What Are The Implications of Dying Without a Will?

I recently received a letter from a reader asking what the consequences are of dying without a will? Surprising, just 55 per cent of British Columbians have a signed, legally valid and up-to-date will.

BC’s new Wills, Estates and Succession Act (“WESA”) dictates how your estate will be divided if you die without a will. It sets out the following rules:

If you have a spouse and no children, your estate passes to your spouse.

It’s interesting to consider that under WESA, it’s possible to have more than one spouse at the time of your death.  The definition of “spouse” includes a person who has lived with you for at least two years in a marriage-like relationship immediately before your death.  If you are still married but separated and living in a new common law relationship with someone else, you may have two spouses if you die without a will.  If this is the case, WESA sets out that both spouses share the spouse’s share of the estate equally.

If you have a spouse and children, then what passes depends on whether your children are also your spouse’s children. If so, your spouse gets the first $300,000 value of your estate. If not, your spouse gets the first $150,000 value of your estate. Then one half of the balance of your estate goes to your spouse. The other half is divided among your children. Your spouse has the right to acquire the family home from your estate as part of his or her share.

If you have no spouse, then your estate is divided among your children equally.

If you have no spouse and no children, then your estate goes to your parents. If your parents aren’t alive, it goes to your brothers and sisters, divided among them equally.

If you die without a will, someone must be appointed by the court to manage your estate. This person is called an administrator. In a will, you can name an executor to manage your estate when you die. The executor is often a relative, friend or other trusted person.

Your spouse is the first person who can apply to the Court to be the administrator. If you have no spouse or if your spouse is unwilling or unable to be the administrator, then a relative can apply. If there are no relatives willing or able to do this, then any other eligible person could apply to be the administrator. This may include a friend of yours, or a professional such as a lawyer or accountant. The Public Guardian and Trustee (“PGT”), as the official administrator for the province, might also apply to administer your estate.

However, if you have debts when you die, the person who applies to be the administrator must get your creditors to agree to the application. Also, the person who applies may have to get the agreement from other people who could be appointed administrator. In addition, the friend or professional may have to deposit money with the court (called a bond), as a way to ensure they do the work honestly and competently.

Without a will, the court will also appoint a guardian if you have children under 19 and the other parent isn’t alive.   In a will, you can name a guardian to look after any infant children.

The Public Guardian and Trustee also becomes the trustee and holds any share left to a child (under the age of 19 years).  This child’s shares of the estate will be held in trust by the PGT for them until they’re 19 years old. The child’s guardian would have to apply to the PGT for any money needed for things like living expenses or education. This can be a hardship if the child is quite young and the parent or guardian needs the money for day-to-day expenses. When the child turns 19, the child can demand all of their money no matter how much it is, regardless of their maturity or financial responsibility. By contrast, if you have a will, you appoint the executor and trustee for the share going to a child under 19, and you can direct that the share be used for the child’s benefit, including support and higher education, without government involvement.  You can also direct how much and at what ages the share is paid to the child.

What Does This Mean?

What’s clear is that by not having 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 of your choice for any young children you have.   In addition, the costs to administer your estate will be drastically increased.   Intestate estates often take longer to probate as well, which means that cash flow can often become a problem during this process for your personal and business affairs.  Also, beneficiaries may have to wait to receive their gifts.

It makes a lot more sense to spend a few hours with a lawyer planning your estate to ensure your wishes are carried out and your business assets are protected to save your spouse, children and other beneficiaries and your business much time, effort and money.

The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional.

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