League and Williams Lawyers

Tag: wills

Dying without a Will (Intestate): Who Acts as Executor?
If someone dies intestate (without leaving a valid will), the courts determine the estate’s distribution and the executor of the estate. In a past blog post, we discussed how an estate is distributed when someone dies intestate. In this post, we’ll identify who can be appointed executor of an estate when someone dies without leaving a valid will.

The job of an executor can be time-consuming and stressful, but it is highly important. The executor is crucial to the correct administration of an estate. Some of the responsibilities of an executor include planning funeral arrangements, locating all of the testator’s assets, liquidating assets for distribution, filing tax returns, paying any debts owed, and distributing the estate. When the deceased does not leave a valid will, the complexity of these tasks can increase as the executor does not have specific directions to follow. In appointing an executor, the courts must be sure that the person will take the job seriously and handle the estate as the testator intended.

Executor Priority List

When no one applies to administrate an intestate estate, the Public Guardian and Trustee can take on the duty.

For the courts to appoint someone as executor of an intestate estate, interested parties must apply. The person with the highest priority on the list described in the Wills, Estates and Succession Act (WESA) will become the executor.

Section 130 WESA

As described in section 130 of WESA, the courts will use the following order of priority:
1. The spouse of the deceased person or a person nominated by the spouse;
2. A child of the deceased person having the consent of a majority of the children of the deceased person;
3. A person nominated by a child of the deceased person if they person have majority consent of the deceased’s children;
4. A child of the deceased person not having the consent of a majority of the deceased person’s children;
5. A successor other than the spouse or child of the deceased person, having the consent of a majority of the other successors including the successor who applies for a grant of administration;
  - A person, other than the spouse or child of the deceased person, nominated by a successor of the deceased if that person has the consent of a majority of the other successors, including the successor who nominated the person to apply for a grant of administration;
6. An intestate successor other than the spouse or child of the deceased person, not having the consent of a majority of the other successors, including the successor who applies for a grant of administration;
7. Any other person the court considers appropriate to appoint, subject to the Public Guardian and Trustee’s consent.
Executor Priority in Practice

In simple terms, the order of priority goes: the spouse, a person nominated by the spouse, a child with majority consent, a person nominated by the children, a child without majority consent, a successor of the intestate estate and lastly, any other interested party. ‘Interested parties’ can include registered professionals such as lawyers and accountants in these circumstances.

For example, if a person dies intestate without a spouse, but with three children (two daughters and one son).

While the executor order of priority is clear if one dies intestate, it’s always best to write a valid will naming exactly who you want to be named executor of your will. If you need help drafting your will, 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.
June 7, 2023
How are Company Shares Handled in BC Estate Law?
Upon an individual’s death, estate administration commences, and the executor undertakes the task of distributing assets to beneficiaries as per the deceased’s will. When the deceased has an interest in a private corporation, handling shares differs from managing simpler assets such as personal items or cash reserves. In this blog, we’ll discuss private company shares during estate administration and offer tips for estate planners with interests in privately held companies.

Company Law and Estate Law

Business owners or company share holders must carefully consider both company and estate law when creating a succession plan. This not only ensures efficient estate administration and asset distribution but also maintains the company’s health and continuity. Will writers should first comprehend the corporate structure of their involved company to avoid surprises during planning or post-death administration. Many people may be unaware that upon registration, corporations become separate legal entities with distinct rights from their owners. Corporations can be public, with stocks traded publicly, or private, owned by a limited shareholder group and not publicly traded.

Understanding Your Company Shares Before Writing Your Will

Will writers must fully understand their rights and liabilities concerning the company they hold an interest in to prevent confusion or litigation after their death. They should also know that after drafting and executing a will, it’s possible to create a new one or draft a supplementary document called a codicil for minor additions or changes. For more on this, read our article on writing a new will here, or on codicils here.

The type of business interest held by the deceased is fundamental to the estate administration. If the deceased was the sole shareholder and director of a company, the executor must consider the following elements in the estate administration:
- How will they safeguard the company and its assets while they are in possession of them during the administration process?
- Do the articles of association (internal governing rules) of the company include any duties that the executor must adhere to during the probate and administration process?
- How has the deceased elected to pass their shares down in the estate plan?
Particularly for those who are sole-owners or hold shares in a private company, careful planning of their will is paramount. Further, it is important that will writers ensure the corporate organization and operation of their company follows all provincial and federal regulations to prevent litigation or other difficulties when passing down shares.

Depending on its corporate governance and structure, shareholders of a company are subject to different rules and conditions when selling or transferring their shares.

Where the Deceased is One of Many Shareholders

If the deceased was one of many shareholders, the shares may be subject to special rules which govern the company. These rules are often found in a company’s articles of association, shareholders’ agreements, or other relevant contracts. It’s crucial for will writers to understand the rules governing share transfer and ensure their estate lawyer has the necessary information. This helps create an estate plan in line with their shareholder rights and responsibilities. Some examples of things included in a company’s articles or shareholders agreements that will writers and executors should be aware of are:

Rights of first refusal: The company’s shareholders’ agreement or articles of association may contain a right of first refusal, which means that the company or the remaining shareholders have the right to buy the deceased’s executor can distribute them to the beneficiaries of their estate.

Restrictions on transfer: The company’s articles may impose share transfer restrictions, impacting or placing conditions on the executor’s ability to manage and transfer shares.

Capital Dividend Account: If the company has a capital dividend account, the personal representative must consider the tax implications of distributing the account to the beneficiaries.

Navigating Share Transfer Complexities and Tax Implications in Estate Planning

Provisions like rights of first refusal and transfer restrictions can complicate share transfers, possibly undermining the testator’s intentions. Tax implications related to certain assets, like capital dividend accounts, must be considered to avoid unintended financial burdens for beneficiaries. Addressing these concerns helps ensure estate management and distribution align with the individual’s wishes, safeguarding their legacy and providing financial security for loved ones. The complex nature of estate administration and private company share distribution requires careful planning and attention to detail. Will writers need a thorough understanding of the corporate structure, shareholder rights and responsibilities, and governing rules affecting share transfers. By considering these factors, will writers can create an estate plan ensuring efficient asset distribution while preserving the company’s continuity and stability.

Navigating estate planning and private company share distribution complexities often requires an experienced lawyer’s assistance. Legal professionals have the expertise to guide you, identify obstacles, and develop goal-aligned strategies for your estate and company. They can ensure a solid estate plan, minimizing confusion or litigation risks, and providing peace of mind for you and loved ones. If you’re a shareholder of a private company, contact us for a consultation and take the first step toward safeguarding your legacy.
March 15, 2023
Stepchildren Challenging a Will: Estoppel if Your Biological Parent Gifts Their Estate to Your Stepparent
In BC, courts can rule a will unfair and have it revised – or varied – if it does not make ‘adequate provision for the proper maintenance and support’ of the will-maker’s spouse or children. The Courts have the authority to prevent the disinheritance of spouses and children of will writers without sufficient cause. But, what about stepchildren? According to the Wills, Estates and Succession Act (WESA), a child is ‘a natural birth child or a legally adopted child’. Unless the stepparent has adopted a stepchild, WESA does not recognize them as a child.

It’s clear that a stepchild cannot apply to vary their stepparent’s will under WESA. However, there are other ways that stepchildren can challenge a will. These scenarios can arise if:
- Promises are broken under mutual wills;
- Assets in joint tenancy are held in resulting trust; or,
- There is estoppel for an estate being gifted to a stepparent.
Estoppel for Your Biological Parent Gifting Their Estate to Your Stepparent

If a stepparent unfairly disinherits them, stepchildren lack the legal standing to directly request a variation of the will

Estoppel is a legal argument used to prevent a party from breaking a promise to benefit themselves. In the context of stepchildren challenging a will, estoppel can stop a stepparent from receiving more of an estate than their spouse intended. A parent might agree to gift the entirety of their estate to a spouse because the spouse promised to include their stepchild in their own will. If the spouse later changes their will to contradict their promise, the party impacted by the broken promise may be able to make an estoppel claim against the stepparent’s estate.

In order to have a successful claim for proprietary estoppel, the following must be present:
- A promise is made,
- That promise is reasonably relied on,
- That promise is unfairly broken; and,
- This causes detriment.
An Example of Proprietary Estoppel

Let’s examine a scenario that illustrates how a proprietary estoppel claim may arise. Chris is a man who has a daughter named Deb. He marries Jane, who becomes Deb’s stepmother. Chris plans to leave his estate to Jane if she outlives him, and then wants the property to pass to Deb once Jane and Chris have passed away. Chris gifts the whole estate to Jane because she has promised to include Deb in her own will. This should ensure that Deb will inherit indirectly from Chris’s estate. Deb trusts this pledge and relies on it reasonably. She chooses not to dispute the gift, because she doesn’t expect to be disinherited. Following Chris’s death, Jane breaks her promise, changing her will to pass the entire estate to her own child. Deb can no longer dispute the gift from her father’s estate, since 180 days have elapsed since his passing.

However, Deb may have a valid claim to receive the assets that were passed from Chris’s estate to Jane. If she can demonstrate the presence of the components of a proprietary estoppel claim in her circumstances, the Courts may vary Chris’s will.

Children and adults who have relied on a promise from their stepparent concerning their natural parent’s estate and suffered resulting loss should speak to an experienced estate lawyer as soon as possible. An experienced estate lawyer can support you in making a claim to vary a will.

Have a question about estate disputes 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.
February 23, 2023
Posthumous Births: Are Children Born after Their Parent’s Death Entitled to the Estate?
Sadly, children are sometimes born after one of their parents passes away – a posthumous birth or after-born child. In other cases, babies can be conceived well after one of their parents has passed away because of current and advancing reproductive technology. In such cases, is the after-born child entitled to receive any of their deceased parent’s intestate estate like a child who was born before one of their parent’s deaths would be? The answer can be yes and no; however, it is common for an after-born child to be entitled to the estate.

When a Posthumous Child is Entitled

An important distinction made in the Wills, Estates and Succession Act (WESA) is whether the child was conceived before or after the parent’s death. As described in s.8 of the WESA,

“Descendants and relatives of an intestate, conceived before the intestate’s death but born after the intestate’s death and living for at least 5 days, inherit as if they had been born in the lifetime of the intestate and had survived the intestate.”

As per this provision, it’s clear that posthumous children conceived before their parent’s death are entitled to an inheritance. On the other hand, when the child is conceived after their parent’s death, there are specific conditions that must be met in order for the child to be entitled to the estate. In summary, the conditions are:
1. The surviving parent who was in a marriage-like relationship with the deceased parent has written permission allowing the use of their reproductive material, written within 180 days of being used;
2. The child is born within 2 years after the parent’s death and lives for 5 days or longer; and,
3. The deceased parent is the child’s parent as described in the Family Law Act.
In BC, posthumous children conceived before their parent’s death are always entitled to an inheritance.

When all of these conditions are met, the child is entitled to receive an inheritance from the deceased parent exactly like a child born before their parent’s death would be. If, for example, the posthumous child was born 4 years after the parent’s death, the child would not receive any of the estate if the parent died without a valid will. They would only be entitled to their surviving parent’s estate, once they have passed.

What Does This Mean for Posthumous Children?

If a posthumous child is entitled to inherit from the intestate estate, they will receive an inheritance as described by the guidelines on intestacy in WESA. For more information, read our blog post on how the WESA will distribute an intestate estate. In most cases, posthumous children can expect to split the estate with their surviving parent (with the parent receiving an additional $300,000 before the estate is split).

Minors in BC cannot receive an inheritance until they are 19 years of age or older. This means that the posthumous child would have their inheritance kept in a trust, or held by a trusted adult until they reach the age of 19. Once the posthumous child is no longer a minor, they will receive the entirety of the their inheritance.

When the deceased parent has not died intestate, the provisions for the child made in their will are to be followed. The distinction between posthumous or not, and if the child was conceived before or after death are irrelevant. When the parent has not died intestate, posthumous children do not need to worry about the courts overruling the will’s requests to follow intestacy directions.

If your child is an after-born child and you’re unsure if they are entitled to the deceased parent’s estate, contact an experienced estate lawyer today. We will ensure that your after-born child receives the inheritance that they are entitled to.

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.
February 7, 2023
Solicitor’s Negligence: Suing the Will-Drafting Lawyer
Sometimes, due to the drafting lawyer’s negligence, a will may not reflect the testator’s requests, unbeknownst to them. Perhaps the lawyer failed to carefully review the directions given to them by the testator, or improperly applied the law, making an error which causes the will to be invalid. In either case, the beneficiaries of the will often discover these mistakes themselves and must find a remedy. Usually, these types of errors cause the beneficiaries of the will to sufferEven though the beneficiaries are not directly clients of the will-drafting lawyer, do they have a valid legal claim? The answer is commonly yes; beneficiaries can sue solicitors for negligence, depending on the facts of the case.

A Lawyer’s Standard of Care

The Law Society of BC regulates the legal profession to protect the general public of BC

As described in the case of the Central Trust Co. v. Rafuse (1986), “a solicitor is required to bring reasonable care, skill and knowledge to the performance of the professional service which he has undertaken.” When negligence claims arise, the question that the courts must ask is whether a reasonably competent lawyer in the same situation would have made the same mistake or not. It is not a question of the drafting lawyer being perfect in their conduct, rather just that they were acting reasonably.

The Law Society of British Columbia enforces a high standard of care for all BC lawyers handling client cases. They provide a checklist outlining tasks that will-drafting lawyers must adhere to. Some of the common errors made by will-drafting lawyers which can result in a negligence lawsuit are:
- Not writing detailed notes on the client,
- Not using proper witnesses for the will,
- Not interviewing the client thoroughly enough,
- Not suspecting undue influence,
- Missing limitation dates on taking certain actions, or
- Forgetting to include a certain provision that the client requested.
Any one of these mistakes could alter the main principles or function of a will. When mistakes occur, beneficiaries can face significant financial loss.

Beneficiaries Suing the Lawyer

Until recently, the courts took the position that lawyers only owed a standard of care to their clients (in this case, the testator). Lawyers did not owe a standard of care to the beneficiaries of the will. Most of the time, the client of a negligent lawyer has no recourse as they have passed away before the negligence was discovered. This made the standard impractical. Now, a beneficiary is able to take legal action against the will-drafting lawyer – solicitors owe a duty of care to the third parties affected, including beneficiaries of a will.

The case of Whittingham v. Crease & Company (1978) examines a scenario where a will-drafting lawyer is held accountable for their negligence. In this case, the solicitor did not follow the proper procedures for witnessing a will in British Columbia. The witnesses were unsuitable as they had an interest in the will. One of the witnesses was married to a beneficiary. The will was ruled invalid due to this error and the testator died intestate (without a valid will).

Due to intestate succession laws, the plaintiff (a beneficiary) received less of the estate than he would have if the will had been valid. Believing he had suffered a loss because of the lawyer’s incompetence, the beneficiary sued the lawyer for negligence.

The Court’s Decision

The solicitor should have understood their responsibility to provide accurate information, because the client sought them out for professional advice. The courts ruled that the solicitor in this case committed the following acts of negligence:
1. Failing to take care to ensure that in the matter of the witnessing of the said will the provisions of s. 12(1) of the Wills Act were not contravened;
2. Failing to take any reasonable steps at all to remedy the said failure;
3. Requesting the wife of the plaintiff to act as a witness to the execution of the said will;
4. Misstating to the plaintiff that it was safe for his wife to act as a witness to the execution of the said will.
Due to the acts of negligence, the court ordered the lawyer to compensate for the damages suffered by the beneficiary. Though this is an older case, it demonstrates how a clear act of incompetence by a will-drafting lawyer will hold the lawyer accountable if a beneficiary suffers as a result.

Contact an experienced estate lawyer today if a solicitor’s mistake has wronged you as a beneficiary. We can support you in holding the will-drafting lawyer accountable for their negligent acts.

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.
February 2, 2023
An Executor’s Job: What an Executor of a Will Should Expect

Before naming someone as executor in a will, the will-writer usually asks the person if they’re comfortable with the responsibility. Often, without fully understanding the legal duties and obligations associated with being an executor, the person accepts. However, executors often make the mistake of accepting executorship just to please the testator. The size and structure of an estate may task executors with a long and complicated estate administration process. Therefore, executors need to understand what they’re agreeing to and ensure they can handle all the expected tasks.

Duties, Tasks and Responsibilities

An executor’s duties cover all aspects of estate administration. They are responsible from the testator’s death until the distribution of all assets from the estate to its beneficiaries. Planning the testator’s funeral is often one of the first tasks an executor faces.

Generally, the executor must have the original copy of the will – there are scenarios which may arise where the original copy is not required and a copy of the original is fine. The executor must present the will to the probate courts for validation and execution. This is only necessary if the will requires probate, which is most often the case.

Next, the executor can begin to administer the estate, preparing it for distribution to the beneficiaries. The testator must repay any debts owed even after their death. The executor, using the estate’s funds, is responsible for paying these debts, including taxes, on behalf of the estate. Executors are responsible for ensuring that they have not left any of the testator’s debts unpaid. This can even include putting adverts in the newspaper to notify any potential debtors of the testator’s death.

Passing of Accounts

It’s crucial that the executor is careful to account for all transactions involved with the estate, tracking anything that goes into and out of the estate. When the estate is ready for distribution to the beneficiaries, the executor must detail all the transactions made on behalf of the estate in an account. The accuracy and detail of these records is crucial in the instance that a beneficiary of the estate raises a claim for passing of accounts. To help make this process easier for executors, it’s recommended to open an estate bank account to keep all the estate’s funds in one place.

Even if not specified in the will, an executor can receive compensation for their work.

After all the debts and assets of the estate have been accounted for, the executor can then distribute the estate assets according to the will.

In most cases, there can be excess assets of minimal value left behind with no one named in the will to receive them. The executor is responsible for disposing of these assets themselves. Once the estate has no remaining assets, the executor has finished their job.

Remember, this list of executor duties isn’t exhaustive – each estate administration process is unique and requires attention to various debts and assets. This list covers the most common and important duties that an executor will likely be responsible for.

Risks of Personal Liability

Anything that the testator did or failed to do while they were alive which resulted in damages will not make executors personally liable. An executor becomes personally liable only if they do something themselves that warrants liability. For example, if the executor fails to give adequate notice of the testator’s death to the debtors of the estate and then distributes the estate, they can become personally liable.

In this case, the beneficiaries of the estate would not be held responsible for repaying such debts after they’ve received their portion of the estate, as they cannot be held liable for the executor’s negligent administration. The court could order the executor to repay these debts from their own pocket, which is why keeping an accurate and detailed account of the estate’s assets and debts is essential for executors. The executor can also become personally liable if they abuse their power and engage in fraudulent behaviour.

Is It Worth It?

Everyone knows that an executor bears numerous responsibilities and must devote a significant amount of time and energy to ensure the proper administration of an estate. Executors can feel pressured by time as they usually have one year from the testator’s death to finish the administration and distribute the assets to the beneficiaries – known as the executor’s year. While there’s no strict deadline, beneficiaries can start urging the executor with court orders to speed up the process if the administration extends beyond the executor’s year and causes undue delay.

When deciding whether to accept executorship, understand that the law allows executors to receive compensation for their efforts through executor’s fees. The Trustee Act entitles an executor to a maximum of 5 percent of the gross aggregate value of the estate, unless the will specifies otherwise. In most cases, 5 percent is a high figure for the executor’s compensation, and fees are more commonly between 2 percent and 3 percent of the estate’s value.

Other Details to Consider

When contemplating accepting executorship, it is also important to consider the proximity with which you live to the location of the estate’s assets. It can be quite difficult to administer an estate when you are living in another province or country. An executor usually cannot complete their tasks during a week-long trip to the location of the assets. They will need to stay in the same city where the majority of the assets are for an extended period.

Taking on the role of executor for a will can be a significant burden. However, if you do it correctly, you will receive rewards for your efforts. The will always names an executor for the estate. If you decline the position, the courts will assign someone else. However, this could lead to the appointment of an incapable executor, which could cause extensive and potentially expensive delays in the administration process.

If you are an executor and are unsure how to begin the estate administration process, contact an experienced estate lawyer today. We can help guide you through the tasks of being an executor, and can help ensure that you are not held personally liable for any issues related to the administration of the 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.

January 30, 2023
Probate vs. Letter of Administration: What’s the Difference?

When someone dies, it often leaves their loved ones wondering about how they should start administering the estate. If the deceased leaves a will, the courts need to verify its validity. If the deceased didn’t write a will, the courts take on the responsibility of deciding a fair distribution of the estate and appointing an estate administrator. Ultimately, it can become confusing and stressful for those involved with handling a loved one’s estate. In this blog we’ll clarify the difference between processes of probate and letters of administration.

Probate

Probating a will ensures its authenticity, confirms it was left by the deceased, and validates the executor’s authority to manage the deceased person’s estate. The executor must apply to the court for a grant of probate, which can make probate a lengthy process. The court gives the grant of probate to the executor once they prove their legal authority over the estate. Probating a will aims to prevent the improper handling of large assets after the owner’s death.

If the will-writer doesn’t own land, a large bank account, or a large investment account, their estate assets don’t meet the minimum value required for a grant of probate.As a general rule of thumb in British Columbia, if the total value of the estate named in a will is less than $25,000, the will won’t need to go through probate; however, there can be exceptions to this rule. The most common of which being instances where there are joint tenancy agreements over the assets in question.

If the testator is in a joint tenancy agreement with someone, such as their spouse, the spouse will have full ownership of the asset upon the testator’s passing. This is also the case for any assets that have a designated beneficiary assigned to them; the beneficiary will gain authority of the asset upon the testator’s death. If the value of the estate is above $25,000, excluding any joint tenancy assets and assets with designated beneficiaries, the will must be granted probate.

Letter of Administration

When someone dies intestate, the letter of administration names an administrator, not an executor.

If a person dies without leaving a valid will, the courts decide the distribution of the person’s estate. Since there is no will in such cases, it does not make sense to apply for probate as there is no valid will to test. Interested parties can apply for a letter of administration to receive executor-like duties as the estate administrator. In our estate blog on dying intestate – who becomes the executor (or administrator), we discussed the order of priority for multiple applicants.

In some cases, a person leaves a valid will; however, it does not account for all of their assets. When this happens, the Court grants probate to the will and must also award a letter of administration to properly distribute the assets not named in the will. As an example, an elderly man names all of his assets in his will except for his savings account with $100,000 in it. Someone must obtain a letter of administration to distribute the savings account, and to distribute the remaining assets, the valid will needs a grant of probate.

Probate Fees

Whether the court grants probate or a letter of administration to the estate, it must pay approximately 1.4% of the total estate’s value plus a $200 court filing fee. However, if the value of the estate assets is under $25,000, these fees will be waived.

In general, probating a will and receiving a letter of administration are similar processes, but have different purposes and applications in different circumstances. When an individual dies fully or partially intestate, the distribution of assets requires obtaining a letter of administration. In the case of a properly validated will, the executor typically needs to secure a grant of probate, eliminating the need for anyone to receive a letter of administration.

If you’re unsure whether you need to receive a grant of probate or a letter of administration, contact an experienced estate lawyer today. We can help guide you through the probate process or through the process of receiving a letter of administration.

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.

January 25, 2023
Stepchildren Challenging a Will: Assets in Joint Tenancy Held in Resulting Trust
In BC, courts can rule a will unfair and have it revised – or varied – if it doesn’t make ‘adequate provision for the proper maintenance and support’ of the will-maker’s spouse or children. This ensures that spouses and children aren’t disinherited without sufficient cause. But, what about stepchildren? According to the Wills, Estates and Succession Act (WESA), a child is a natural birth child or an adopted child. A stepchild is not a child under WESA, unless they have been adopted by their stepparent.

It’s clear that stepchildren can’t vary a stepparent’s will under WESA. However, there are ways that stepchildren can challenge a will. These scenarios can arise if:
- Promises are broken under mutual wills;
- Assets in joint tenancy are held in a resulting trust; or,
- There is estoppel for an estate being gifted to a stepparent.
Assets in Joint Tenancy Held in Resulting Trust

Stepchildren cannot directly vary a stepparent’s will if they’re unfairly disinherited.

Houses are usually the largest asset in a person’s estate. Homeowners want to be sure that their homes are distributed as intended when they pass away. Joint tenancy is typically used by couples to ensure that the surviving spouse will receive the home, without having to go through probate (the process that ensures a will is real). Joint tenancy agreements can also help to maintain continuity in the life of the surviving spouse following the death of their partner.

Agreements with rights of survivorship can allow the surviving partner full rights to the property and accounts belonging to their partner – as specified in their agreement- following their death. In joint tenancy agreements, disputes can ensue over whether the property contributed by one partner to the joint tenancy was a gift, or if the property was to be held in a resulting trust following their death. In BC, there is a presumption of resulting trust – the presumption that a transfer of property is not a gift.

If a property is held in resulting trust by someone, it does not necessarily mean that they own the property. Rather, that they hold the legal title of the property for the benefit of the owner. On the other hand, if the property was given as a gift, they do own the property. Unfortunately, surviving spouses sometimes try to “steal” their spouse’s estate by claiming that it was given as a gift rather than to be held in resulting trust.

Consider This Example

Let’s look at how this might apply to a stepchild who has been unfairly disinherited. As an example a man, Alex, has a son, Ben. Alex is married to a woman, Emily, who is Ben’s stepmother. Before Alex dies, he transfers joint tenancy to Emily, intending for her to hold his estate in resulting trust so he can provide for her if she survives him. Upon Emily’s and Alex’s death, Alex wants the remainder of his estate to be given to Ben. After Alex dies, Emily decides to remarry and give Alex’s estate to her new husband. As a result, Ben does not receive any part of his biological father’s estate.

Ben decides to bring this case to court because he believes he was unfairly disinherited. According to the presumption of resulting trust, Emily’s trustee must be able to prove that Alex intended to give the estate as a gift to Emily, not to be held in resulting trust. If Emily’s trustee cannot do this, Ben should receive the estate as intended by his father.

When there is a transfer of ownership using a joint tenancy agreement, stepchildren should still expect to receive their inheritance from their biological parents. If you are a stepchild who was disinherited by a stepparent through a joint tenancy held in resulting trust, you could be eligible to challenge the will. Contact an experienced estate lawyer to ensure that you receive your fair share of the estate.

Have a question about estate disputes 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.
January 20, 2023
Are Executors Entitled to Compensation?
Estate executors may have extensive and time-consuming responsibilities to fulfill, and, in most cases, they receive compensation for their efforts through executor’s fees. Sometimes, the person who writes the will specifies how to compensate the executor, but some wills make no mention of compensation for the executor. Is the executor still entitled to compensation when their estate plan doesn’t mention fees?

Wills Without Provisions for Executor’s Fees

When the will specifies the executor’s fees, the courts and beneficiaries cannot convene to modify the fees.

In short, yes – executors in British Columbia are entitled to compensation even when the will does not make any mention of executor’s fees. In such circumstances, the beneficiaries must unanimously agree upon a reasonable amount to compensate the executor.

According to the Trustee Act, the executor is entitled to a maximum of 5% of the gross aggregate value of the estate (the combined value of all assets) unless the will specifies otherwise. In most cases, 5% is a high figure for executor’s fees, and it is more common to pay fees worth 2-3% of the estate’s value.

If the beneficiaries and executor cannot come to an agreement, the Courts determine the fees owed to the executor. Additionally, if any of the beneficiaries are minors or mentally incapable, the Court will determine the fees.

How the Courts Determine Fair Executor’s Fees

When determining executor’s fees, the courts will consider the interests of both the executor and the beneficiaries. The case of McColl Estate (Re) (1967) summarized the criteria that British Columbia courts use to make this decision:
1. The magnitude (value) of the trust;
2. The care and responsibility involved in administrating the estate;
3. The time occupied in the administration of the estate;
4. The skill and ability displayed by the executor; and
5. The degree of success achieved in the final result of the administration.
The complexity of the estate plan plays a crucial role when determining executor compensation. For example, if the estate includes multiple small properties around the world, it can be hugely time-consuming and exhausting for the executor to finish the administration. On the other hand, if the estate is primarily cash, it will likely be a reasonably simple task for the executor to administrate the estate.

British Columbia Caselaw

The case of Sangha (Re) (2018) raises the question of how large of an executor’s fee is fair in the situation where a will does not specify executor’s fees. Since the will had only one beneficiary, the courts tasked themselves with determining a fair amount to compensate the executor to protect the interests of both parties. The executor was seeking 4% of the estate’s value ($91,644). The judge considered each of the 5 factors mentioned above to determine a reasonable fee. In summary, the judge noted the following:
1. The estate was not of particular complexity – it primarily consisted of a home in Vancouver, a vehicle, 3 bank accounts and personal various belongings (such as jewelry). These assets required minimal administration by the executor.
2. The proper care and responsibilities of demanded of executorship were taken. The executor had probate of the will granted, and paid appropriate taxes on behalf of the estate.
3. The administration process was not particularly time-consuming.
4. The skill and ability of the executor was deemed to be very low. The executor had terribly mishandled the sale of the testator’s jewelry.
5. While the executor successfully administered the estate and the vehicle, the liquidation of the jewelry was extremely unsuccessful, and this mishandling impacted the beneficiary financially.
In the end, the Judge decided that a more reasonable fee for the executor’s service was $35,000.

If you’re a beneficiary of an estate and believe that an executor is being unreasonably compensated, contact an experienced estate lawyer today. We can help to ensure that the amount payed in executor’s fees is fair to all interested parties.

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.
January 18, 2023
Benefits of Gifting your Estate Assets Before Death

People often hold onto their assets until death, giving them to loved ones, friends, and charities through a will. Though will writers commonly retain possession of their assets until passing, they should consider gifting cash or other assets before death. This enables the gifted assets to avoid probate fees. In Canada, gifts are tax-free.

Before gifting, create a detailed financial plan, outlining expected lifetime expenses. Prioritize personal needs and wants, as it is your estate and assets. Will writers should be careful to only gift assets that they will not want or need to support themselves in their lifetime. Gifting before death should only be used as a means of using excess estate assets, after you’re certain you can provide for yourself for the remainder of your life.

Advantages of Gifting Before Death

Ultimately, beneficiaries receive their inheritance, whether before or after your death. So, what’s the difference between beneficiaries receiving the funds before or after your death? There are many different benefits to gifting estate gifts before death. As mentioned above, the most important benefit to the majority of people is the reduction of probate fees.

Saving Money

Gifting is a popular method of maximizing an estate’s value. However, will writers need to be clear about their intentions when gifting assets.

Gifting during one’s lifetime can result in significant savings in fees, which can be passed down to the beneficiary.

Consider this example: A grandmother with $1,000,000 in cash assets anticipates spending only $100,000 for the remainder of her life. She gifts $900,000 to her beneficiaries and passes away the next day. Since BC probate fees are about 1.4% of an estate’s value, her estate would pay $1,400 in probate fees on the $100,000. The $900,000 gift incurs no probate fees or gift taxes. If she hadn’t gifted the money, the entire $1,000,000 would face probate, and the estate would pay approximately $14,000 in fees—an extra $12,600 cost.

You Get to Watch Loved Ones Enjoy the Gift

Some may find joy in watching family members use their inheritance. Monetary gifts can benefit young adults starting school, buying a home, or launching a business. The gift offsets costs, and the giver sees the positive impact on their loved ones’ lives. Further, gifting physical assets like land or high-value personal items can also have the effect of reducing probate fees and provide sentimental value for the gift giver.

Aiding for Personal Reasons

There can also be personal reasons that a will-writer might choose to give a gift before their death. In the case of a family emergency or unexpected circumstance, it can be extremely helpful to receive an inheritance as soon as possible. As a will-writer, you might recognize that you won’t necessarily need the excess money and it can make more sense in some scenarios to simply give a gift of cash, to help out. While it might seem unfair to do this, the other beneficiaries of your will can receive a higher percentage of the estate to make sure everyone is still receiving a fair share of the estate. There are various different work-arounds to ensure fairness amongst beneficiaries.

In the end, whether you give gifts before your death or name the inheritance in your will, those you wish to benefit from estate do so. The difference is that gift giving before death can avoid additional probate fees and provide sentimental value to you and your loved ones. Before naming any gifts, you should always be certain that you will keep enough to provide for the remainder of your own life.

Things to Consider Before Gifting

Unfortunately, gifting is a common reason for litigation in estate law, so will writers must be careful and clear about their intentions when distributing assets during their lifetime. It is important that will writers considering gifting significant portions of their estate during their lifetime are clear on their intentions for the asset transfer. The transfer of gifts should be recorded in a way that will make it clear that you did not intend for the receiver of the gift to hold the asset on resulting trust in order to minimize the risk of estate litigation after your passing.

If you need help estate planning, contact an experienced estate lawyer today. We will work with you closely to create the perfect estate plan for your situation, maximizing your estate’s value and convenience for your loved ones during an otherwise challenging period.

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.

December 14, 2022