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

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{{Dial-A-Law TOC|expanded = wills}}
{{Dial-A-Law TOC|expanded = wills}}
This script explains '''wills''' and '''estate planning'''. Wills 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.
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.


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]].
==Understand your legal rights==


==What is a will?==
===A will is a legal document===
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.
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?==
===Why you should 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. 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.  
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 you spend preparing a will and 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 your money and property, 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==
===A will doesn’t deal with some types of property===
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). Also, a will does not apply to property like life insurance, retirement savings plans and income funds, and tax-free savings accounts if you have already named a beneficiary for them.


==A will is only one part of estate planning==
===If you don’t prepare a will===
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.
If you don’t have a will, your net estate is distributed to your qualifying next-of-kin or the provincial government under the ''[https://www.canlii.org/en/bc/laws/stat/sbc-2009-c-13/latest/sbc-2009-c-13.html Wills, Estates and Succession Act]''. Our information on [[What Happens When You Die Without a Will? (Script 177)|what happens when you die without a will (no. 177)]] explains this in more detail.


==The executor==
===A will is only one part of estate planning===
You have to appoint an executor in a will. They have to:
With ''estate planning''', you may be able to reduce fees and taxes that your estate would otherwise pay. Consider, for example, the following strategies.
*deal with your remains and funeral
 
*safeguard the estate (for example, change the house insurance if the house is unoccupied or keep any vehicle insured)
====Joint assets====
*gather up your 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”. This means that when one person dies, the other joint owners own the asset. 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'''. No probate fees have to be paid by your estate for the home (probate fees are paid to the court based on the value of the estate assets). If the home is your principal residence, no tax will be paid by your estate.
*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?==
Note that 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. In practice, this means that the asset is returned to your estate and distributed according to your will.  
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.
This can be avoided by clear documentation showing that, when the person (say, your adult child) became a joint owner with you, you intended 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 to help them manage their affairs while they’re alive, on the understanding that the account is being held in trust for all the children, when the parent dies.


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.
====Assets with a designated beneficiary====
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 go outside your will to them. For example, a beneficiary will get the money in a registered retirement savings plans directly from the company holding the plan, and not from the estate.


==If you have minor children, appoint a guardian in your will==
====Life insurance policies====
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.
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 the life insurance funds are not used to pay off the debts of the estate.


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.
====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.


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.
====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.


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.
==Preparing a will==


==What if you don’t make a will?==
===It’s important to get it right===
If you don’t have a will, your net estate is distributed to your qualifying next-of-kin or the provincial government 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.
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.


==It’s important to make a will properly==
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. You can be confident your affairs will be handled according to your wishes. To make an effective will requires a good understanding of property ownership rules and the law about wills. The words used must be chosen carefully so that the will is clear. If the formalities are ignored or the terms of the will are unclear, there may be extra legal costs for your estate to get court orders to fix the problems — and in some cases, that may not even be possible.
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.


==Your will can be changed after you die==
Getting advice from a lawyer or notary public 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.
If your will doesn’t properly provide for your spouse or children (including illegitimate and adopted children) they can sue under WESA to have your will varied or changed by the BC Supreme Court. Script [[The Disappointed Beneficiary (Script 179)|179]] has more on this. 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.


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.
===You must appoint an executor in your will===
You have to appoint an '''executor''' in a will. An executor needs to:
*deal with your remains and funeral
*safeguard the estate (for example, change the home insurance if the home 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 — these people are called '''beneficiaries'''


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 are 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.


==Your estate may have to pay probate fees==
===You can appoint more than one executor===
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:
You can appoint more than one executor and they can act together as '''co-executors'''. It’s important to appoint an '''alternate executor''', who can take over if the first executor can no longer act.  


*less than $25,000—no fee
If you have a complex estate or investments or need someone to take over the operation of a company, consider naming 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.
*over $25,000—basic fee of $208
*between $25,000 and $50,000—basic fee of $208 plus $6 per $1,000 ( $358 for the first $50,000)
*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].
===If you have minor children, appoint a guardian for them in your will===
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.


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.
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.
 
====The guardian’s role====
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.


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.
====Create a trust for a minor child’s interest====
Make sure your will is written so that a child under 19 won’t have direct access to their share until they’re 19 or beyond. 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, [http://canlii.ca/t/52x69#sec153 the law] says their share has to be paid to the '''Public Guardian and Trustee''' to be held in trust for the minor until they’re 19 years old. It’s best to speak to a lawyer about drafting a trust.  


==Your estate may have to pay taxes==
===You can minimize legal fees by preparing well===
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.  
It helps if you have the following information ready before you meet with a lawyer or notary public about preparing your will:
*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'''.


==Estate planning to reduce probate fees and taxes==
===Filing a wills notice===
With estate planning, you may be able to reduce probate fees and taxes that your estate would otherwise pay. Consider, for example, the following:
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 court probate process to ensure the court has the last will.


*'''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.  
===You should review your will to make sure it still reflects your wishes===
It’s good to review your will every three to five years to ensure that it still reflects your current wishes. You should still consider changing your will whenever your financial or personal circumstances change, or if beneficiaries die or reach the age of majority.  


: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.
For example, if you prepared 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 become adults. And you may want your adult children or a sibling to be executor instead.  


*'''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.
===Review your will after any change in your marital status===
If you married before March 31, 2014 (when a new wills and estates law came into effect), any will made before marriage was automatically cancelled when you married, unless the will said it was made in contemplation of your marriage. After March 31, 2014, a marriage does not revoke — that is, cancel —  a 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.
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),
*before you die, an event occurs that causes an interest in family property to arise (under the ''Family Law Act''), or
*in the case of a marriage-like relationship, one or both of you end the relationship before you die.


*'''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.
==After you pass away==


*'''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.
===Your will can be changed after you die===
If your will doesn’t properly provide for your spouse or children (including illegitimate and adopted children), they can request to have your will changed by a court. This is called a '''wills variation claim'''. Our information on [[The Disappointed Beneficiary (Script 179)|challenging a will (no. 179)]] explains this in more detail.  


==You should hire a lawyer to help you==
A '''spouse''' includes both a married spouse and a person you have lived in a marriage-like relationship with for two years before your death.
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.


==How much does a will cost?==
The law is 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.  
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.


==You can minimize legal fees by preparing well==
If you have a disabled adult child, and do not leave enough for them, the court may order that they receive more from your estate. A lawyer can help draft an appropriately worded '''trust''' for a disabled adult child.
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.
===Your estate may have to pay probate fees===
*The names and addresses of any other people or organizations you want to give gifts to.  
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 (no. 178) explain the process. In applying for probate, '''probate fees''' must be paid to the court registry. The fees depend on how much the estate is worth:
*A list of all your assets and their values, including your home, car, investments, and any personal items of significant monetary value.  
*less than $25,000 — no fee
*A description of how you own these assets (for example, alone or with someone else).
*over $25,000 — basic fee of $208
*A document that shows whose name is on the title of any real estate you own.
*between $25,000 and $50,000 — basic fee of $208 plus $6 per $1,000 ($358 for the first $50,000)
*Details of any insurance policies you own, and, specifically, who the beneficiary of the policy is.
*over $50,000 — $358 plus $14 per $1,000 of estate value over $50,000
*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==
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].
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.  
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.


==Review your will after any change in your marital status==
The probate registry of the BC 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. A lawyer can help with that planning.
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:
===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 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 (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.


*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).
==Common questions==
*before you die, an event occurs that causes an interest in family property to arise (under the Family Law Act).
*in the case of a marriage-like relationship, one or both of you end the relationship before you die.


==Filing a wills notice==
===Where should I keep my will?===
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. 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.  
Keep the original will 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. 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.  


==Where should you keep your will?==
===How much does a will cost?===
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.  
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 quotes. You can shop around and compare prices.


==Wills made in other provinces==
===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.
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.


==Blended families==
==Get help==
People in blended families need legal help to ensure their will meets legal requirements to make adequate provision for their spouse and children.


==Handwritten wills==
===With preparing a will===
Handwritten wills are valid if they are properly signed and witnessed. Even if the will is not made properly, a court may be able to fix it, but this can be expensive.
A notary public can help you prepare a will. The '''Society of Notaries Public of BC''' offers a list of notaries in the province.
:Telephone: 604-681-4516 in the Lower Mainland
:Toll-free: 1-800-663-0343
:Web: [https://www.notaries.bc.ca/ notaries.bc.ca]


==What is LEAVE A LEGACY™?==
'''MyLawBC''' is an online resource from Legal Services Society, the agency that provides legal aid in BC. MyLawBC steers you in preparing a simple will through a set of questions. It also gives information on wills and personal planning documents such as powers of attorney and representation agreements.
[https://www.cagp-acpdp.org/en/leave-a-legacy 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.  
:Web: [http://mylawbc.com/paths/wills mylawbc.com/paths/wills]
 
'''Access Pro Bono''' offers an in-person clinic in Vancouver staffed by volunteer lawyers to help low-income seniors (ages 55+) and people with terminal illnesses prepare a will.
:Telephone: 604-424-9600
:Web: [http://www.accessprobono.ca/willsclinic accessprobono.ca/willsclinic]
 
===More information===
The '''Nidus Personal Planning Resource Centre & Registry''' has detailed information on all aspects of personal planning, including fact sheets, forms, and videos. 
:Web: [http://www.nidus.ca/ nidus.ca]


==More information==
*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.
*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]]




[updated October 2018]
[updated October 2018]


'''The above was last reviewed for accuracy by Hugh McLellan and edited by John Blois.'''
'''The above was last reviewed for legal accuracy by [https://www.mclellanherbert.com/Our-Team.shtml Hugh McLellan], McLellan Herbert.'''
 
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Revision as of 01:32, 3 March 2019

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.

Understand your legal rights

A will is a legal document

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 you should 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. The few hours you spend preparing a will and 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 your money and property, 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

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). Also, a will does not apply to property like life insurance, retirement savings plans and income funds, and tax-free savings accounts if you have already named a beneficiary for them.

If you don’t prepare a will

If you don’t have a will, your net estate is distributed to your qualifying next-of-kin or the provincial government under the Wills, Estates and Succession Act. Our information on what happens when you die without a will (no. 177) explains this in more detail.

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”. This means that when one person dies, the other joint owners own the asset. 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. No probate fees have to be paid by your estate for the home (probate fees are paid to the court based on the value of the estate assets). If the home is your principal residence, no tax will be paid by your estate.

Note that 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. In practice, this means that the asset is returned to your estate and distributed according to your will.

This can be avoided by clear documentation showing that, when the person (say, your adult child) became a joint owner with you, you intended 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 to help them manage their affairs while they’re alive, on the understanding that the account is being held in trust for all the children, when the parent dies.

Assets with a designated beneficiary

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 go outside your will to them. For example, a beneficiary will get the money in a registered retirement savings plans directly from the company holding the plan, and not from the estate.

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 the life insurance funds are not used to pay off the debts of 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.

Preparing a will

It’s important to get it right

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. You can be confident your affairs will be handled according to your wishes. To make an effective will requires a good understanding of property ownership rules and the law about wills. The words used must be chosen carefully so that the will is clear. If the formalities are ignored or the terms of the will are unclear, there may be extra legal costs for your estate to get court orders to fix the problems — and in some cases, that may not even be possible.

Getting advice from a lawyer or notary public 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.

You must appoint an executor in your will

You have to appoint an executor in a will. An executor needs to:

  • deal with your remains and funeral
  • safeguard the estate (for example, change the home insurance if the home 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 — these people are called beneficiaries

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 are 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.

You can appoint more than one executor

You can appoint more than one executor and they can act together as co-executors. It’s important to appoint an alternate executor, who can take over if the first executor can no longer act.

If you have a complex estate or investments or need someone to take over the operation of a company, consider naming 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.

If you have minor children, appoint a guardian for them in your will

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.

The guardian’s role

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.

Create a trust for a minor child’s interest

Make sure your will is written so that a child under 19 won’t have direct access to their share until they’re 19 or beyond. 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 to be held in trust for the minor until they’re 19 years old. It’s best to speak to a lawyer about drafting a trust.

You can minimize legal fees by preparing well

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

  • 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.

Filing 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 court probate process to ensure the court has the last will.

You should review your will to make sure it still reflects your wishes

It’s good to review your will every three to five years to ensure that it still reflects your current wishes. 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 prepared 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 become adults. And you may want your adult children or a sibling to be executor instead.

Review your will after any change in your marital status

If you married before March 31, 2014 (when a new wills and estates law came into effect), any will made before marriage was automatically cancelled when you married, unless the will said it was made in contemplation of your marriage. After March 31, 2014, a marriage does not revoke — that is, cancel — a will.

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),
  • before you die, an event occurs that causes an interest in family property to arise (under the Family Law Act), or
  • in the case of a marriage-like relationship, one or both of you end the relationship before you die.

After you pass away

Your will can be changed after you die

If your will doesn’t properly provide for your spouse or children (including illegitimate and adopted children), they can request to have your will changed by a court. This is called a wills variation claim. Our information on challenging a will (no. 179) explains this in more detail.

A spouse includes both a married spouse and a person you have lived in a marriage-like relationship with for two years before your death.

The law is 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.

If you have a disabled adult child, and do not leave enough for them, the court may order that they receive more from your estate. A lawyer can help draft an appropriately worded trust for a disabled adult child.

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 (no. 178) explain the process. In applying for probate, 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
  • over $25,000 — basic fee of $208
  • between $25,000 and $50,000 — basic fee of $208 plus $6 per $1,000 ($358 for the first $50,000)
  • over $50,000 — $358 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 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.

The probate registry of the BC 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. A lawyer can help with that planning.

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 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 (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?

Keep the original will 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. 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 a will cost?

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 quotes. You can 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.

Get help

With preparing a will

A notary public can help you prepare a will. The Society of Notaries Public of BC offers a list of notaries in the province.

Telephone: 604-681-4516 in the Lower Mainland
Toll-free: 1-800-663-0343
Web: notaries.bc.ca

MyLawBC is an online resource from Legal Services Society, the agency that provides legal aid in BC. MyLawBC steers you in preparing a simple will through a set of questions. It also gives information on wills and personal planning documents such as powers of attorney and representation agreements.

Web: mylawbc.com/paths/wills

Access Pro Bono offers an in-person clinic in Vancouver staffed by volunteer lawyers to help low-income seniors (ages 55+) and people with terminal illnesses prepare a will.

Telephone: 604-424-9600
Web: accessprobono.ca/willsclinic

More information

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

Web: nidus.ca


[updated October 2018]

The above was last reviewed for legal accuracy by Hugh McLellan, McLellan Herbert.



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