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Dying Without A Will

A Will is something that most Canadians think about but just never get around to making. Most people think it is too time consuming. In reality, you will spend around an hour meeting with the lawyer who will gather the information necessary to make your Will. The lawyer will then draft your Will have you review it and then schedule for you to sign your Will. Depending upon the situation it generally takes less than three hours of your time to plan a Will, have a lawyer draft the Will and have the Will signed and witnessed.

More importantly, the consequences of dying without a Will can be devastating to your family. Not only does it place a considerable amount of strain on your family and friends to order to deal with your estate, it also will impact the division of your estate, the guardianship of your children, and the cost of administering the estate.

In BC, if you die without a Will your estate will be distributed according to the Wills Estate and Succession Act (WESA):

1. If you have a spouse and no descendants your spouse will receive the entire estate.

2. If you have a spouse and descendants, your spouse will receive the household furnishings and a preferential share of the estate.

The amount of the preferential share will depend upon whether all of your descendants are both you and your spouse’s descendants, or whether you have descendants with people other than your spouse:

  • If all of your children are descendants of both you and your spouse, your spouse will receive the first $300,000 of your estate.
  • If all of your children are not descendants of both you and your spouse, then your spouse will receive the first $150,000.

If the value of your estate is less than the value of the preferential share all of the assets will pass to your spouse. If your estate is greater than the preferential share then the remaining amount will be divided 50% to your spouse and 50% to your descendants.

Spouse’s Preferential Share: an Example

Scenario 1

John is married to June. John and June have three children together. John has no other children. Sadly, John passes away without a Will. At the time of his death, John had an estate worth $400,000 after all the bills are paid. John’s estate will be distributed as follows:

June will receive the $300,000 preferential share (all of John's kids were with June) plus $50,000.00 being her share of the remaining estate. The total payable to June will be $350,000.

Each of John's children will receive $16,666.67 being their 1/3 equal share of the other 50% of the remaining estate (after the payment of the preferential share to their mother).

Scenario 2

However, if John had four children, three with June and a child (Gary) from a previous relationship the distribution changes significantly. Instead of $350,000.00 June will receive $275,000.00 ($150,000 because Garry is not descendant from June and $125,000.00 being her share of the remaining estate) and the children will each receive $31,250.00 being their 1/4 equal share of other 50% of the remaining estate.

It is also important to mention that if June passes away without a Will Gary will receive nothing from June’s estate because he is not one of her children. Even worse if June makes a Will but decides not leave anything to Gary, Gary will have no right to contest the terms of June’s will (this is a topic for another time). Therefore Gary would receive substantially less than the other children.

3. If you pass away and do not have a spouse then there is a priority to the distribution of your estate. If you have descendants your estate will be divided equally between them. If you do not have descendants then your estate will be divided equally amongst your surviving parents. If there are no descendants or parents surviving you then your estate is divided equally between your parent’s children. After that there are several others more distant relations which could inherit your estate but at a certain point if there is no one surviving you your estate will pass to the government.

Now if that doesn’t convince you to make a Will there are still several factors which should impact your decision. Such as what happens if your children are minors? Who receives the minors share? Who is the guardian of your children? Who will manage your estate? Will your spouse have enough money to live if your estate is divided as shown above? Are there fees that can be avoided if you draft a Will? There are too many questions and too little space in this article to answer them all. That being said I will try address some of the factors when your children are minors.

If your child is a minor, the Public Guardian and Trustee (PGT) will hold that child share of the estate in trust. The guardian of your children would need to apply to the PGT for any money needed for your children, such as living expenses and education. It is up to the discretion of the PGT to determine whether they will grant a request from the guardian. Depending on the financial situation of your guardian this can be a serious hardship. In contrast, if you have a Will you can instruct your executor, at their discretion, to use a child’s share to benefit that child.

Another concern if you have no Will is once your child reaches the age of 19 they can demand all of their money. The PGT will not consider how much money they are transferring or whether your child is fiscally responsible or not. Your 19 year old child could become a millionaire overnight. In contrast, if you have a Will you can instruct your executor to hold that money in trust until a certain age. You could also instruct your executor to distribute portions of the child’s share at different times, for example you could instruct the executor to distribute ¼ of the child’s share at 22 and the remainder at 25.

This article barely scratches the surface of the issues that occur when a person dies without a Will. I hope that it has motivated you to speak to a lawyer and get your Will drafted. There are always creative solutions or remedies which may be available to you, depending on your situation.


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Brett A. Squair

Brett A. Squair

Associate

Brett is a member of the British Columbia Cattlemen’s Association, Director of the North Okanagan Livestock Association (NOLA), Vice President of the Vernon and District Immigrant Services Society, and a Director for the Sky Volleyball Club, which is the largest volleyball club in British Columbia.

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