Wills & Estate Planning

A will is a written document, signed at the end in the presence of two witnesses, which takes effect upon your death and contains instructions about how your possessions are to be divided at the time you die.  A "holograph will" is a handwritten one signed at the end but without any witnesses.  Although such a will may be valid in other provinces, it is not valid in British Columbia.

Any mentally competent adult can make a Will.  A minor, if married, in active military service or a sailor at sea can also make a valid Will.  Regardless of your mental state when you die, your Will is valid if you are of sound mind when you sign it.  This means that you must understand the nature and extent of your property and what you are doing with it.  You must also be aware of your obligations to your dependents.

If your Will does not reflect your wishes because anyone has forced you, against your wishes to make your Will a certain way, your Will shall be invalid.  Also, if you do not have the mental capacity mentioned above, you cannot make a valid Will.  If you marry after making your Will, your Will is automatically void unless you specifically state in your Will that the Will is made in contemplation of that marriage.

Why do you need a WILL?

A Will has the following functions:

1. appoints a person to look after your affairs after your death (your Executor);
2. appoints a guardian for any of your children under the age of 19 years;
3. selects the family, friends or charities whom you would like to Inherit your assets;
4. ensures beneficiaries receive their inheritances at the times and in the manner you feel is appropriate;
5. permits your estate to take advantage of potential tax savings;
6. reduces the costs of administering your estate;
7. avoids the law of in-testate succession which automatically determines who will receive your estate if you die without a Will.

It is particularly important that if you have a spouse or child who is mentally or physically disabled that a proper discretionary trust be included in your Will to care of their needs in the way most advantageous to them.

What happens if you die without a WILL?

In British Columbia, one of your next of kin must apply to the Supreme Court to be appointed the administrator of your estate.  Until such time as the administrator is appointed your assets are deemed to be held by the province.  If no one applies to act as administrator of your estate, the province will appoint the Official Administrator.  The process of administration is far more time consuming and costly than the process of probating a Will.

Once the administrator is appointed, your estate will be divided among your relatives in a pre-determined manner.  If you die leaving only a spouse, all of your' estate will pass to that spouse.  If you die leaving a spouse and one child, the spouse will get a life interest in your home and its contents, (if it was not held in joint tenancy) together with the first $65,000.00 of your assets and the balance will be divided one half to your spouse and one half to your child.  If you die leaving a spouse and more than one child, the initial distribution is the same and the remainder of the estate is divided one third to the spouse and the remaining two thirds equally among the children.  The funds payable to a child will be held in trust by the Public Trustee and paid in full to the child at the age of 19.  If you die without leaving a spouse or children, your estate will pass to your next of kin, being, in order, your parents, then your brothers and sisters, then your other closest relatives.

What property does not pass under your WILL?

Jointly held assets, which may include your residence, bank accounts, or joint investments, will pass automatically to the surviving joint tenant upon your death.

Any asset that has a named beneficiary, such as a life insurance policy or an RRSP, will pass directly to the named beneficiary.  Property which is held in a trust established during your lifetime which provides for assets passing to beneficiaries outside of your estate can also avoid inclusion in your estate.  Any assets which pass outside your estate do not attract probate fees and are secure from claims by creditors of your estate.

What goes into your WILL?

In your Will, you appoint an executor, who will be the person who will deal with your funeral arrangements, safeguard your assets and carry out the terms of your Will.  The duties of an executor can be onerous, so you should carefully choose a person who has good judgment, is available, is willing, is impartial, and is likely to survive you.  In some cases it will be appropriate to appoint more than one executor and in cases of larger estates or lengthy trusts, a trust company may be appropriate.

If you have children under the age of 19, you may appoint a guardian for them.  If you have not appointed a guardian for your children the province may determine who will be the guardian.

You will dispose of your assets in your Will, making any specific bequests and dividing the residue among your family, friends or charitable organizations.  A trust can be set up in your Will to look after children or to provide for adult handicapped persons or beneficiaries who may not be able to manage money well.  You can also state in your Will, if you wish, what your preference is for disposal of your remains and your executor will be obliged to carry out those wishes (providing it is not illegal or too outrageous).

How can your WILL be changed?

During your lifetime you can change your Will at any time, as long as you still have mental capacity, by executing a codicil which change parts of your Will or by preparing a new Will.

After your death, your Will can be changed by the Courts under the Wills Variation Act if the Court feels that you have not made adequate provision for a spouse or a child.  In British Columbia, the Courts having been very generous with adult children, often giving them a share of the estate even though it was directly contrary to the wishes of the Testator and even though the adult child was self supporting.

How does a WILL fit into an Estate Plan?

A Will is only one component of an estate plan.  Arrangement of ownership of your assets, corporate re-organizations, trusts, life insurance, powers of attorney and other vehicles can also be used in order to accomplish your estate planning ends.  In all cases, it is important to consult with a lawyer who practices in the estate planning area together with your accountant and possibly life insurance agent in order to establish the best plan for your needs.

NOTE:  This article is not legal advice and a lawyer should be consulted on any specific case.