WILLS, ESTATES AND SUCCESSION ACT

Emma A. McArthur

Estate Planning Council of Abbotsford May 16, 2012

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Wills, Estates and Succession Act (“WESA”)

• Introduced September 14, 2009

• Received Royal Assent October 29, 2009

• Expected to be proclaimed in force spring 2013

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Effect?

• Will repeal and consolidate 4 significant statutes and amend many others

• Accompanied by new and amended Supreme Court Civil Rules

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Background:

• 1980’s – Law Reform Commission of BC publishes a series of reports and recommendations

• 2003 – B.C. Law Institute and AG initiate the Succession Law Reform Project to modernize law

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Continued ...

• 5 subcommittees established involving practising lawyers, academics, court officials, AG representatives and a notary representative

• Consolidated 350 page report issued, including draft legislation

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Highlights - some of the significant changes

1. Definitions

• “Testator” and “testatrix” replaced with “will-maker”

• “Descendants”, not “issue”

• New concept – “nominee”

• No grants of probate

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2. New minimum age to make a valid Will:• 16

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3. New minimum age to make a valid Will:• 16

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4.Revocation of Wills:• Automatic revocation of Wills

by a subsequent marriage of will-maker is abolished

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5. Definition of “Spouse”

• Marriages & marriage-like relationships of at least 2 years

• Includes opposite and same-sex relationships

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6. Specifies when persons will cease to be considered spouses:

Married?

• When they’ve lived separate and apart for at least 2 years and one or both have intention to live separate and apart permanently, or

• A triggering event occurs under part 5 of the Family Relations Act (i.e. separation agreement, declaration of no reasonable prospect of reconciliation, dissolution, nullity)

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Common law?

＞When one or both persons terminate the relationship

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7. Spousal share of an intestate estate:• No descendants? Spouse takes all

• Descendants? Spouse receives:

＞ household furnishings

＞ spousal preferential share

＞ life estate in spousal home is eliminated and replaced with an option to purchase it

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8. Calculation of Spousal Preferential Share

• If all descendants of deceased are also descendants of spouse: $300,000

• If not? $150,000

• Balance of estate: 50% to spouse and 50% to descendants

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9. Parentelic Distribution Scheme Adopted• No spouse, descendant, parent or

descendant of a parent?

• Estate is divided between maternal and paternal grandparents or their descendants

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10.New Survivorship Rules

• If a person does not survive a deceased person by 5 days, that person is deemed to have died before the deceased person

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11.Simultaneous death?

• Presumption that younger person survived older person is abolished

• Each person is considered to have survived the other

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12.Court Power to Cure Deficiencies

• Includes deficiencies in execution formalities

• But court may also give testamentary effect to any “record, document, writing or marking on a Will”

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Continued ...

• “Record” is broadly defined - includes electronic data that can be read and reproduced

• Test is whether it reflects the testamentary intentions of the deceased

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13.Expanded Court Power to Rectify Wills

• To correct accidental errors and misunderstandings and failure by the Will drafter to carry out the will-maker’s instructions

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14.Secured Debt Passes with Gifted Property/Assets

• Property or asset is gifted to a beneficiary and is subject to a mortgage or purchase money security interest?

• Beneficiary takes the gift subject to that debt

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15.Administration of Small Estates

Will probably be defined to mean:

＞$50,000 and no interest in land

＞Applies to testate and intestate estates

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Continued ...

＞Procedure not yet clear

＞Likely that an applicant who falls within a specified class will give necessary notice(s) and file a small estate declaration with court and will then become the deceased’s personal representative

＞No court order and no security required

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16.Security Where Administration is Sought• Now – presumption is that security must be posted by

administrator

• WESA – security only required where

(i) minor is involved or

(ii) mentally incapable person without “nominee” involved or

(iii) court requires security on application by an interested person

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17.Beneficiary Designations

• Now – statutory provisions governing beneficiary designations for insurance are different from those applicable to RRSPs, RRIFs and other benefit plans

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Continued ...

• WESA makes the provisions applicable to RRSPs, RRIFs and other benefit plans the same

• Will be able to appoint a trustee of an RRSP, RRIF or other benefit plan

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Continued ...

• “Nominee” will be able to make a designation consistent with a prior designation of beneficiary made by the owner of the plan if the plan is renewed, replaced or converted

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18.Common Law Presumptions Abolishedi.e. ＞Gift to child is an advance of that child’s

inheritance

＞Legacy in Will is revoked if will-maker made a gift during his/her life of the same amount to that beneficiary

＞Debt owed by will-maker is satisfied by a legacy equal to or greater than the debt (under WESA, debt continues to be enforceable against the estate)

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19.What Hasn’t Changed?

• Wills Variation Act substantially the same despite significant changes recommended

• Some minor procedural changes relating to notice requirements