DYING WITHOUT A WILL

So, do you really need a will? If you die without a will provincial legislation sets up a scheme for administration and distribution of your estate. If there is a will, then the executor under the will may act immediately upon death. Probate simply confirms the appointment of the executor under the will. Without a will, and before the appointment of an administrator by a court no one is empowered to deal with the affairs of the deceased's estate. As it can take weeks or months to appoint an administrator, the delay can be a serious problem if, for example, a business needs to be run on a continuous basis. A spouse or close relative will usually apply to become the administrator of the estate. It is possible that there could be a contest between potential administrators as to who would be appointed. Your estate may end up with an administrator that you would have never appointed yourself.

Additional problems with the appointment of an administrator are that unless all beneficiaries and creditors are within British Columbia and consent to the appointment the court may require a bond. When there are minor beneficiaries a bond will be required. A bond is insurance that the administrator will properly administer the estate and not defraud the beneficiaries. Potential administrators must be bondable and there is a cost to this too. If no one will act as an administrator of an estate there is a public official called an Official Administrator who administers estates for a fee.

Once appointed by a court the administrator acts in a capacity similar to an executor under a will. Similar tasks are conducted such as paying debts, funeral expenses, taxes and liquidation of assets.

When it comes time to distribute the estate the estate is distributed under a legislative scheme. For example, if you have a spouse and no children or other issue then the entire estate would go to your spouse. "Spouse" would include common-law spouses who meet the definition of "spouse" which is cohabitation with another person in a marriage-like relationship (including the same gender) for a period of at least two years immediately before the person's death. If spouses have been separated for greater than one year then they are not deemed to be spouses for the purposes of the Estate Administration Act. You should be aware that there still may be significant legal issues as to whether someone is a "common-law spouse", whether somebody is a separated spouse, or whether a former spouse has acquired property rights through other legal mechanisms. Legislation even contemplates there being more than one spouse. In these cases, hopefully rare, a judge would decide who gets what.

If there is a spouse and children, the spouse gets the first $65,000.00 and "household furnishings" and an estate for life in the spousal home and a portion of the residue depending upon the number of children. Children would receive the balance of the estate. This is not normally a desirable result as the surviving spouse will probably be unable to remortgage the family home, especially if there are minor children. To avoid this a spouse with property solely in his or her name should always have a will.

If there are children but no spouse the estate will be divided equally among children.

If there are no children or other issue and no father or mother, the estate would be divided equally among brothers and sisters.

If there are only distant relatives then next-of-kin of equal degree of consanguinity (bloodline) would take. This is based upon a historical chart that has been in existence for hundreds of years. When the closest next-of-kin are siblings then a child of a deceased sibling would take their parents share. But in the cases where there are only nieces and nephews a child of a deceased nephew or niece would not take a parent's share.

Couples who have property in joint tenancy and no wills need to consider that if they die in a common accident the youngest is deemed to have died second if it cannot be determined who died in what order. The second to die receives the property and it is then passed to their next-of -kin. If there is a second marriage with both spouses having their own children then one set of children will get nothing as step-children are not considered to be children under the legislation.

Another significant issue for parents with minor children is that if you die without a will you have not appointed a guardian. There could be a contest between potential guardians. As with the administrator you could end up with someone being the guardian of your children that you would never have appointed.

Dying without a will is not likely to affect income taxes or probate fees. The only time the provincial government would actually take the assets of a person who dies without a will is when no next-of -kin can be found. Even in these situations, people with a legal or moral claim may make an application to have the money paid to them.

So, you might not need a will if your requirements are the same as the government scheme. This will be a rare situation and legal advice would still be suggested. Reliance on the Estate Administration Act may well be preferable to having a poorly drawn do-it-yourself will. Just remember that proper estate planning always results in a smoother and more cost effective transition for your heirs.