vivos Trusts

    The inter-vivos trust is a particularly useful tool for those with high-value estates. The will writer creates the inter-vivos trust while still alive, which means they transfer the asset out of their name before their death, unlike with some other trusts in an estate plan. This type of trust has many distinct benefits. These can include:

    • Increased control over the trust assets during the will writer’s life time
    • Protection from creditors should the will writer die with significant debts
    • Reduced estate taxes and probate fees, increasing the estate’s value for beneficiaries
    • Greater privacy between the will writer and future beneficiaries of their assets

    Further Benefits of Inter-Vivos Trusts in Estate Planning

    Another great benefit of an inter-vivos trust is that the will writer can still control and use the asset while they’re living. However, once they die, the trust becomes irrevocable. This is a good option for many will writers as any assets they have put into an inter-vivos trust, usually high-value assets such as a house, are not subject to recovery by any creditors of the will writer. If you die while in debt, the trust protects the assets from seizure, ensuring your beneficiaries will receive them. One thing will writers will have to mindful of is that when you transfer assets such as a house into this type of trust, you may be subject to fees such as the property transfer tax, as you are transferring the property out of your name.

    In this blog, we’ve barely scratched the surface of the various types of trusts and the unique benefits they can each offer to will writers in British Columbia. To be certain that you’re doing everything you can to protect your estate and pass you wealth effectively to your beneficiaries,  contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • When are Beneficiaries Entitled to Receive Interest? The Rule of Convenience

    When are Beneficiaries Entitled to Receive Interest? The Rule of Convenience

    Executors and beneficiaries are often aware of the executor’s year – a common law principle stating that an executor has a year from the testator’s death to finish administering the estate and distribute its assets. During the executor’s year, beneficiaries are usually not able to raise motions to speed up the process. In some cases, the estate administration takes longer than expected and beneficiaries inherit their share of the estate years after the testator’s death. Beneficiaries can sometimes use the Rule of Convenience to collect interest on their inheritance when delays occur.

    The Rule of Convenience

    The rule of convenience states that an inheritance which takes longer than the executor’s year to distribute could be subject to simple interest of 5% per year. However, if the will-writer acknowledges that their estate administration will likely take an extended period of time, they could include a provision stating that inheritances are not to be subject to interest if administration extends beyond the executor’s year. On the contrary, will-writers can specify that they wish to give interest to beneficiaries of their will in the event that the administration is lengthy.

    Interest Payments Because of a Will Challenge

    The executor’s year is not a legally binding principle and courts can allow motions to speed up the administration during the executor’s year when necessary.

    In the case of Rivard v. Morris (2018), the courts confirmed the use of the rule. A father left his two daughters with $530,000 each and the residue of the estate to his son (which was significantly larger than the $530,000). The daughters challenged the will, claiming that the son had unduly influenced the father during the will-writing process.

    After a lengthy dispute that lasted multiple years and ultimately failed, the daughters filed a claim for interest under the rule of convenience.  They wanted interest to be paid from the residue of the estate (the son’s share). The Court of Appeal allowed the daughters’ hearing and found them entitled to interest on their inheritance, even though the daughters’ claim caused the will challenge and related delays. The reasoning was that the challenge was non-frivolous and it would be unfair to not grant the interest payments. The judge emphasized the importance of certainty and predictability in the decision.

    What This Means for Executors

    For executors of wills, it’s important to be aware of the rule of convenience as it could have a financial impact on the estate. We encourage all executors to be proactive in their estate administration. In the majority of cases, it will not be difficult to finish the estate administration within the executor’s year. In some cases, like the one above, the executor is not at fault for the delay, but the rule of convenience still requires them to pay interest from the estate. If you’re an executor expecting an estate dispute, you should anticipate potential interest payments and plan accordingly.

    What This Means for Beneficiaries

    For beneficiaries of an estate that is taking longer than the executor’s year to administer, you should understand your rights as a beneficiary. If the executor’s year has passed, you could be eligible to start a claim citing the rule of convenience. Beneficiaries can initiate motions to expedite the estate administration process if there are undue delays. If executors prove to be incompetent and unable to administer the estate, the Courts can remove them. Just because you’re a beneficiary with minimal authority in the estate administration doesn’t mean you don’t have legal remedies available if you’ve been wronged. For more on this, read our article on forcing an executor to act.

    If you’re a beneficiary of a will that has been in the administration process beyond the executor’s year, contact an experienced estate lawyer today. We can help you to speed up the administration process and have you receive inheritance interests when necessary.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Choosing an Executor: Should You Appoint a Professional?

    Choosing an Executor: Should You Appoint a Professional?

    An important part of the will-writing process is choosing someone to be the executor– the person who is responsible for administering the estate and distributing the estate’s assets. There can be a number of different factors that go into the process of choosing an executor. The job of an executor is typically not a simple one – it can involve a handful of different tasks as they prepare the estate for distribution to the beneficiaries named in the will. In some cases, it’s in the best interests of the will-writer and their family to appoint a professional to be the estate executor.

    Will-writers who want a truly neutral party to act as their executor can appoint a lawyer, accountant, or corporate trustee. While this will cost more than naming a close friend or family member, it ensures professional administration of the estate. There can be many different reasons why will-writers think it is necessary to appoint a professional estate executor.

    Complex Estate

    Executors are ultimately responsible with managing all aspects of the estate administration. Executors are responsible for accounting for all of the estate assets, paying any unpaid debts the testator owes, managing estate assets for distribution, and locating all the beneficiaries of the will. The executor’s job can become very complicated if the estate has assets scattered around the world, beneficiaries living in other jurisdictions, or a number of debts to pay. The pressure can also become overwhelming, as executors can face personal liability for mistakes that harm beneficiaries.

    If at all, many people only serve as an estate executor once or twice in their life, which means they have minimal experience. By hiring a professional, you can be certain they know exactly what they’re doing. As the will-writer, you can be assured that the administration will go smoothly and none of your loved ones will be burdened by this duty. Further, a professional executor can help to defuse family conflicts that might arise as a result of the administration.

    Family Politics

    Estate executors can decline taking on the role before they begin estate administration.

    Often when family estate disputes happen it is due to the actions of the executor or the will-writer. As a will-writer, you can foresee and mitigate family conflict with proper estate planning. If a third-party professional administers your estate, you can mitigate family issues that arise from the estate. You can presume that the professional will act objectively, doing what is right for the beneficiaries and the estate. The professional will have nothing to gain by acting in the favour of certain family members.

    Nobody Suitable

    Often, people appoint a professional executor simply because they do not have any other suitable person to appoint. While people typically choose close family to be their executor, sometimes this isn’t an option. Maybe there is no one who you can trust to act objectively, there is no one physically or mentally able to handle the role, or you’re simply afraid nobody will carry out the terms of your estate exactly as you wish. Generally speaking, you will never want to appoint an executor who lives in a different country from where the majority of your estate assets are. The executor will need to be physically present for many of the executor’s duties.

    Can’t Decide? Name Multiple Executors

    Often, will-writers wish for their executors to have the objectivity and experience of a professional, but also personal knowledge and relationships of their family. Even though there isn’t usually one person who exhibits all of these traits, will-writers are able to name multiple executors in their will (co-executors). This can be a good idea in some cases as it eases the workload of the executor, however, co-executors must agree to all decisions made on behalf of the estate. It is common for parents to name all of their children as co-executors for their estate in the interest of fairness. In naming a professional and a family member as co-executors, the family member can handle most of the estate affairs with the professional assisting when needed and ensuring that the estate administration is done properly and efficiently.

    If you think that a professional executor is unnecessary in your scenario, it’s still important to appoint the right person to be your executor. Different family members might be better suited for the job based on their physical location, personality and/or willingness to do the job. For more information, read our blog on choosing the right executor for your estate administration.

    Ultimately, it’s up to the will-writer to choose who their executor should be. If you’re unsure if you should appoint a professional to be your executor, contact an experienced estate lawyer today. We can help you to pick someone who will properly administer your estate.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • When does the Government Inherit an Estate (the estate escheats)?

    When does the Government Inherit an Estate (the estate escheats)?

    It is a surprisingly common misconception that if you don’t write a will, the government will inherit your estate. The government rarely inherits an estate, and this only happens when there are absolutely no available beneficiaries or relatives of the testator. In such cases, the estate escheats. Further, when individual assets from an estate fall into intestacy (no valid beneficiary appointed, or no valid will exists), the government still has the lowest priority to receive the intestate assets. Any relatives of the deceased will be entitled to receive the estate before it escheats.

    Dying Without a Will or Intestate

    If someone dies without leaving a valid will, their assets typically go solely to their spouse and children. When the testator has no spouse or children, their parents, brothers, sisters, or other relatives inherit the estate. In general, the closer the relationship of a beneficiary to the testator, the higher priority they will have to inherit the estate. For more information, read our blog on dying intestate and how assets are distributed.

    If no relatives can be located, the government receives the estate assets. If this is the case, the estate escheats.

    When the Estate Escheats

    The best way to prevent your estate from escheating is by writing a valid will as soon as possible.

    The Escheat Act specifies exactly what happens when an asset escheats and who is responsible for handling the escheated assets. Basically, when the intestate succession finds that there are no lawful heirs to the estate, the assets escheat and become property of the government. For real property such as real estate, the government will seize ownership and in most cases, sell the property.

    Personal belongings will usually be disposed of as they have minimal value and aren’t typically worth taking time to sell. As described in s.8 of the Escheat Act, the Attorney General may act in their own discretion to “make any assignment of personal property to which the government is entitled because of

    1. The person last entitled to it having died intestate and without leaving any kin or other person entitled to succeed to it,
    2. The property having become vested in the government as a thing that had no owner, or
    3. The property having become forfeited to the government, or

    Make an assignment of any portion of the personal property, for the purpose of

    1. Transferring or restoring it to any person or persons having a legal or moral claim on the person to whom it had belonged,
    2. Carrying into effect any disposition of it which the person may have contemplated, or
    3. Rewarding the person making discovery of the right of the government to the property.”

    Another factor to note is that the government will never seek out the estate executor, asking for the escheated assets from the estate. The only time the government becomes aware of an escheated estate is when the executor notifies them.

    Relative Found After Assets Have Escheated

    Before declaring that the estate escheats, an estate executor must search for any relative or heir who could legally inherit the deceased’s estate. After a diligent search and a sufficient effort to locate an heir, the executor can notify the government and escheat the estate. In some cases, a relative of the deceased surfaces and comes looking for their inheritance, after it has already escheated. At this point, it’s not the executor’s responsibility and the relative must deal with the government. The person can apply to the Attorney General to have the assets distributed to them and will usually be successful if they’re a lawful heir of the deceased. There is no limitation period in this scenario.

    You usually don’t need to worry about your estate or a loved one’s estate escheating. This will only happen if (a) the person died without leaving a valid will, and (b) there are absolutely no relatives to the deceased entitled to inherit the estate.

    If you’re worried about an estate escheating, the best way to prevent this is by writing a valid will. If you need assistance writing your estate plan, contact an experienced estate lawyer today. We will ensure your estate is handled exactly as your expecting and distributed to those that you wish.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Removal of a Badly Behaving Executor in BC

    Removal of a Badly Behaving Executor in BC

    As a beneficiary of a will, it can be frustrating to sit helplessly waiting while the will’s executor fails to administer the estate as expected. Unfortunately, executors sometimes cause intentional delays, are incompetent in their administration, or even abuse their powers to commit theft of estate assets. When this happens, the suffering falls on the beneficiaries – the value of estate assets changes over time, accumulated maintenance costs deplete the estate’s value, and the distribution of assets doesn’t always happen in a fair and timely manner. In these situations, beneficiaries may be able to seek removal and replacement of the executor.

    Legal Grounds for Executor Removal

    According to the judgement in Nieweler Estate (Re) (2019), there are four categories of conduct that will warrant a removal of an executor:

    1. Endangerment of the trust property (estate);
    2. Dishonesty;
    3. Incapacity to execute the duties; and
    4. Lack of reasonable fidelity (good faith).

    The case of Radford v. Wilkins (2008) exemplifies the process through which the courts will change an executor. The factors that are considered when determining whether or not to remove an executor are:

    • The testator’s choice of executor is not to be lightly interfered with,
    • Clear necessity for removal in the interest of the estate’s administration must be established,
    • Removal must be the only reasonable course to follow,
    • Removal to be guided in the interest of the welfare of beneficiaries,
    • Non-removal must likely prevent proper execution of trust, and;
    • Removal cannot be not intended to punish past misconduct.

    Reasons for Executor Removal

    The courts will always hesitate to remove an executor because the testator specifically appointed them as part of their last wishes. However, when it is necessary to remove an executor to protect the beneficiaries’ welfare, the courts will issue an order. The courts view executor removal as a last resort option. Any interested party (someone with a legal stake in the estate) can make an application to remove the executor if they fail to fulfill their duties. Among other reasons, some of the most common grounds for executor removal include undue delay, refusal to act, and fraudulent behaviour.

    Common Grounds for Removal

    If the executor cannot reasonably explain the delays, the Courts can remove them from their position.

    When an executor is actively working to fulfill their duties but experiences an unreasonably explainable delay. Refusal to act by an executor is when they are completely refusing to advance the administration of the estate. An executor’s refusal to act is commonly purposeful and rarely justifiable, especially since executors can renounce their responsibilities at any time.

    If an executor behaves fraudulently in relation to the administration of the estate assets, it will also result in their removal. Executors also must release a full account of everything that went into and out of the estate to its beneficiaries. If the beneficiaries don’t agree with the accounts, believing that there may have been fraudulent activity or a miscalculation of estate assets involved in the accounting, they can have the account reviewed by the courts in a passing of accounts.

    An Example from Caselaw

    In the case of the Kajaks Estate (2016), the executor had failed to administer and distribute the estate after 9 years following the testator’s death. The executor was constantly delaying the process in an attempt to coerce the beneficiaries to agree to change the will to benefit the executor more substantially. It was evident to the court that not having received their portions of the estate for 9 years was impacting the welfare of the beneficiaries. Further, the executor demonstrated a lack of reasonable fidelity as there was no reasonable explanation for these delays. The courts granted an executor removal on these grounds so the estate administration process could move forward.

    When The Courts Won’t Grant Executor Removal

    The Canadian common law principle of the executor’s year is a general guideline for executors, advising that the administration process should be complete within a year from the testator’s death. During this year, we expect interested parties not to interfere because the administration process might take a long time, depending on the complexity of the estate plan. During the executor’s year, the courts probably won’t recognize any claims against the executor. However, after the first year, people can raise claims for removal due to undue delay. The executor’s year essentially gives the executor a grace period, but it’s not legally enforceable

    Ways Forward for Beneficiaries

    Conflicts of interest regarding executorship are generally not sufficient grounds for executor removal. In fact, it’s very common for the executor to be a beneficiary of the estate themselves. Beneficiaries expect the executor to act objectively, ensuring their personal interest in the estate doesn’t impact the estate administration process. Any arguments or tension which may arise between executors and beneficiaries are also not grounds to remove an executor. By law, the executor does not need to be friendly with the beneficiaries; they simply have to administer the estate in a timely manner, with the best interests of the beneficiaries at mind.

    It is often easier and faster to avoid executor removal during the estate administration process, however, removal is sometimes the only option in cases where the executor refuses to take action or causes undue delay. If you’re a beneficiary who is suffering at the hands of an executor, contact an experienced estate lawyer today to begin solving the problem sooner rather than later.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.