Difference between revisions of "Preparing a Will and Estate Planning"

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{{Dial-A-Law Blurb}}
{{REVIEWEDPLS | reviewer = [https://www.mclellanherbert.com/Our-Team.shtml Hugh McLellan], McLellan Herbert|date= November 2020}} {{Dial-A-Law TOC|expanded = wills}}
Preparing a will is a key step in planning for what happens when you pass away. Learn the essentials of preparing a will and tips for creating an estate plan.


{{Dial-A-Law TOC|expanded = wills}}
==What you should know==
This script explains '''wills'''. They are a key part of personal planning. Other parts of personal planning involve '''powers of attorney''', '''enduring powers of attorney''', and '''representation agreements'''. Script [[Power of Attorney and Representation Agreements (Script 180)|180]] covers these topics.
===A will is a legal document===
A will is a document that says what you want done with your property when you die. It’s a map for those you leave behind.  


For information on what happens if a person becomes mentally incapable and has not done any personal planning, see script [[Committeeship (Script 426)|426]] on ''committeeship''. For more information on '''wills''', see scripts [[What Happens When You Die Without a Will? (Script 177)|177]] to [[The Disappointed Beneficiary (Script 179)|179]].
===Why prepare a will===
Every adult who owns assets or has a spouse or young children should have a will. But surprisingly, many people don’t.  


==What is a will?==
Having a clear statement of your wishes gives you some control over who gets what after you’re gone. And it helps your loved ones feel confident they’re carrying out those wishes. Knowing your intentions will save them time, stress and money at a difficult time.  
A will is a document that says what you want done with your property when you die. Examples of property that wills deal with include real estate, money, investments, and personal and household belongings that you own. You can change your will at any time. A will has no legal effect until you die.


==Why should you make a will?==
Preparing a will lets you choose an '''executor'''. This is a person who carries out the instructions in the will. If you’re a parent, you can also appoint a guardian to care for any children under age 19 after your death.
Every adult who owns assets or has a spouse or young children should have a will. But surprisingly, many people don’t. The few hours that you spend with a lawyer planning your estate could save your spouse, children, and other beneficiaries much time, effort, and money. If you don’t have a will, you lose control over who gets how much of your estate and when. You also give up the right to appoint a guardian for any young children you have. And the costs to administer your estate will be much higher.  


==A will doesn’t deal with some types of property==
===What your will doesn’t deal with===
A will generally doesn’t cover property that you don’t own exclusively. For example, a joint bank account or a house owned in joint tenancy has a “right of survivorship.” That means that they automatically become the exclusive property of the joint survivor when you die. Also, a will does not apply to property like life insurance, RRSPs, RRIFs and TFSAs if you have already named a beneficiary for them.
A will generally doesn’t cover property you don’t own exclusively. For example, a joint bank account or a house owned in joint tenancy has a '''right of survivorship'''. That means they automatically become the property of the joint survivor when you die (we explain some exceptions to this rule shortly).  


==A will is only one part of estate planning==
{| class="wikitable"
You can transfer property to beneficiaries outside of a will, without taxes and other costs. This is called estate planning, explained later in this script.
|align="left"|'''Tip'''
You can also own property with someone else as a '''tenant-in-common'''. When you die, your share doesn’t automatically go to the other owner.  


==The executor==
Say you own a family cottage with your siblings. If owned as tenants-in-common, you can pass your own share to whomever you want, through your will. Your share won’t automatically go to your other siblings when you die.
You have to appoint an executor in a will. They have to:
|}
*safeguard the estate (for example, change the house insurance if the house is unoccupied or keep any vehicle insured)
*gather up your assets
*pay your debts (including taxes)
*divide what remains of your estate among the people named in your will to receive a share of your estate—they are called beneficiaries


==How should you choose an executor?==
Also, a will doesn’t apply to property like life insurance, retirement savings plans and income funds, and tax-free savings accounts if you’ve already named a beneficiary for them. When you die, the bank or trust company directly transfers the asset, or pays it out, to the person you named.
Choose someone you trust and who will likely be alive when you die. They may be a trusted family member or friend. Often, people appoint their spouse, but if you are both old, an adult child or children may be better. It helps if they are well organized, good at keeping records, and good communicators. Most importantly, they must be willing to be an executor.


If you have a second or blended family with stepchildren, you should see a lawyer to ensure that the wishes of both you and your spouse are followed. Your will does not have to be the same as your spouse’s, but it is important to consider all aspects of your family situation.
===If you don’t prepare a will===
If you pass away without having made a will, the law says how your property will get distributed, and who has the right to “administer” your affairs. [https://dialalaw.peopleslawschool.ca/when-someone-dies-without-a-will/ Our information on when someone dies without a will] explains how these rules work. Dying without a will can make things more difficult (and more costly) for your loved ones.  


You can appoint more than one executor and they can act together as co-executors. You should also appoint an alternate executor if the first executor cannot act. If you have a complex estate or investments or need someone to take over the operation of a company, you should name a professional executor who may be a lawyer, accountant or other professional. Trust companies can also be executor if the estate is big enough. Professionals and trust companies charge for their services.
===A will is only one part of estate planning===
With '''estate planning''', you may be able to reduce fees and taxes that your estate would otherwise pay. Consider, for example, the following strategies.


==If you have minor children, appoint a guardian in your will==
====Joint assets====
If you’re a parent or guardian of a minor child (under 19 years old), the ''[http://www.bclaws.ca/civix/document/id/complete/statreg/11025_01 Family Law Act]'' lets you appoint someone to be the child’s guardian in your will.
'''Joint assets''' can include a joint bank account that two or more people own, or a home owned by two or more people as joint tenants. The owners of joint assets have a “right of survivorship.” So if you and another person own a home as joint tenants, the surviving joint owner will get the home when you die. The home is said to '''pass outside your will'''.  


It’s important to name a guardian if you’re a single parent. For separated parents, it’s best to agree on the choice of a guardian if one or both of you die. If that’s not possible, it’s important to consider your parenting responsibilities (through a court order or separation agreement) and ensure that you include them as part of appointing a guardian in your will.
One advantage of owning property this way is that no probate fees have to be paid for the home. Probate fees are paid to the court based on the value of the estate assets.  


Although your choice of guardian is important, the court doesn’t have to follow your wishes and may appoint a different guardian if it would be in the child’s best interests. And the court will consider the wishes of any child 12 or older. So you should check with an older child about their wishes before deciding on who to name as guardian in your will.
A joint asset doesn’t always pass to the surviving owner. In several recent cases, courts have said that a jointly-owned asset had to be returned to the estate. If your joint asset is with another adult other than your spouse (such as an adult child), then the court may make them return the asset to your estate. It would then be distributed according to your will. If you don’t want this to happen, talk to an estates planning lawyer. They may recommend clearly documenting your intention to give the asset to the other joint holder when you die.  


The guardian’s job is to look after your minor children, and they may in turn appoint a replacement guardian. But the guardian generally doesn’t have any rights to look after a minor child’s property – the guardian can only receive and hold a minor child’s property or money if it’s worth less than $10,000. So you should appoint a trustee to manage a minor child’s inheritance. The executor can be the same person as the trustee.
====Assets with a designated beneficiary====
Life insurance policies, registered retirement savings plans, registered retirement income funds, and tax free savings accounts all let you name a '''beneficiary''' to get the proceeds when you die. If you name a beneficiary and they survive you by at least five days, the proceeds flow outside your will to them. For example, a beneficiary will get the money in a registered retirement savings plan directly from the company holding the plan, and not from the estate.


==What if you don’t make a will?==
====Trusts====
If you don’t have a will, your net estate is distributed to your next of kin under the ''[http://www.bclaws.ca/civix/document/id/complete/statreg/09013_01 Wills, Estates and Succession Act]'' (WESA). Script [[What Happens When You Die Without a Will? (Script 177)|177]] “What Happens When You Die without a Will?” has more on this.
Depending on the size of your estate, you may want to set up a trust (outside of the will) to protect your estate against a wills variation claim. We explain wills variation claims shortly.


==It’s important to make a will properly==
====Charitable gifts====
You should have your will professionally prepared, as a will is a binding legal document. To make an effective will requires a good understanding of property ownership rules and the law about wills. There are rules and formalities that must be followed, no matter how simple the will. Otherwise, the will may not be valid. Also, the words used must be chosen carefully so the will is clear and unambiguous. If the formalities are ignored or the terms of the will are unclear, there will be extra legal costs for your estate to get court orders to fix the problems, and that may not be entirely possible.
You can reduce the income tax owing from the sale of your assets on your death by making charitable gifts in your will.


==Your will can be changed after you die==
==Prepare a will==
If your will doesn’t properly provide for your spouse or children, they can sue under WESA to have your will varied or changed by the BC Supreme Court. A spouse includes both a married spouse and a person you have lived in a marriage-like relationship with for 2 years before your death.
===Step 1. Gather information and prepare well===
It helps if you have the following information ready before you prepare your own will or meet with a lawyer or notary public:
* A list of everyone in your immediate family, with their full names and contact information, their relationship to you, and the ages of all your children, including stepchildren.
* The names and addresses of any other people or organizations you want to give gifts to.
* A list of all your '''assets''' and their values, including your home, car, investments, and any personal items of significant monetary value.
* A description of how you own these assets (for example, alone or with someone else).
* A document that shows whose name is on the title of any real estate you own.
* Details of any insurance policies you own, and, specifically, the '''beneficiaries''' under the policy.
* Details of any pensions, retirement savings plans or income funds, and tax-free savings accounts, and who the beneficiaries are.
* Information on the structure of any business you operate (for example, a company or partnership).
* Any separation agreements or court orders requiring you to make support payments or dealing with guardianship of any minor children.
* The name, address, and occupation for your '''executor''' and '''guardian'''.


Courts and WESA are clear that people have both a legal and moral obligation to provide for a spouse or child in a will. If you’re thinking of disinheriting a spouse or child (even a self-sufficient, adult child), or leaving them less than they might reasonably expect, or, in the case of a child, less than their siblings, see a lawyer before finalizing your will. The courts may change what your will gives to your beneficiaries.  
===Step 2. Choose an executor===
The '''executor''' is the person you name in your will to carry out your instructions. They locate all of your property, pay any debts and funeral costs, prepare the final tax return, and distribute the rest of the estate as the will specifies.
Most people ask a family member or close friend to be their executor. You can also ask a lawyer, a notary public, a private trust company, or the Public Guardian and Trustee.  


If you have a disabled adult child, and do not leave enough for them, the Court may order that they receive more from the estate.
====Qualities to look for when choosing an executor====
Choose someone you trust and who will likely be alive when you die. They may be a trusted family member or friend. Often, people appoint their spouse, but if you’re both old, an adult child or children may be better. It helps if your executor is well organized, good at keeping records, and a good communicator. Most importantly, they must be willing to do the job as executor — so check in with them beforehand!


==Your estate may have to pay probate fees==
If you have a complex estate or investments or need someone to take over the operation of a company, consider asking a lawyer, accountant, or trust company to act as your executor. Be aware that your estate will be charged for their services.
Probate is a process to prove a will is legally valid. An executor must apply to BC Supreme Court to confirm that a will is legally valid. The word “probate” means “proof”. The Court will prove that the will is valid. The following probate filing fees must be paid to the court registry. If the estate is worth:


*less than $25,000 – no fee
{| class="wikitable"
*over $25,000 – basic fee of $208
|align="left"|'''Tip'''
*between $25,000 and $50,000 – basic fee of $208 plus $6 per $1,000 ( $358 for the first $50,000)
You can appoint more than one executor and they can act together as '''co-executors'''. It’s important to appoint an '''alternate executor''', too. This is a back-up person who can take over if the first executor can’t or won’t act.
*over $50,000 – $358 plus $14 per $1,000 of estate value over $50,000
|}


These fees can change. Details are in the ''[http://www.bclaws.ca/civix/document/id/complete/statreg/00_99004_01 Probate Fee Act]'' and the [http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/168_2009_06 Supreme Court Civil Rules].
===Step 3. Prepare your will===
With good do-it-yourself materials, you can write a simple will. The will can take care of basic concerns, such as leaving a home, investments, and personal items to loved ones. You should be aware there are rules and formalities that must be followed, no matter how simple the will. Otherwise, the will may not be valid.


Probate fees are usually just a small part of the total cost of the process. There can be legal fees, fees to transfer assets from one name to another, and other costs.
A will is a legally binding document. Having your will prepared by an experienced estates lawyer or notary public is the safest way to avoid mistakes. Knowing your will is properly drafted can give you peace of mind. The words used must be chosen carefully so that the will is clear.  


The Probate Registry of the Supreme Court decides the estate value based on documents filed by the executor. Probate fees can often be avoided or reduced by estate planning outside of a will, and a lawyer can help with that planning.
Notaries can prepare simple wills. Getting advice from a lawyer is particularly important when there are features such as a blended family, a charitable gift, property outside of British Columbia, a family business, a desire to hold property in trust for someone (such as minor children), or a wish to leave certain people out of your will.  


==Taxes may also have to be paid==
===Step 4. Make plans for minor children===
When a person dies, the law assumes that they sold all their assets on the '''date immediately before their death'''. If the assets increased in value since they were bought, a capital gains tax will have to be paid for the same year as the person’s death. There are some exceptions, such as gifts to spouses and principal residences, but if you own assets that will be subject to capital gains tax on your death, you should speak to a lawyer or an accountant to see how to deal with this tax. For example, a recreational property in your name alone will normally be subject to capital gains tax.  
If you’re a parent or guardian of a minor child (under 19 years old), the [https://www.canlii.org/en/bc/laws/stat/sbc-2011-c-25/latest/sbc-2011-c-25.html ''Family Law Act''] lets you appoint someone to be the child’s '''guardian''' in your will.


==What are some aspects of estate planning?==
It’s important to name a guardian if you’re a single parent. For separated parents, it’s best to agree on the choice of a guardian if one or both of you die. If that’s not possible, it’s important to consider your parenting responsibilities (through a court order or separation agreement) and ensure that you include them as part of appointing a guardian in your will.
With estate planning, you may be able to reduce probate fees and taxes that your estate would otherwise pay. Consider, for example, the following:


*'''Joint assets''': the owners of joint assets, such as a joint bank account that two or more people own, or a house owned by two or more people as joint tenants, have a “right of survivorship”. This means that when one person dies, the other joint owners own the asset. So if you and another person own a house as joint tenants, the surviving joint owner will get the house when you die. The house passes outside your will. No probate fees have to be paid by your estate for the house, and if the house is your principal residence, no tax will be paid by your estate.  
Although your choice of guardian is important, the court doesn’t have to follow your wishes and may appoint a different guardian if it would be in the child’s best interests. The court will consider the wishes of any child 12 or older. So you should check with an older child about their wishes before deciding on who to name as guardian in your will.


:But in several recent cases, courts have ruled that a jointly-owned asset had to be returned to the estate. If your joint asset is not with your spouse or a minor child but instead with an adult child or other adult, then that joint holder may actually own the asset in trust for you. This can be avoided by clear documentation showing that, when they become a joint owner with you, you intend to give the property to them after you die. For example, if you add an adult son to your bank account as a joint holder and you want the account to belong to him when you die, you should sign a deed of gift. Otherwise, the law may assume that your son holds the bank account in trust for your estate and the money will be paid out under your will. It is very common for an older person to have a joint account with one of their children on the understanding that the account is being held in trust for all the children, when the parent dies.
====Protecting a minor child’s inheritance====
The personal guardian generally doesn’t have any rights to look after a minor child’s property  — they can only receive and hold a minor child’s property or money if it’s worth less than $10,000. If a minor is entitled to a share in an estate, and the will doesn’t say that their share is going to be held in '''trust''' for them, [https://www.canlii.org/en/bc/laws/stat/sbc-2009-c-13/129389/sbc-2009-c-13.html#sec153 the law] says their share has to be paid to the '''Public Guardian and Trustee'''. The money is then held in trust for the minor until they’re 19 years old. It’s best to speak to a lawyer about drafting a trust so you can choose your own trustee to manage the minor’s inheritance. The executor can be the same person as the trustee.


*'''RRSPs, RRIFs and TFSAs''': Registered Retirement Savings Plans (RRSP), Registered Retirement Income Funds (RRIF) and Tax Free Savings Accounts (TFSA) all let you name a beneficiary to get the proceeds when you die. If you name a beneficiary and they survive you by at least 5 days, the proceeds go outside your will to them. For example, an RRSP beneficiary will get the money in the RRSP directly from the company holding the RRSP, and not from the estate.
===Step 5. File a wills notice===
You can file a '''wills notice''' with the [https://www2.gov.bc.ca/gov/content/life-events/death/wills-registry wills registry] of the [https://www2.gov.bc.ca/gov/content/family-social-supports/seniors/health-safety/health-care-programs-and-services/vital-statistics Vital Statistics Agency]. A wills notice says who made the will and where it is kept. This is a voluntary registration and has a small filing fee. Vital Statistics doesn’t take a copy of your will. You or your lawyer or notary fill out an information form listing where your will is kept. After a person dies, a search of the wills registry is required for the probate process to make sure the court has the last will.  


*'''Life Insurance policies''': life insurance policies let you name a beneficiary to receive money at your death. Again, this money passes outside your will and does not go through the estate; this means that the life insurance funds are not used to pay off the debts of the estate.
===Step 6. Regularly review your will===
It’s good to review your will every three to five years. Does it still reflect your current wishes? You should also consider changing your will whenever your financial or personal circumstances change (such as if you get divorced), or if beneficiaries die or reach the age of majority.  


*'''Trusts''': depending on the size of your estate, you may want to set up a trust, to protect your estate against a wills variation claim.
====Getting married or divorced====
Getting married does not cancel a will. The exception is if you married before March 31, 2014, and made a will before you got married. If the exception applies, your will was cancelled when you got married (unless the will said it was made in contemplation of your marriage).


*'''Charitable gifts''': you can reduce the income tax owing from the sale of your assets on your death by making charitable gifts in your will.
What about divorce or separation? If you had a spouse at the time you made your will, and later separated from them, your will is treated as if your spouse died before you. So your will is still valid, but any gift you left to your former spouse won’t be recognized. As well, if you named your former spouse as your executor, the appointment would no longer be effective. The rest of the instructions in your will can be followed.


==You should hire a lawyer to help you==
==After you pass away==
An experienced lawyer will know the rules that apply to wills and can help with estate planning to save money for your beneficiaries, giving you the peace of mind of knowing that your will is properly drafted and valid, and that your estate will be paid out as you wish.
===Your will can be changed after you die===
If your will doesn’t adequately provide for your spouse and children (including illegitimate and adopted children), they can ask a court to change the will. This is called a '''wills variation claim'''. [https://dialalaw.peopleslawschool.ca/challenging-a-will/ Our information on challenging a will explains this in more detail].  


==How much does a will cost?==
===Your estate may have to pay probate fees===
It depends on how complex your situation is. Most lawyers charge a fee that reflects the time, skill and responsibility involved. Discuss the fees with your lawyer when you call to arrange a meeting.
With most estates, an executor must apply to court to '''probate''' the will. The word “probate” means “proof”. The process proves the will is legally valid. [https://dialalaw.peopleslawschool.ca/your-duties-as-executor/ Our information on the duties of the executor explains the process]. '''Probate fees''' must be paid to the court registry. The fees depend on how much the estate is worth:
* less than $25,000 — no fee
* between $25,000 and $50,000 — $6 per $1,000 (this amounts to a probate fee of $150 on an estate valued at $50,000)
* over $50,000 — $150 plus $14 per $1,000 of estate value over $50,000


==You can minimize the legal fees by being well prepared==
These fees can change. Details are in the ''[https://www.canlii.org/en/bc/laws/stat/sbc-1999-c-4/latest/sbc-1999-c-4.html Probate Fee Act]'' and the [https://www.canlii.org/en/bc/laws/regu/bc-reg-168-2009/latest/bc-reg-168-2009.html?searchUrlHash=AAAAAQAZc3VwcmVtZSBjb3VydCBjaXZpbCBydWxlcwAAAAAB&resultIndex=1 Supreme Court Civil Rules].
It helps if you have the following information ready before you meet with your lawyer:


*A list of everyone in your immediate family with their full names and contact information, their relationship to you, and the ages of all your children, including stepchildren.
Probate fees can often be avoided or reduced by estate planning outside of a will. A lawyer can help with that planning.
*The names and addresses of any other people or organizations you want to give gifts to.
*A list of all your assets and their values, including your home, car, investments, and any personal items of significant monetary value.  
*A description of how you own these assets (for example, alone or with someone else).
*A document that shows whose name is on the title of any real estate you own.
*Details of any insurance policies you own, and, specifically, who the beneficiary of the policy is.
*Details of any pensions, RRSPs, RRIFs and TFSAs, and who the beneficiaries are.
*Information on the structure of any business you operate (for example, a company or partnership).
*Any separation agreements or court orders requiring you to make support payments or dealing with guardianship of any minor children.
*The name, address, and occupation of your choice for your executor and guardian.


==Update your estate plan==
Probate fees are usually just a small part of the total cost of the process. There can be legal fees, fees to transfer assets from one name to another, and other costs.
A well-drafted will plans for various possibilities (since it’s impossible to predict the future). Things such as what happens if an adult child or grandchild dies before you. But you should still consider changing your will whenever your financial or personal circumstances change, or if beneficiaries die or reach the age of majority.
 
For example, if you made a will when your children were young and named your parents as guardian and executor, you’ll no longer need the guardian clause when your children are adults. And you may want your children or a sibling to be executor instead. It’s good to review your will every three to five years to ensure that it still reflects your current wishes.
 
==Review your will after any change in your marital status==
If you married before March 31, 2014, when WESA came into effect, your will made before marriage was automatically revoked, unless the will said it was made in contemplation of your marriage. After March 31, 2014, a marriage does not revoke a will. It is now more important than ever to ensure that you make a will to include everyone that you want to share in your estate.
 
If you divorced before March 31, 2014, the portions of your will that appoint your ex-spouse as an executor and make a gift to them are not valid. Any divorce after March 31, 2014 will mean that the appointment or gift won’t be valid if:


*you’ve lived separate and apart for at least two years before your death (and one or both of you intended to live separately and apart permanently).
===Your estate may have to pay taxes===
*before you die, an event occurs that causes an interest in family property to arise (under the Family Law Act).
When a person dies, the law assumes they sold all their assets on the date immediately before their death. If an asset increased in value since it was purchased, a '''capital gains tax''' will have to be paid for the same year as the person’s death (even if the property is not actually sold). There are some exceptions, such as gifts to spouses and principal residences. But if you own assets that will be subject to capital gains tax on your death, you should speak to a lawyer or an accountant to see how to deal with this tax. For example, a recreational property in your name alone will normally be subject to capital gains tax.  
*in the case of a marriage-like relationship, one or both of you end the relationship before you die.


==Filing a wills notice==
==Common questions==
You can file a wills notice with the [http://www.vs.gov.bc.ca/wills Vital Statistics Agency]. A wills notice says who made the will and where it is kept. This is a voluntary registration and has a small filing fee. The Vital Statistics Agency doesn’t take a copy of your will. You or your lawyer fill out an information form listing where your will is kept. After a person dies, a search of the Wills Registry is required for the court probate process to ensure the court has the last will.  
===Where should I keep my will?===
If your original will is in paper form, you can keep it with your lawyer or notary, or in a safety deposit box at your bank. That way the will is in a permanent, safe, and fireproof location.


==Where should you keep your will?==
If your original will is in electronic form, there will be multiple true originals. Assemble and store these in the same place, such as with your notary or lawyer or a secure electronic repository.
Keep the original will with your lawyer or in a safety deposit box at your bank so that you have a permanent, safe and fireproof location. Your executor will need your original will (not a copy) to give to the Probate Registry. You should let your executor know where you keep your will and other important documents, so they know where to get it.  


==What is LEAVE A LEGACY™?==
Your executor will need your original will (not a copy) to give to the probate registry. You should let your executor know where you keep your will and other important documents, so they know where to get it.
LEAVE A LEGACY™ is a public awareness program of the [http://www.cagp-acpdp.org/ Canadian Association of Gift Planners]. Its objective is to promote, through the media and educational sessions for the public, the importance of preparing a will. It also raises awareness about leaving a gift for charity in the will.  


==More information==
===How much does it cost to get professional help to make a will?===
*The [http://www.nidus.ca/ Nidus Personal Planning Resource Centre & Registry] has detailed information on all aspects of personal planning including fact sheets, forms, and videos.
It depends on how complex your situation is. Most lawyers and notaries charge a fee that reflects the time, skill, and responsibility involved. Discuss the fees with your lawyer or notary when you call to arrange a meeting. You should be able to get free estimates. Feel free to shop around and compare prices.
*Scripts [[What Happens When You Die Without a Will? (Script 177)|177]] to [[Power of Attorney and Representation Agreements (Script 180)|180]] and [[Committeeship (Script 426)|426]]


===What if I made a will in another province?===
If you made a will in another province and now live in BC, your will may work in BC. You need to see a lawyer to find out.


[updated April 2017]
==Who can help==
===With preparing a will===
:'''Society of Notaries Public of BC'''
:A notary public can help you prepare a will. The Society of Notaries Public of BC offers a list of notaries in the province.
:Call 604-681-4516
:Call 1-800-663-0343 (toll-free)
:[https://www.notaries.bc.ca/ Visit website]


'''The above was last reviewed for accuracy by Hugh McLellan and edited by John Blois.'''
===More information===
----
:'''Nidus Personal Planning Resource Centre & Registry'''  
:Has detailed information on all aspects of personal planning, including fact sheets, forms, and videos. 
:[http://www.nidus.ca/ Visit website]


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Latest revision as of 23:07, 16 November 2023

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Hugh McLellan, McLellan Herbert in November 2020.
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 · Preparing a Will & Estate Planning

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Preparing a will is a key step in planning for what happens when you pass away. Learn the essentials of preparing a will and tips for creating an estate plan.

What you should know

A will is a legal document

A will is a document that says what you want done with your property when you die. It’s a map for those you leave behind.

Why prepare a will

Every adult who owns assets or has a spouse or young children should have a will. But surprisingly, many people don’t.

Having a clear statement of your wishes gives you some control over who gets what after you’re gone. And it helps your loved ones feel confident they’re carrying out those wishes. Knowing your intentions will save them time, stress and money at a difficult time.

Preparing a will lets you choose an executor. This is a person who carries out the instructions in the will. If you’re a parent, you can also appoint a guardian to care for any children under age 19 after your death.

What your will doesn’t deal with

A will generally doesn’t cover property you don’t own exclusively. For example, a joint bank account or a house owned in joint tenancy has a right of survivorship. That means they automatically become the property of the joint survivor when you die (we explain some exceptions to this rule shortly).

Tip

You can also own property with someone else as a tenant-in-common. When you die, your share doesn’t automatically go to the other owner.

Say you own a family cottage with your siblings. If owned as tenants-in-common, you can pass your own share to whomever you want, through your will. Your share won’t automatically go to your other siblings when you die.

Also, a will doesn’t apply to property like life insurance, retirement savings plans and income funds, and tax-free savings accounts if you’ve already named a beneficiary for them. When you die, the bank or trust company directly transfers the asset, or pays it out, to the person you named.

If you don’t prepare a will

If you pass away without having made a will, the law says how your property will get distributed, and who has the right to “administer” your affairs. Our information on when someone dies without a will explains how these rules work. Dying without a will can make things more difficult (and more costly) for your loved ones.

A will is only one part of estate planning

With estate planning, you may be able to reduce fees and taxes that your estate would otherwise pay. Consider, for example, the following strategies.

Joint assets

Joint assets can include a joint bank account that two or more people own, or a home owned by two or more people as joint tenants. The owners of joint assets have a “right of survivorship.” So if you and another person own a home as joint tenants, the surviving joint owner will get the home when you die. The home is said to pass outside your will.

One advantage of owning property this way is that no probate fees have to be paid for the home. Probate fees are paid to the court based on the value of the estate assets.

A joint asset doesn’t always pass to the surviving owner. In several recent cases, courts have said that a jointly-owned asset had to be returned to the estate. If your joint asset is with another adult other than your spouse (such as an adult child), then the court may make them return the asset to your estate. It would then be distributed according to your will. If you don’t want this to happen, talk to an estates planning lawyer. They may recommend clearly documenting your intention to give the asset to the other joint holder when you die.

Assets with a designated beneficiary

Life insurance policies, registered retirement savings plans, registered retirement income funds, and tax free savings accounts all let you name a beneficiary to get the proceeds when you die. If you name a beneficiary and they survive you by at least five days, the proceeds flow outside your will to them. For example, a beneficiary will get the money in a registered retirement savings plan directly from the company holding the plan, and not from the estate.

Trusts

Depending on the size of your estate, you may want to set up a trust (outside of the will) to protect your estate against a wills variation claim. We explain wills variation claims shortly.

Charitable gifts

You can reduce the income tax owing from the sale of your assets on your death by making charitable gifts in your will.

Prepare a will

Step 1. Gather information and prepare well

It helps if you have the following information ready before you prepare your own will or meet with a lawyer or notary public:

  • A list of everyone in your immediate family, with their full names and contact information, their relationship to you, and the ages of all your children, including stepchildren.
  • The names and addresses of any other people or organizations you want to give gifts to.
  • A list of all your assets and their values, including your home, car, investments, and any personal items of significant monetary value.
  • A description of how you own these assets (for example, alone or with someone else).
  • A document that shows whose name is on the title of any real estate you own.
  • Details of any insurance policies you own, and, specifically, the beneficiaries under the policy.
  • Details of any pensions, retirement savings plans or income funds, and tax-free savings accounts, and who the beneficiaries are.
  • Information on the structure of any business you operate (for example, a company or partnership).
  • Any separation agreements or court orders requiring you to make support payments or dealing with guardianship of any minor children.
  • The name, address, and occupation for your executor and guardian.

Step 2. Choose an executor

The executor is the person you name in your will to carry out your instructions. They locate all of your property, pay any debts and funeral costs, prepare the final tax return, and distribute the rest of the estate as the will specifies. Most people ask a family member or close friend to be their executor. You can also ask a lawyer, a notary public, a private trust company, or the Public Guardian and Trustee.

Qualities to look for when choosing an executor

Choose someone you trust and who will likely be alive when you die. They may be a trusted family member or friend. Often, people appoint their spouse, but if you’re both old, an adult child or children may be better. It helps if your executor is well organized, good at keeping records, and a good communicator. Most importantly, they must be willing to do the job as executor — so check in with them beforehand!

If you have a complex estate or investments or need someone to take over the operation of a company, consider asking a lawyer, accountant, or trust company to act as your executor. Be aware that your estate will be charged for their services.

Tip

You can appoint more than one executor and they can act together as co-executors. It’s important to appoint an alternate executor, too. This is a back-up person who can take over if the first executor can’t or won’t act.

Step 3. Prepare your will

With good do-it-yourself materials, you can write a simple will. The will can take care of basic concerns, such as leaving a home, investments, and personal items to loved ones. You should be aware there are rules and formalities that must be followed, no matter how simple the will. Otherwise, the will may not be valid.

A will is a legally binding document. Having your will prepared by an experienced estates lawyer or notary public is the safest way to avoid mistakes. Knowing your will is properly drafted can give you peace of mind. The words used must be chosen carefully so that the will is clear.

Notaries can prepare simple wills. Getting advice from a lawyer is particularly important when there are features such as a blended family, a charitable gift, property outside of British Columbia, a family business, a desire to hold property in trust for someone (such as minor children), or a wish to leave certain people out of your will.

Step 4. Make plans for minor children

If you’re a parent or guardian of a minor child (under 19 years old), the Family Law Act lets you appoint someone to be the child’s guardian in your will.

It’s important to name a guardian if you’re a single parent. For separated parents, it’s best to agree on the choice of a guardian if one or both of you die. If that’s not possible, it’s important to consider your parenting responsibilities (through a court order or separation agreement) and ensure that you include them as part of appointing a guardian in your will.

Although your choice of guardian is important, the court doesn’t have to follow your wishes and may appoint a different guardian if it would be in the child’s best interests. The court will consider the wishes of any child 12 or older. So you should check with an older child about their wishes before deciding on who to name as guardian in your will.

Protecting a minor child’s inheritance

The personal guardian generally doesn’t have any rights to look after a minor child’s property — they can only receive and hold a minor child’s property or money if it’s worth less than $10,000. If a minor is entitled to a share in an estate, and the will doesn’t say that their share is going to be held in trust for them, the law says their share has to be paid to the Public Guardian and Trustee. The money is then held in trust for the minor until they’re 19 years old. It’s best to speak to a lawyer about drafting a trust so you can choose your own trustee to manage the minor’s inheritance. The executor can be the same person as the trustee.

Step 5. File a wills notice

You can file a wills notice with the wills registry of the Vital Statistics Agency. A wills notice says who made the will and where it is kept. This is a voluntary registration and has a small filing fee. Vital Statistics doesn’t take a copy of your will. You or your lawyer or notary fill out an information form listing where your will is kept. After a person dies, a search of the wills registry is required for the probate process to make sure the court has the last will.

Step 6. Regularly review your will

It’s good to review your will every three to five years. Does it still reflect your current wishes? You should also consider changing your will whenever your financial or personal circumstances change (such as if you get divorced), or if beneficiaries die or reach the age of majority.

Getting married or divorced

Getting married does not cancel a will. The exception is if you married before March 31, 2014, and made a will before you got married. If the exception applies, your will was cancelled when you got married (unless the will said it was made in contemplation of your marriage).

What about divorce or separation? If you had a spouse at the time you made your will, and later separated from them, your will is treated as if your spouse died before you. So your will is still valid, but any gift you left to your former spouse won’t be recognized. As well, if you named your former spouse as your executor, the appointment would no longer be effective. The rest of the instructions in your will can be followed.

After you pass away

Your will can be changed after you die

If your will doesn’t adequately provide for your spouse and children (including illegitimate and adopted children), they can ask a court to change the will. This is called a wills variation claim. Our information on challenging a will explains this in more detail.

Your estate may have to pay probate fees

With most estates, an executor must apply to court to probate the will. The word “probate” means “proof”. The process proves the will is legally valid. Our information on the duties of the executor explains the process. Probate fees must be paid to the court registry. The fees depend on how much the estate is worth:

  • less than $25,000 — no fee
  • between $25,000 and $50,000 — $6 per $1,000 (this amounts to a probate fee of $150 on an estate valued at $50,000)
  • over $50,000 — $150 plus $14 per $1,000 of estate value over $50,000

These fees can change. Details are in the Probate Fee Act and the Supreme Court Civil Rules.

Probate fees can often be avoided or reduced by estate planning outside of a will. A lawyer can help with that planning.

Probate fees are usually just a small part of the total cost of the process. There can be legal fees, fees to transfer assets from one name to another, and other costs.

Your estate may have to pay taxes

When a person dies, the law assumes they sold all their assets on the date immediately before their death. If an asset increased in value since it was purchased, a capital gains tax will have to be paid for the same year as the person’s death (even if the property is not actually sold). There are some exceptions, such as gifts to spouses and principal residences. But if you own assets that will be subject to capital gains tax on your death, you should speak to a lawyer or an accountant to see how to deal with this tax. For example, a recreational property in your name alone will normally be subject to capital gains tax.

Common questions

Where should I keep my will?

If your original will is in paper form, you can keep it with your lawyer or notary, or in a safety deposit box at your bank. That way the will is in a permanent, safe, and fireproof location.

If your original will is in electronic form, there will be multiple true originals. Assemble and store these in the same place, such as with your notary or lawyer or a secure electronic repository.

Your executor will need your original will (not a copy) to give to the probate registry. You should let your executor know where you keep your will and other important documents, so they know where to get it.

How much does it cost to get professional help to make a will?

It depends on how complex your situation is. Most lawyers and notaries charge a fee that reflects the time, skill, and responsibility involved. Discuss the fees with your lawyer or notary when you call to arrange a meeting. You should be able to get free estimates. Feel free to shop around and compare prices.

What if I made a will in another province?

If you made a will in another province and now live in BC, your will may work in BC. You need to see a lawyer to find out.

Who can help

With preparing a will

Society of Notaries Public of BC
A notary public can help you prepare a will. The Society of Notaries Public of BC offers a list of notaries in the province.
Call 604-681-4516
Call 1-800-663-0343 (toll-free)
Visit website

More information

Nidus Personal Planning Resource Centre & Registry
Has detailed information on all aspects of personal planning, including fact sheets, forms, and videos.
Visit website
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