HOW A WILL WORKS

• A will is the key to the will-maker’s estate plan
• A will names the person who will take charge of the estate after the will-maker’s death, and it sets out a plan for distributing the will-maker’s assets
• Properly drafted, a will meets the will-maker’s goals in a cost-effective manner, maximizing the advantages to the beneficiaries while minimizing the estate’s expenses

Essentially, making a will allows you to

• Appoint a guardian for minor children;
• Appoint an executor to manage your affairs after your death;
• Choose family, friends, charities, etc. to receive your assets;
• Ensure your children receive their legacies at the age and in the way that you intend; and
• Minimize taxes payable following your death.

VALIDITY OF WILLS

Under the Wills, Estates and Succession Act, a will must meet certain formal criteria to be valid:

• It must be in writing and dated;
• It must be signed at end by the will-maker in the presence of two witnesses, who are aged 19 or older and who sign in the presence of each other; and
• The will-maker must be at least 16 years old.

For a will to be valid, the will-maker must have the mental capacity and intention to make a will. Mental capacity includes being free of any mental disorder and appreciating the nature and conditions of the gifts in the will. The will-maker must exercise genuine free choice and not be unduly influenced by any person in making a gift.

If there is a dispute about whether a particular document is a valid will, or whether the testator was under any undue influence in making a gift, the matter is decided by the Supreme Court of British Columbia.

REVISING YOUR WILL

You should consult a lawyer to consider revising your will if there is a significant change in your life or your estate plan:

• birth or adoption of a child, or estrangement from a child,
• death of a child or spouse,
• marriage or marriage breakdown,
• changing the named guardian for your children,
• changing the named executor and/or trustee,
• changing the asset distribution in your will, or
• legal changes in tax or estate laws.

Difficulties can arise if a will makes a gift to a spouse, or names a spouse as an executor, but the relationship ends before the will-maker’s death. A gift to a spouse is presumed to be invalid if the spousal relationship had ended before the will-maker’s death, unless the will makes it clear that the gift should be given despite the breakdown of the relationship.

REVOKING YOUR WILL

When you write a new will you should expressly revoke any prior wills, to avoid confusion as to your intention. You can also revoke a will by destroying it, or by directing someone else to destroy it in your presence.

CONSEQUENCES OF DYING WITHOUT A WILL

When a person dies in BC without a will, that person is said to have died intestate. Where a person has died leaving a will that does not dispose of the entire estate, the will-maker is said to have died partially intestate. Sometimes a will names a person to receive a gift, but that beneficiary dies before the will-maker. In all these cases the estate must follow the rules of intestate succession.

The rules of intestate succession identify which relative is the beneficiary where there is no will, or where the will fails to dispose of a particular asset:

Where a person dies without intestate successors, the intestate’s property escheats to the provincial Crown. “Escheat” is from the old French “eschete”, which meant “that which falls to one”; all property (including bank accounts) falls to the provincial Crown if it appears certain that there are no heirs, descendants or named beneficiaries to take the property.

PROPERTY AFFECTED BY A WILL/INTESTACY

Only property which forms part of the deceased’s estate will be distributed under the terms of the will or under the scheme of intestate succession.

Property included in a will is said to “pass” by the will. It could include a range of assets the will-maker controlled or owned an interest in:

• • personal effects (furniture, artwork, jewellery and cars),
  • securities (investments, bank accounts), or
  • real estate interests.

PROPERTY NOT AFFECTED BY A WILL/INTESTACY

The deceased might have property that does not “pass” by a will or is not subject to the scheme of intestate distribution, and does not form part of the deceased’s estate upon death. Such property would be distributed according to other laws:

• Proceeds of a life insurance contract pass to the beneficiary designated under that contract;
• A refund of premiums contributed to an RRSP, RRIF or pension plan pass to the beneficiary designated under that plan;
• Property subject to contractual obligations (such as a marriage agreement, separation agreement, or shareholder’s buy-sell agreement) that restrict the deceased’s rights to sell it pass under the terms of that contract;
• Property subject to the Family Law Act, may pass to the surviving spouse directly;
• Funds held jointly, such as joint bank accounts, may pass to the joint account holder;* and
• Property held in joint tenancy may pass to the surviving joint tenant by operation of the right of survivorship, depending on the facts at hand.*

*Note that an adult child of a deceased who holds assets jointly with the deceased cannot rely on a presumption that the deceased wanted the child to take the asset at death. In some cases the facts might suggest a trust was created instead of joint ownership. In the case of trusts, it is important to seek legal advice.