Estate Administration & Probate Archives

What are an executor’s first steps in estate administration?

May 13, 2020/in Estate Administration & Probate/by gartonandharris

When people agree to take on an executorship, they are often aware of the overarching responsibility to administer a will. But, many are not as clear on where to start, or what the step-by-step process is when it comes to estate administration. Here are some of the first things British Columbia executors should do when the estate owner passes away.

The first thing an executor should do is to review the will to carefully review the testator’s intentions. Testators can better prepare their executors by providing a letter that explains the reasoning and intentions behind their estate planning decisions, especially if they might be called into question. However, the most important document to have prepared is a clearly defined will.

Once the executor has this information, he or she typically meets with the family to communicate the information therein. This is a much easier conversation if the testator already discussed the will with family prior to his or her death. Next, the executor should settle into the work of organizing files and compiling all information about assets and liabilities. This can be a uniquely challenging job, so it is ideal to pick an executor that is organized, capable of working with numbers, and has the time to dedicate to this task.

It is important to take these first steps seriously and to do them with integrity, communication and attention to detail. An executor has a fiduciary responsibility to take care of all assets and debts, so he or she may be held personally responsible if the process is mismanaged. Working with a British Columbia estate administration lawyer can help prevent missteps.

Dealing with estate administration without a written will

March 18, 2020/in Estate Administration & Probate/by gartonandharris

There are many steps involved in managing a person’s assets, liabilities and affairs after they pass away. When no formal estate plan or will is left, this can make the estate administration process more complex. In British Columbia, the term for passing away without a valid will is dying “intestate.” Fortunately, there are legal options available when this happens.

In British Columbia, the Wills Estates and Succession Act directs what should happen when someone dies intestate. Next steps depend first on living heirs, including a spouse and/or children. If a person has a spouse with no children, the process may be relatively straightforward as this spouse inherits everything.

Those with a spouse and children may have a slightly different situation. First, the spouse will retain a preferential share of the estate up to a certain amount as mandated by law. The leftover assets, known as residue, is divided among the spouse and children according to a predetermined formula.

For those who do not have a spouse, children will divide everything evenly. For those without a spouse or children, next of kin is involved. There is a succession of who is sought for next of kin estate administration when no spouse or children are present; starting with parents, then siblings, then siblings’ children, then other next of kin.

Some complications may arise during estate administration when a will is not present. The main negative consequence is that the assets belonging to the person who passes away may not be distributed in the way the individual would have wanted. Those with questions or concerns about intestate estate administration should reach out to a British Columbia estate planning lawyer.

Is it worth transferring property before death to avoid probate?

December 23, 2019/in Estate Administration & Probate/by gartonandharris

Those who are planning the future of their estate often have have concerns about fees when it comes time to transfer their wealth to next of kin. These concerns are amplified for those who own a significant amount of property, as probate fees increase for higher-valued estates. Many homeowners or wealthy individuals in British Columbia have questions about how they might take actions prior to passing away to avoid expenses where possible.

While there are some options that can be explored, alternatives often come at an even higher cost than probate. For example, an aging parent may think it wise for his or her children to buy out their home prior to them passing to avoid probate fees. However, the costs involved in a real estate transaction, such as land transfer taxes, could outweigh the prospective probate costs. Additionally, conflict over the use and upkeep of the home could arise if the parent and intends to remain living in the home even after a buyout from children.

Property owners may also consider putting next of kin on the deed of a home as co-owners, thereby eliminating the need for probate to handle the transition. This may seem like a straightforward option, but it can be a risky move in many cases. Putting a child on a house’s deed can leave the property vulnerable in a divorce or bankruptcy.

It is understandable that British Columbia property owners would want to minimize the impact of probate fees on their beneficiaries. Probate can make it necessary for people to sell property in order to liquidate the funds needed to pay the fees, which can be a bind for people. However, the fees involved in probate may be smaller than the costs of alternatives, such as risking adding a child to a house deed or taxes and fees involved in a buyout before death. A British Columbia lawyer can clarify all options that may be available, and help to allow for a smooth probate process should it be necessary.

Estate administration: When one executor lives abroad

November 12, 2019/in Estate Administration & Probate/by gartonandharris

Having an estate plan is vitally important for all adults regardless of their circumstances. In fashioning an estate plan, British Columbia residents must keep in mind who will be involved in estate administration once the time comes and there are a few things to think about when choosing an executor — especially if the executor doesn’t live in the country. For example, if a parent names two children as executors and one lives abroad, there may be some hurdles to overcome, but it could work.

Firstly, anyone who lives outside of Canada who is named an executor could renounce that decision by signing a renunciation form. If a nonresident executor does choose to take on the role, it might be difficult for him or her to access Canadian bank accounts, even though he or she has the right to make decisions regarding the estate. If the person lives in the States, tax implications might have to be overcome as well.

It is always wise to speak to adult children about estate planning and whether they’re on board with being named executors. It might be a good idea to name someone as a backup executor in a will, in any case. There are things that could possibly go sideways if not discussed beforehand.

Those involved in estate administration duties in British Columbia may find it helpful to speak to a lawyer about their roles, especially when sharing those duties with someone outside the country. A lawyer could also foot confusing questions about issues like nonresident executor bonds. It is always in an executor’s best interests to be informed about the laws that go along with estate administration.

Estate administration and estate planning for common law couples

October 1, 2019/in Estate Administration & Probate/by gartonandharris

Some couples may have lived together for years, yet choose to remain unmarried. Things are different today than they were decades ago and it has become socially acceptable for couples to live in common law unions. But some things still aren’t so easy for such couples and one of them involves estate planning so that estate administration in British Columbia can be as seamless as possible when the time comes.

Firstly, nearly half of all adult Canadians don’t have a will. That can be an additional issue for common law couples who may manage their finances separately. Common law partners might want to look out for some mistakes to avoid when writing their estate plans.

Some couples who live together may own property as tenants in common rather than as joint tenants. This could pose a problem in the long run since when one partner dies, his or her share of the home could pass on to an heir rather than to the remaining partner. Having a clause in a will that states a surviving partner can stay in the home after the death of the other is crucial and could avoid an awkward situation. Other pitfalls of estate planning in these instances could include leaving too much or too little to a surviving partner or leaving the wrong assets to a partner.

Estate planning and estate administration under any circumstances doesn’t need to be overly complicated or confusing, especially with the assistance of an experienced British Columbia lawyer. A lawyer will have an understanding of how the laws can affect couples who aren’t married, but who have been living together. Getting the guidance of a lawyer may ensure all the i’s are dotted and the t’s are crossed in the estate plans of cohabiting individuals.

Estate adminstration: RRSPs and RRIFs of a decedent

August 5, 2019/in Estate Administration & Probate/by gartonandharris

Taxes are something about which most adults are concerned. It’s no different when it comes to estate planning. An individual who has been tasked with estate administration duties in British Columbia needs to have some knowledge of how RRSPs and RRIFs are taxed after a person’s death. The values of both are usually included in the amount of assets of the deceased person and subject to taxation, but it’s not always that simple.

Much depends upon who the beneficiary is of those RRSPs or RRIFs. Tax can be deferred if a beneficiary is a spouse or common law partner, a child or grandchild who is financially dependent, or a dependent child or grandchild who has a physical or mental infirmity. There are conditions that apply in these instances.

Canadians should plan their estates with the understanding that funds will be need to pay income tax owing on these accounts when the time comes since a beneficiary – or an estate administrator for that matter – may be on the hook for doing so if that individual is not paid. Of course an individual has the option of reducing the amount of funds in these plans to try to reduce the tax, but that decision hinges upon how it’s done and whether the individual needs the money. The tax bracket in which the annuitant finds him or herself also might play a part in making that decision.

A British Columbia lawyer experienced in the laws that accompany estate administration can provide clarity on issues like RRSPs and RRIFs and estate planning. An estate administrator may need clarification on confusing issues like these. He or she may find the task easier after speaking to a lawyer.

Estate administration for single British Columbia residents

July 10, 2019/in Estate Administration & Probate/by gartonandharris

Everyone needs estate planning documents. Single British Columbia residents should also have wills and other estate planning documents, but when it comes to choosing an individual for estate administration duties, a single person without children may wonder who to choose for that task. When other family members are too busy with their own lives to take on the task, a single person does have other options.

There are people who can be hired to help in writing estate planning documents and to administer an estate when the time comes. British Columbia residents in these positions can take advantage of trust companies and of representation agreements. A lawyer with whom an individual has a good relationship may also be a wise choice.

The only instance when a family member should be involved is when health care decisions need to be made. Family members can be good substitute decision-makers when a testator can no longer make decisions for him or herself. Lawyers can act as executors of a will and are in position to act as estate administrators.

A British Columbia lawyer may be able to step in to help a single client who has no children with his or her estate planning needs. Part of this could include estate administration duties, which entail making sure beneficiaries receive their assets, that debts are paid and final taxes are filed on behalf of the testator. Choosing a trusted legal professional may give a client the peace of mind he or she needs when writing estate planning documents.

Estate administration: Dealing with an insolvent estate

June 25, 2019/in Estate Administration & Probate/by gartonandharris

Being named as a beneficiary of some estates may not exactly be a windfall. During the estate administration process it may be found that some British Columbia estates are actually insolvent. In other words, they have more debts associated with them than assets and that can pose problems for beneficiaries and executors who should be aware of what to do and what not to do in such cases.

During the administration of an insolvent estate, an executor has to be very mindful about which expenses need to be paid out of the estate. Insolvent estates can be nightmares for executors, so before agreeing to become an executor of an estate, an individual shouldn’t shy away from asking a testator some pointed questions before agreeing to the task. Once an executor begins accessing information regarding a testator’s account, he or she must accept the challenge of administering the estate. In other words, he or she can no longer say no to the job.

An executor has more decisions to make with an insolvent estate. When it comes to creditors associated with the estate, an executor needs to be more mindful regarding the ranking of debts and the priority in which they need to be paid. It can be extremely stressful for an executor.

Estate administration of an insolvent estate likely needs the help of an experienced British Columbia lawyer. An executor in such a case may need extra help and may have many more questions regarding what likely will be a more complex task. It may be best to get the guidance of a lawyer before moving forward in any estate administration duties in this regard.

Estate administration: Why it takes so long to get an inheritance

March 7, 2019/in Estate Administration & Probate/by gartonandharris

Getting an inheritance can take some time. One of the last jobs an executor is likely to do during estate administration in British Columbia is to disseminate inheritance funds. There are many things to be done with an estate before it can be closed, the first of which is taking inventory of the decedent’s assets and debts. Estate planning documents must be located and must be in order before anything else can happen.

All the assets have to be evaluated, and things can get slowed down if the estate has to go through probate. Those assets have to pay any debts the decedent may have owed. These debts include such things as credit cards, outstanding bills, utilities, etc. A final tax must be filed, and taxes must be paid if the decedent owed them.

The time it takes for all this to transpire isn’t written in stone, with a lot depending on each individual estate. If there are several beneficiaries, it may take longer for each to receive what he or she is due. An estate can be settled in a few months or it could actually take years.

Estate administration is a time-consuming process, and a British Columbia lawyer’s knowledge and experience could prove invaluable in the process. A lawyer will be able to advise executors in obtaining court approval of estate administration and to help with any challenges an executor faces. Estate administration can be confusing and overwhelming. A lawyer’s guidance may make the process much less taxing on an executor and other family members of the decedent.

Estate administration: Keeping the wealth in the family

February 5, 2019/in Estate Administration & Probate/by gartonandharris

People work hard for their money. Having a family’s wealth protected from unforeseen events like divorce will likely ensure that when the time comes for estate administration in British Columbia, there won’t be issues connected with a divorce. The last thing prosperous Canadians want is for the money they’ve worked so hard for to end up going to those who they wouldn’t want it to go to and that sometimes means to a divorced adult child’s former spouse or common law partner.

The issue is apparently causing many affluent Canadians grief. A recent survey showed these folks don’t trust their heirs’ partners when it comes to managing an inheritance. Although it may mean an uncomfortable discussion, wealthy parents of adult children should make their feelings known if such is the case. There is one saving grace in that in most provinces any gifts or inheritances received during a marriage are not included in the net family property if they are not part of overall family assets such as a matrimonial home or joint bank accounts.

Any gifts or inheritance funds should be kept in a separate account from a spouse or common law partner and in the name of the heir alone. Also, a cash gift could be given by way of a loan which also protects it from creditors. In any case, a marriage contract in these cases, might be a wise idea.

A British Columbia lawyer experienced in estate planning and estate administration can draw up documents using the right language to protect an heir’s assets. A lawyer will also be able to offer advice on prenuptial and postnuptial agreements as well as cohabitation agreements that may be able to protect a client’s inheritance. These documents tie in closely with estate planning.

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