Estate Settlement
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A will serves as the deceased person's blueprint for distributing their assets and possessions after their death, their last will and testament ensures a smooth transition and prevents potential disputes among beneficiaries.
But what if someone passes away without leaving a will?
In such situations, British Columbia's intestate laws step in to dictate the distribution of assets, potentially leading to outcomes that may not reflect the true wishes of the deceased.
In this comprehensive guide, we delve into the repercussions of dying without a will in BC and the inheritance laws as according to the Wills, Estates, and Succession Act, S.B.C. 2009, c. 13.
An "intestate estate" refers to the property and assets of a person who dies without having made a valid will. In these cases, the distribution of the estate is determined by laws set by the jurisdiction, rather than the personal wishes of the deceased.
In British Columbia, intestate succession is governed by the Wills, Estates and Succession Act (WESA), S.B.C. 2009, c. 13. According to Section 25 of WESA, the standard asset distribution scheme will apply when there is no will, as well as when a will is "silent on the status" of a part of the estate (partial intestacy).
The WESA defines the order of priority for distribution starting with the spouse, then children, and then other relatives. The specific share of the estate each party is entitled to depends on the presence and number of these relatives. If no eligible relatives can be found, the estate will "escheat" to the provincial government, meaning the government will be entitled to the deceased's assets.
Let's take a deeper look into the intestate succession laws in BC:
When an individual dies intestate and leaves behind a spouse (which includes married people and those living in a "marriage-like relationship" for at least two years) but no descendants (children, grandchildren, etc.), according to the Wills, Estates, and Succession Act (WESA), the spouse is entitled to the entirety of the estate.
This includes all assets, property, and any other holdings the deceased had at the time of their death. The distribution of assets in this case is straightforward, as the spouse automatically becomes the sole beneficiary of the intestate estate.
The term "marriage-like relationship" typically refers to what is commonly known as a common-law relationship.
In the case where the deceased has both a spouse and descendants, the distribution of the estate becomes slightly more complex. According to WESA, the spouse is entitled to the household furnishings and a set amount ($300,000 if all the children are also children of the spouse, or $150,000 if the deceased had children from a previous relationship).
The remainder of the estate is then split equally, with half going to the spouse and the other half distributed equally among the descendants. It's important to note that the spouse's entitlement is given priority before any assets are distributed to the children. If the total value of the estate is less than the set amount, the spouse will receive the entire estate.
If an individual dies intestate and has no spouse but has descendants, the entire estate is divided equally among the descendants. This division is per stirpes, meaning it goes down the line of descendants (for example, if a child of the deceased is also deceased but had children, those grandchildren would inherit their parent's share). The distribution process in this case ensures that the deceased's lineage directly benefits from the estate.
In the case where the deceased has no spouse and no descendants, the estate is distributed to other relatives based on a priority order defined by WESA. This includes parents, siblings, grandparents, siblings of parents and cousins, great grandparents, and descendants of great grandparents (second cousins etc.).
If none of these relatives can be found, the estate will "escheat" to the provincial government. This means that the government will be entitled to the deceased’s assets, essentially inheriting the estate when there are no identifiable or locatable kin.
In the event of a person's death without a will, and in the absence of any remaining guardians for a minor child, the appointed authority as per the Child, Family and Community Service Act steps in as the personal guardian of the child. Concurrently, the Public Guardian and Trustee assumes the role of the child's property guardian.
Should a family member or another party be interested in assuming guardianship, they have the option to submit an application to the court for consideration.
In situations where there is no will, the personal representative plays a crucial role in the estate administration process, which includes:
just to name a few of their duties.
The Wills, Estates, and Succession Act (WESA) prioritizes the spouse of the deceased to serve as the administrator of the estate. If the spouse isn't appointed or cannot serve in this role, the children of the deceased are the next in priority order.
In situations where neither the spouse nor the children are available or able to act as the administrator, the court can appoint a person they consider appropriate under the circumstances.
The administrator's appointment requires the consent of the majority of the deceased’s children. This means that the children's agreement can significantly affect who is ultimately appointed as the administrator.
The process of appointing an administrator begins with the court. Upon the death of an individual without a will, the court takes the initiative to appoint an administrator, starting with the spouse, then the children, and finally a person they consider suitable if neither the spouse nor children can take on this role.
Imagine John, a widower with three adult children, passes away without a will. In this case, his children are the next in line to become the estate administrator. If one child wishes to take on the role but the other two do not, the willing child can become the administrator with the consent of their siblings.
The process of administering an intestate estate in British Columbia involves several steps, which I will present in a numbered format for clarity.
These steps involve both legal and practical actions to ensure the deceased's assets are properly distributed according to the Wills, Estates, and Succession Act (WESA) in BC.
Appointment of Administrator: The first step involves the appointment of an estate administrator. If the deceased didn't leave a will, the court must appoint an administrator. The spouse is given priority to be appointed as administrator, then the children of the deceased, and if neither the spouse nor the children are appointed, the court may appoint a person they deem appropriate.
Apply for a Grant of Administration: The appointed administrator must apply to the court for a grant of administration, which gives them legal authority to administer the estate. This involves filling out required forms and submitting them to the BC Probate Registry.
Gather Information about the Estate: The administrator needs to locate and assess the value of the deceased's assets (such as property, bank accounts, investments) and liabilities (such as debts, loans, taxes).
Notification of Interested Parties: The administrator must notify all beneficiaries, creditors, and other interested parties of the death and the administration process.
Pay Debts and Taxes: The administrator is responsible for using the estate's assets to pay off any outstanding debts and taxes. This may involve selling some of the estate's assets.
Distribution of Assets: After debts and taxes are paid, the remaining assets are distributed according to BC's intestacy laws as specified in WESA. If there is a spouse, they get the first share. The remainder is then divided among the spouse and children, if any.
Keeping Records: The administrator should keep detailed records of all transactions, including expenses, payments to creditors, and distributions to beneficiaries. This is important for accountability and for any potential audits or disputes.
Final Accounting and Discharge: Once all assets have been distributed and debts paid, the administrator prepares a final account showing all the transactions they've made. This is usually shared with the beneficiaries for approval. After the final accounting is approved, the administrator can apply to the court for a discharge, which releases them from their duties and responsibilities.
Closing the Estate: The final step in the process is closing the estate. This usually involves filing any necessary documents with the court or the probate registry, and notifying relevant parties that the estate has been fully administered and is now closed.
Please note that this is a simplified guide, and the actual process may be more complex depending on the specifics of the estate and the circumstances of the deceased. Professional legal assistance is typically required to navigate this process.
In conclusion, the administrator plays an essential role in managing and distributing the assets of the deceased person who has passed away intestate. Their responsibilities are broad and carry significant implications, making the role a crucial one in the process of estate distribution
Settling an estate can be challenging, nonetheless if it's an intestate estate. We understand how overwhelming settling an estate can be. But remember, you don't have to go through it alone.
Our experienced team has decades of experience of settling intestate estates in BC. We invite you to book a FREE consultation with our team.
In this free consultation, we will go over your specific situation, answer your questions, and provide you with a clear path to settle your loved ones estate.
You will gain a clearer understanding of your responsibilities and what needs to be done - helping to alleviate your stress during this difficult time.
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