Please read the disclaimer before perusing the following article.
(written 1991 published Beef in B.C. Nov/Dec 91, ammended 2002)
The following article will provide some information about wills. A subsequent article will discuss the ways that wills can be challenged or varied.
Wills are governed by provincial law. In British Columbia, a will must be written and signed by the person making it (called “the testator” in legalese). There must be two witnesses present when the testator signs and who sign in the presence of the testator and the other witness. If a witness is a person to whom a gift is given in the will, or a spouse of a person to whom a gift is given, then the gift to that person is void. The rest of the provisions of the will are valid. If the will is not signed according to these rules, it will be invalid.
Many people have heard of a holograph will, one which is entirely in the handwriting of the testator and is not witnessed. A holograph will is NOT valid in British Columbia.
The testator must have the necessary mental capacity to make a will. Interestingly enough, adequate mental capacity is less than perfect sanity. The test is whether or not the testator understands enough about the people to whom he or she owes a moral duty, and the nature and extent of his assets, to form a balanced judgment about the disposition of the testator’s property on his or her death. Someone who has “good days” and “bad days” in mental condition may be able to make a valid will on a good day. If there is any question about the person’s mental capacity to make a will, one or more medical opinions should be obtained.
A will will also be invalid if the testator was forced to make it (“duress”). There may be persons who have such a level of influence over the testator that he or she does not exercise his or her own free will in making the will (“undue influence”). In this case also, the will is invalid.
Marriage revokes a will unless the will is specifically made in contemplation of marriage. A final divorce order also revokes portions of the will. Any appointment of the former spouse as executor, and any gift to the former spouse are treated as though the former spouse had died immediately before the testator’s death.
Many people think that your property goes to the government if you die without a will. That is not so, unless you die without relatives. The government through its legislation, the Estate Administration Act of British Columbia, does govern how your property is distributed.
If you leave a spouse and children, the spouse receives a life estate in the family home; the household furnishings; the first $65,000 of estate value; and either half (if you leave one child) or a third (if you leave more than one child) of the remainder. The other half or two-thirds of the remainder is divided equally among the children.
If you leave a spouse and no children, the estate goes to your spouse. If you leave children and no spouse, the estate goes equally to your children. If you leave no spouse or children, it goes to grandchildren; if no grandchildren it goes to your parents, if no parents it goes to your brothers and sisters.
“Children” means your natural and legally adopted children.
A spouse from whom you have been separated for a year is excluded from benefit.
Step-children are not included unless you refer to them specifically in the will or legally adopt them.
The advantage of making a will is that you select the person(s) who are to administer your estate (executor). You also select the person(s) who will look after your children (guardian).
You also say how your property will be distributed. You may want all of your estate to go to your spouse on your death, rather than splitting it between your spouse and children. If you make a will, you decide what trust arrangements are put in place for the children. Your executor acts as trustee for the children’s trust fund. Although the executor must account to the Public Guardian and Trustee for the way he or she operates the children’s trusts, he or she has much more discretion about how money is spent for the children than would an administrator appointed under the Estate Administration Act, who must pay the share of any minor child to the Public Guardian and Trustee. Creditors are much easier to deal with under a will than under the Estate Administration Act.
Revocation. A will revokes any previous will, so that all of your decisions about your estate are recorded in a single place, the new will.
Executor. You appoint an executor and a replacement executor in case your first choice for executor is unable to act. The executors look after the administration of your estate when you die, and look after any trust for minor children. Each executor must be able to manage money conservatively, be financially responsible, and be able to keep accounts. The executor can also be a beneficiary.
The executor is entitled to a fee of up to 5% of the estate, plus expenses, for the executor’s time and trouble. In addition if there is a continuing trust, the executor is entitled to an annual care and management fee of 0.4% of the average market value of the assets which he or she is administering. Most family executors do not expect payment. Of course a professional executor such as a trust company will expect to be paid for the responsibility, and will not necessarily agree to limit its compensation to the 5% plus care and management fee.
Funeral Instructions. Some people want to have funeral instructions included in their wills. A better practice is to instruct your executor and family as to the desired arrangements. More often than not, funeral arrangements are made before the will is located, so instructions in the will may not be available at the appropriate time.
Administration Powers. The will ought also to include a variety of powers for the executor, so that he or she has full authority to manage your assets for the maximum benefit of your estate.
Guardian. If you have minor children, you should appoint a guardian in your will. The guardian is responsible for ensuring that the children are taken care of, but does not actually have to take care of the children himself or herself.
It is essential that the executor and guardian have similar views on raising children, and what is important for them during their formative years. The guardian is responsible for the children’s care and the executor hold the purse strings. If they disagree about what is important and must be funded by the estate, then your children will suffer.
Distribution. Finally there are the distribution provisions. Many people want to leave their estate entirely to the surviving spouse. If there is no surviving spouse, the estate goes equally among children at a certain age, minimum 19 years. Until the children come into their share, the executor holds the estate in trust and doles out what he or she thinks is appropriate to look after the children and educate them and keep them healthy.
If one child has died before your death, most people want the children of that child to receive the parent’s share. Alternatively, some people want the share of the predeceased child to be divided up among their other children.
You may also want to provide for a “common disaster” to cover a situation where neither spouse, children or grandchildren survive you.
Some wills also list specific personal items to go to individual people, “my diamond ring to my sister Jane”.
The original will should be put into your safety deposit box. Some lawyers agree to keep the original will in their vault. Keep a copy of the will at home. On your death the safety deposit box can be opened by the bank and the executor, the contents listed, and the will removed by the named executor.
When you make a will, you should make sure that a Wills Notice is filed with the Division of Vital Statistics. This notice gives no information about the contents of the will, but does identify you and the date and location of your will. These records must be searched before probate of your estate can be obtained.