September 2014 - Garton & Harris

How can a will be changed or contested?

September 25, 2014/in Wills/by gartonandharris

A simple will is the foundation of many individual estate plans in British Columbia, and a number of people rely on wills to ensure that their last wishes are honoured and that their property is distributed properly on death. Often, though, people must update or alter their wills to reflect changes in attitude or life events. Additionally, heirs and potential heirs may choose to challenge a will if they feel the testator’s wishes were not properly contained therein. In either case, the laws of British Columbia provide guidance.

The making, changing and contesting of wills are all governed by the Wills, Estates and Succession Act. With regard to changing a will, section 54 of the Act states that an alteration must be signed by the will-maker and his or her signature must be witnessed, with signatures of the witnesses near the alteration itself or at the conclusion of a memorandum that refers to the alteration. Alterations are valid if they are made in the same manner as valid wills are made.

A will may be contested if it fails to provide for the maintenance and support of a dependent or of the decedent’s surviving spouse. Reasons for contesting a will may include the revocation of the will or a part thereof by the will-maker, lack of mental capacity or of knowledge of the will’s contents, a mistake in the document, the undue influence of another person or fraud.

The validity of a will may be challenged in British Columbia during probate. Each case presents unique circumstances and the outcome of a will contest depends on the facts of the case. This post is meant as a broad overview and should not be read as legal advice. A wills and estates lawyer may be able to answer questions about changing or contesting a will. Additionally, a lawyer may help draft the documents necessary to challenge a will or oversee the alteration of an existing will.

Source: Legislative assembly of British Columbia, “Division 4 — Altering, Revoking and Reviving Wills“, September 24, 2014

How do I properly settle an estate in Canada?

September 20, 2014/in Estate Administration & Probate/by gartonandharris

Before an individual in British Columbia passes on, he or she may create a will and designate one person to administer the estate. In some cases, an alternate administrator or executor may be named in case anything happens to the first person. When a person is named as an administrator or executor, he or she is obligated to perform certain tasks on the estate’s behalf. Primarily, that person must gather an inventory of the estate and notify the testator’s next of kin.

The person charged with executing the estate will file a final tax return for it and take control of all assets and debts due to the estate. Any debts owed by the estate may need to be paid to creditors. An administrator or executor who does not pay these bills before distributing the estate may be held responsible. If necessary, subscriptions should be cancelled and credit card accounts should be closed.

If it becomes necessary to hire a lawyer to help administer the estate, the cost of legal representation may be paid out of the estate’s funds. However, that action may require the approval of beneficiaries or other interested parties. While a lawyer is not necessary to settle an estate, it may be beneficial to have one if the validity of a will comes into question. Self-help books and online resources may also sometimes provide guidance.

Consulting with an estate administration lawyer may be worthwhile for many reasons. Those who are not sure how or when to distribute the estate may wish to have a professional help with that process. Additionally, any legal challenges to a will or court filings may be resolved more easily with the assistance of a lawyer, and the lawyer may be able to outline the executor or administrators obligations during the execution of the estate.

Source: Ministry of Justice, “About Wills and Estates“, Sept. 15, 2014

Power of attorney in British Columbia

September 18, 2014/in Power of Attorney/by gartonandharris

Residents in British Columbia may benefit from understanding more about how power of attorney is handled in the province. Power of attorney can be described as documentation that appoints another person, referred to as an attorney, authority over making legal or financial decisions concerning someone’s assets or business interests. The most recent Power of Attorney Act, enacted in B.C. on Sept. 1, 2011, made changes regarding the enduring powers of attorney.

Residents in B.C. are permitted to designate power of attorney to anyone with very specific terms, such as cashing checks from a personal bank account. Often times, power of attorney forms may be located at the local federal Service Canada office. Powers of attorney can also include very broad powers so assets and other transactions may be handled in accord with the attorney’s best discretion. The Land Title Act often regulates power of attorney as it relates to real estate, unless it’s considered an enduring power under the latest version of the Power of Attorney Act.

Unless an enduring power of attorney is established, the authority is disbanded if the principal is determined to be mentally incompetent. People often use enduring power of attorney in an effort to prevent the court from appointing a committee to manage legal and financial decisions if the principal’s mental capacity is ever challenged. It’s worth noting that power of attorney does not grant authority over medical treatment or healthcare decisions, for that, a representation agreement is required.

People who need help drafting power of attorney or representation agreements may benefit from consulting a lawyer. Legal counsel may be able to help the principal understand the potential issues, obligations and rights that accompany these types of documents. Lawyers may also be effective in reviewing the agreements to ensure that they are legally sound and don’t contain any adverse exposure in the future.

Source: The Canadian Bar Association, “Power of Attorney and Representation Agreements “, Sept. 11, 2014

Administration and distribution of estate when there is no will

September 12, 2014/in Estate Administration & Probate/by gartonandharris

When a person dies in British Columbia without leaving a will, the person is said to be intestate and their estate is handled in accordance with the Wills, Estates and Succession Act. According to the act, the entire estate goes to a spouse when there are no descendants.

If the individual had a spouse and descendants, the household goods are distributed to the spouse along with a share of the other assets. In cases where the descendants are descendants of the spouse as well as the intestate, the spouse receives the first $300,000. Otherwise, the spouse receives the first $150,000. The remainder of the estate is then split equally between the spouse and the descendants.

In cases where the deceased individual had more than one spouse, the spouses might form an agreement regarding how to share the spousal portion of the estate. If an agreement cannot be reached, the court will decide the matter for them. If the deceased has no surviving spouse, the estate is divided among the descendants, and if there are no surviving spouses or descendants, the estate goes to various other family members according to an established formula. In cases where there are no parties to claim the estate, it is transferred to the ownership of the government.

Having a proper estate plan removes the uncertainty of who will administer the estate and how the property will be divided. Such plans might also provide for the needs of the estate owner and may determine who will make decisions for the owner should the owner be unable to do so for themselves. Anyone who needs guidance in this area may want to contact a lawyer who has experience in estate planning. A lawyer might also be able to help a person who is named responsible for estate administration.

Source: BC Laws, “Bill 4 – 2009 Wills, Estates and Succession Act,” Sept. 4, 2014

Estate planning errors to avoid

September 3, 2014/in Wills/by gartonandharris

Even though estate planning is important, many residents of British Columbia make a number of errors around it. Here are a few of the most costly ones.

One error is failing to keep a will updated. Individuals sometimes make a will but forget to alter it in case of divorce, births, deaths or changes of residence. Wills should be reviewed whenever there are changes in financial, familial and other circumstances, but it is also a good idea to review the document yearly to make sure it remains current.

Another error individuals make is creating their own wills. Doing so can seem like a way to save money, but there is a great deal of room for error with a will that is not prepared with the assistance of a lawyer. From using words that don’t have the legal connotations that the individual intended to leaving out important parts such as naming an executor or accounting for all assets and more, a DIY will can be a mistake in the long run.

Finally, one of the biggest errors of all is failing to write a will at all. Most adults do not have a will, and this means that their estate will be distributed according to government law. In such a case, spouses and children may not receive the inheritance desired by the benefactor. Furthermore, common-law spouses may receive nothing.

As a result, it is important for an individual to prepare a will. Things to consider include whether an individual has remarried and wants to make sure that their children get the bulk of the estate and who will be the best choice of executor. A lawyer can assist in ensuring all points are covered.

Source: Advisor.ca, “What Not to do in Estate Planning,” Elaine Blades, Aug. 25, 2014

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