We believe everyone should think about estate planning and have an estate plan in place now – not wait until you are old. An estate plan helps to ensure that your wishes are respected if the unexpected happens. It is the best way to make sure that you decide who manages your affairs, who becomes the guardian of your children, what happens to your assets and who is to receive the benefit of your estate.
A will is one of the estate planning documents we recommend having in place, but we also recommend having:
You might also consider having an advance care plan, which is a written plan with your wishes and instructions to someone you trust for your future health care.
An advance care plan may include:
By developing an estate plan and an advance care plan, you decide who manages your affairs, who becomes the guardian of your children and what happens to your assets, as well as, having control over your health care and finances in the event that you become mentally or physically incapable.
There are a few key questions that come up when dealing with Wills, let us answer them for you.
An estate plan is about ensuring that your family is protected in the event of your death or incapacity. We believe that for most people an effective estate plan includes a will, power of attorney and representation agreement.
A will sets out who you want to handle your estate, who is to be the guardian of your young children and who is to receive your assets upon your death. It is the best way to ensure that your estate is distributed to your loved ones according to your wishes.
We believe having a will is extremely important for without a will your assets may not go to those you want to benefit, and if you have young children, the guardian may not be the person you would have chosen.
An executor is someone you appoint in your will to be responsible for carrying out your wishes and instructions in your will. The executor can be one person or several people.
A codicil is a legal document that allows you to make a minor change to your Will and should be kept with your original will.
A power of attorney allows you to appoint someone you trust to handle your financial and legal matters on your behalf. Without a power of attorney your financial and legal matters may be difficult to manage if you are unable to do so, whether that be due to physical or mental incapacity or you simply being out of town.
A representation agreement is a document that allows you to give another person the power to make health care and personal care decisions for you. Without a representation agreement health care and personal care decisions may be difficult to decide if you are unable to do so on your own behalf.
An advance directive allows you to provide written instructions to give or refuse consent to certain health care matters if you have become physically or mentally incapable and such decisions need to be made; this includes life support and life prolonging medical interventions. While it does not cover personal care matters, it ensures that your wishes and instructions with respect to health care matters are followed.
A living will is not a legal document in B.C. The term “living will” has been used to describe a person’s written wishes for their health care treatments, particularly treatments they do not want in an end-of-life situation.
If you die without a will, then the distribution of your estate will, in most cases, be determined by the Wills, Estates and Succession Act. In such a situation, your estate may not be distributed in the way you would have wished and the costs of administering your estate may also be higher. If you have young children, you will also be giving up the right to appoint their guardian.
An executor is responsible for administering your estate and carrying out your wishes and your directions as stated in your will.
The basic duties of the executor or an administrator (if there is no will) include the following:
While having a will, power of attorney and a representation agreement are important, they do not eliminate the need for probate, with the associated probate fees.
Probate is the process whereby the B.C. Supreme Court reviews the will and confirms that it is valid and binding. The B.C. Supreme Court will also review the application for a representation grant and once approved, will confirm the authority of the executor if there is a will or appoint the administrator if there is no will.
A grant of probate or grant of administration is often required to transfer property, bank accounts and investment accounts to the executor or administrator and then to the beneficiaries. However, if all assets were jointly owned then probate may not be necessary.
Probate also involves the payment of probate fees, which are based on a percentage of the value of your estate assets.
Probate fees are based on a percentage of the value of one’s estate assets. In B.C. probate fees are essentially 1.4%, so on an estate worth $1,000,000, probate fees alone are approximately $14,000.
The basic application fee to commence an application for the grant is $200. In addition, if the value of the estate exceeds $25,000 the following fees are payable:
Basically, the guiding rule to determine the requirement for obtaining a grant of probate is to ascertain whether the holders of assets (for example, a bank) require a copy of the grant in order to transfer the asset.
However, even with small estates, an executor should still apply for probate if the estate will be a party to a lawsuit (perhaps brought on by family or creditors).
If there is a will, then usually the first named executor will apply. If the first executor is unable or unwilling to apply, then the alternate executor will apply. If there is no will, then the Wills, Estates and Succession Act determines the priority of those who may apply (usually a beneficiary with the consent of the beneficiaries representing a majority interest).
In our experience probate applications can take from a couple of months to a year depending on the size of the estate, the location of various assets, the number of beneficiaries and where they live, how long third parties take to respond to requests for information and how busy the probate registry is at the time of filing an application. However, the entire estate administration process can take up to two years, or more, to be completed.
Any person listed in the will as an executor, a beneficiary, and those who would have been entitled as beneficiaries if there was no will, are all entitled to see the will.
In British Columbia executors are entitled to compensation for their care, pains, trouble and time spent. Under the B.C. Trustee Act they are entitled to a maximum compensation of 5% of the gross aggregate value of the Estate. The compensation must be reasonable, agreed upon by the beneficiaries and for a simple estate is usually about 2-2.5%.
The Act also provides for a yearly fee for the care and management of the assets to a maximum of .4%.
You have worked hard to secure your financial position. Let us help you protect it and ensure your wishes are respected if the unexpected should happen.
It is simple and easy, just call us at 604-527-4242, or email at info@spagslaw.ca, or start your file online by clicking on “Start a new file” to fill out the Wills Information form.