Estate Administration in British Columbia: What to expect

When a person dies, the role of administering their estate is commenced by a person named as executor in the will of a person appointed by the court if there is no will.

Administering an estate can be a daunting task, made even more challenging because you are also grieving the loss of a loved one. With so many moving parts, it can feel difficult to navigate independently, but support is available.

Estate administration when there is a will

If you are named as executor in the deceased’s will, the first and most crucial step is to apply for a grant of probate, which is a process that verifies the validity of the will pursuant to the Wills Estates and Succession Act (the “Act”).

When you file for the grant of probate, you need to include an affidavit of assets and liabilities — also known as a form P10. It is the executor’s job before filing the grant of probate to gather all the information regarding the deceased’s assets (such as bank accounts, property, cars, etc.) as well as their liabilities (mortgages and outstanding loans or lines of credit, for example). Any assets and debts need to be recorded and sworn because the probate tax owed is based on that amount.

Once the application for the grant of probate is filed along with the affidavit of assets and liabilities, the court will review it. In Victoria, this can take between three to six months.

Assuming everything goes smoothly, you would pay the probate tax on the value of the assets minus the liabilities. Once that tax is paid, the court will issue the grant, and the executor can transfer all the assets into their name to disperse them following the will.

If a property is to be sold, for example, it would be transferred into the executor’s name from the deceased’s estate, and they have the authority to sign any documents concerning the sale. For bank accounts and registered plans with no beneficiaries, the executor would provide a copy of the will and the grant of probate to the financial institutions to have the funds transferred into the estate’s account.

It is important to note that once you have received the grant of probate, you must wait 180 days before you sell anything unless you have the beneficiaries’ consent. In my experience, people like receiving their portion as quickly as possible and typically give consent immediately.

Preparation of final taxes

Once all the assets have been sold and liquidated and all the money is pooled, the executor should hire an accountant to prepare the final taxes. Keep in mind that assets are valued at the time of death, not the time that they are sold. The accountant files the tax returns and advises what the anticipated tax liability will be. You may want to save some money for additional legal and accounting fees, but at this point, the executor is free to do an interim distribution to all of the beneficiaries of the funds that are held in trust.

There is then an average six-month wait to get a clearance certificate from the Canada Revenue Agency, which confirms that an estate of a deceased person has paid all amounts of tax, interest and penalties it owed at the time the certificate was issued. At this point, the executor can disperse the remainder of the estate to the beneficiaries following the will.

If you are the executor of a simple will, you may be able to handle it yourself. That said, court documents can be quite complex for someone who has never administered an estate. Often, a person thinks they can do it on their own, but once there’s a hiccup — for example, the court comes back and says the executor made an error — they typically get flustered and seek legal advice to help them through the process.

Rather than trying to figure it out on your own, speak with an experienced estate administration lawyer at the outset. They know what questions to ask the executor — things they might not have turned their mind to — and compile and organize all the information upfront, so it becomes easy to go through all the steps.

For example, suppose you don’t have all the information for the affidavit of assets and liabilities and become aware of new info after filing. In that case, you will have to file a supplementary affidavit to replace the erroneous one. That is going to waste time and money, so it is crucial to take your time and gather all the information before applying for the grant.

Assuming the will is valid, this process is usually straightforward. Things can get more complicated if the deceased has a business that is continuing to operate, for example. Still, the administration process is relatively simple if they have a spouse, children and property.

That said, this process highlights the importance of making sure that you have a valid will. When I’m preparing wills for my clients, I ask them to provide a list of everything they have — banking information, retirement accounts, property, debts, etc. — and I insert that list into the will file, which will save a substantial amount of time for the executor.

Estate administration when there is no will

When a loved one dies without a will, the process is similar in that you must file for a grant of administration and gather all the assets and liabilities.

However, concerns may arise about who the administrator and beneficiaries are. Without a will, it can be difficult to answer those questions. For example, two siblings want to be the executor and fight over it. Without direction from the deceased in the form of a will, the siblings must manage this conflict before the administration can move forward. They must apply to the court to get an order if they can’t agree. The litigation cost comes from the estate, so this process can cause headaches and unnecessary expenses for your loved ones.

Administering an estate without a will can also be problematic for beneficiaries. Perhaps the deceased has an ex-spouse who claims they have something in writing that they were going to inherit the house, for example. The deceased’s children might claim they were told they would get the house. If there are disputes, it can take years to get to the point where you receive the grant of administration and are free to proceed in the ordinary course.

In general, the process follows the grant of probate and the grant of administration. However, getting to that point without a will is generally more costly, time-consuming and requires extra paperwork.

For example, if someone dies and you do not know their beneficiaries, you must post advertisements in local newspapers to try and locate them. The courts have been clear that the administrator or executor needs to put forth their best efforts to find beneficiaries. So again, each extra step takes time and draws money away from the estate.

This is a great reminder to get a will done so that your loved ones do not have to go through the grant of administration process because it can be a nightmare if your estate is not organized, and your family members are not on the same page.

*This post is not intended to be legal advice and should not be taken as such. Please contact McConnan Bion O’Connor & Peterson if you have any questions regarding this post or require assistance or legal advice regarding Estate Administration.