emma mcarthur - new wills and estates act
DESCRIPTION
Emma McArthur - New Wills and Estates ActTRANSCRIPT
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