Assuring your finances and personal
affairs are well in order
Handling an estate is often an overwhelming task. It can be especially difficult as the executor is typically also grieving at this time. If a mistake is made while administering an estate, the executor could be personally liable.
Our estate planning and probate lawyers at FH&P Lawyers can help executors as much as needed in estate administration. Our team also helps families and administrators deal with estates when someone has died without a will (called intestate).
Some very common questions regarding probate include:
Why is a court in charge of estate administration after death?
The normal way that we transfer ownership of property that comes with a title is to sign the title over to someone else. An example is signing a transfer form to transfer title of your car to a purchaser. After a person dies, it becomes necessary for a Court to authorize another individual, a “Personal Representative” to sign transfers of titled property on behalf of the deceased.
Are there some kinds of property that do not need court estate administration?
Many kinds. Here are some examples:
Generally, real property which is held in joint tenancy with right of survivorship passes to the surviving joint tenant without probate, subject to a contrary intention at the time that the joint tenancy was established. There is a need to complete some paperwork, however:
- Insurance policies pass directly to a beneficiary, if one has been designated;
- RRSPs pass directly to a beneficiary, if one has been designated;
- Annuities pass directly to a beneficiary, if one has been designated;
- Bank accounts held in ITF (“In Trust For”) accounts move to the designated beneficiary or to a replacement Trustee;
- Property in the name of a Trustee who has been instructed to convey the property from the person who set up the trust to the named beneficiaries of the trust.
- As a general rule, bank accounts held jointly pass to the survivor automatically. *
*NOTE: This will depend upon the forms signed at the inception of the bank account, what type of contributions have been made by each of the account holders, who the account was joint with (spouse, child, friend), and whether or not the account's status is challenged, etc. If accounts are substantial, you should talk to our team about joint bank accounts.
Do all estates need to go through probate?
No. First look to see if the estate contains probatable property. If it all passes by joint tenancy designation or beneficiary designation, there is generally no need for probate.
Second, if there are probatable assets, look at the amount. Although there is no longer an exemption for estates under $25,000.00, lower value assets can sometimes pass outside of probate. For example, bank accounts can frequently be released if the bank is given an indemnity.
How does a Power of Attorney compare to having an inter-vivos or living trust?
There is little relationship between probate and estate taxes. If you own it, it is counted toward computing your estate tax obligation, regardless of whether it has to be under a Court’s Estate Administration. However, the person who is appointed by the Court to be the Personal Representative of the estate is required to file the estate tax return if one is required. Further, the Personal Representative can become personally liable for the estate taxes if he/she distributes the assets of the estate to beneficiaries yet fails to pay all or a portion of the tax bill to the taxing authorities.
How long does probate take?
Assuming that the beneficiaries are on good terms and are aware of the location of the assets of the estate, it is relatively simple. That estate will likely settle in two months.
Is a Personal Representative entitled to be compensated?
He/she is entitled by law to “reasonable” compensation of up to 5% of the gross value of the estate. Compensation cannot be taken until all residual beneficiaries consent. If they don’t, the Personal Representative must apply to the British Columbia Supreme Court to “pass” their account and thereby receive the Court’s approval.
Is it possible to contest a Will?
There are a few traditional grounds for contesting a Will:
- There was a defect in the way the Will was signed or witnessed. Examples include forgery, or the fact that the Will was witnessed by someone before the Testator signed the Will;
- The Testator lacked legal capacity to make a Will at the time the Will was signed;
- The Testator was the victim of undue influence of another person, which overcame the Testator’s true desire regarding the disposition of his own estate;
- Aside from the traditional grounds, there are other grounds based upon statutes:
- The Will fails to adequately provide for one or more children or spouse;
- The Will fails to make provision for the children of a prior marriage;
- The Will specifically disinherits a present spouse.
