For some reason, the administration of estates in British Columbia has escaped all the plain language police and remains a very entrenched bastion of archaism, as anybody who has tried to probate an estate will know. Procedure evens differs from Supreme Court registry to registry! Regretably, this means you'd be foolish to try to run the estate application through the Court by yourself unless you are independently wealthy or a member of Mensa; preferably both. It does not have to be this way but it is so unless the estate is small, I can only advise strongly that you seek the assistance of a lawyer. Lloyd Duhaime.
In law, the term personal representative includes executors (where a will names an executor) and administrators (where a person dies intestate, or an executor declines, and the court must name someone to administer the estate).
The office of personal representative is voluntary. Even if you are named in a will as executor, you can decline (called "renonciation").
There is quite a bit of work involved although the personal representative is remunerated up to 5% of the value of the estate (as a trustee; see "The Trustee" under Canadian Trust Law: The Players). The personal representative can also be indemnified out of the estate for expenses. If the executor is also a beneficiary, he or she may be denied a fee unless the will makes it clear that the gift to the executor is given in addition to, and not instead of, the executor's fee.
A personal representative has to take possession of the assets, pay the debts, look after insurance matters and keep proper accounts. Another important point about the personal representative is that they stand as way station between the deceased and the beneficiary. As such, and legally, title to property goes from the deceased to the personal representative (as trustee for the beneficiaries) and then to the beneficiaries. Note that there are some exceptions to this such as joint property and RRSPs or insurance policies with named beneficiaries. Property in these are transferred automatically on death and do not depend on probate.
Once everything has been gathered, the executor is ready to apply to the court for probate.
Probate is the Court document which proves the will as the actual last will of the deceased, and confirms you as the executor. If the estate is intestate, then rather than probate (which is reserved for wills), the court will issue letters of administration to an administrator. If a will does not name an executor, if the executor predeceases the testator, or if the named executor declines the position, someone will have to apply to the court as administrator to handle all probate issues.
Probate or application for letters of administration are a rather complex matter. It should not be attempted without the assistance of a lawyer unless the estate is quite simple (the Self-Counsel PRESS of North Vancouver have several good titles on the topic). If you retain a lawyer, a common fee is 2% of the value of the estate or 1% if the estate is worth more than $100,000. Last time we checked (May 2001), there were no official government forms available for probate, unfortunately.
The first matter of business, for an executor, will be to make funeral arrangements. This occurs before the application for probate; at least, we advise that it does!!! For these expenses, the personal representative is personally liable under the Cemetery and Funeral Services Act but he or she will eventually be able to reimbursed from the estate.
As soon as possible, the personal representative moves towards the application for probate, collecting all the documents. Probate requires a series of forms and documents. Much of the procedure is governed not by the Estates Administration Act but by the Rules of the Supreme Court.
For example, where an estate is intestate and a person is applying to be appointed administrator, Rule 61(2) says that the names and kinship of those having a prior right or an equal right to a grant shall be shown and that each of them has consented or renounced, otherwise the registrar may direct notice to any of them by mail.
In essence, an application for probate or letters of administration of an estate requires:
- A praecipe;
- A certificate that a search has been made with the Wills Registry in Victoria (registration of a will at this registry is not mandatory);
- An affidavit of the executor including, as an attachment, an original of the will. This affidavit will swear that all reasonable efforts have been made to ascertain that the attached is the last will of the deceased;
- The Estates Administration Act requires a declaration that the applicant "has made a diligent search ... to ascertain the assets and liabilities" and also lists those assets and liabilities at the time of the application for probate or administration.
- The Estates Administration Act also requires the applicant to certify that he has first delivered notice of the application to each person who is:
- a beneficiary under the will,
- entitled to intestacy,
- entitled to apply under the Wills Variation Act,
- a common law spouse
- a spouse that has been separated from the deceased for less than a year.
- Where a person has died intestate, the application is for letters of administration. Some of the above may not be required in administration applications and other documents may be. For example, it may be necessary to document the consent of all other persons who could have applied for letters of administration. Administrators may also be required to post a bond.
In some instances, additional forms are required, such as where a beneficiary dies after the deceased but before probate, or where there appears to be a problem with the form of the will. Where a dispute arises over the validity of the will, the will may have to be subjected to "proof in solemn form" which means a hearing before a judge on the sole matter of the alleged technical problem with the proposed will.
Probate fees are also required. In BC, check with the Supreme Court nearest to your residence for the latest rates.
The probate or administration application then goes to the court. In some case, the Registrar will deal with the matter without any hearing. In other cases or registries, a hearing may be convened (rare if the application is done properly). The date of probate is important as it is from that date that the 6-month limitation begins to run for common law spouse applications and applications of dependent spouses or children under the Wills Variation Act (see Wills in BC). Because of these time limitations, personal representatives are not allowed to transfer any part of the estate to beneficiaries until the end of the 6-month period (Wills Variation Act).
An executor is allowed one year to collect the assets and settle the estate (called the Executor's Year). There is lots to do. Credit cards have to be canceled. Mail has to be redirected. Debts have to be paid and collected. Income tax forms have to be completed. A clearance certificate from Revenue Canada is required certifying that all taxes have been paid. If the personal representative starts distribution before receiving the clearance certificate, he (or she) could be personally liable for the unpaid taxes.
Other critical matters escape summary in a short article such as this. In particular, administrators will want to beware the Estates Administration Act which prohibits the distribution of the "surplus of the personal estate of an intestate" until a year has elapsed since death. Legal experts disagree on what "surplus of the personal estate" means. An administrator would be wise to consult a lawyer on this section of the law. Another difficulty surrounds cash or property advances to children followed by a similar gift in the will. For some unknown reason, the law tends to presume that the testator did not intend to double the gift. Again, this is a problem area of the law so consult a lawyer if such a situation arrives.
Once probate or letters of administration have been granted, as the case might be, the real fun begins for the personal representative. They are subject to several legal procedures for breach of their duties, including breach of trust or personal liability to creditors or beneficiaries if they do not show due diligence in their administration of the estate. Lawyers refer to mismanagement of a personal representative as devastavit, Latin for "he who has wasted." And yet the law of BC has provided for courts to step in and relieve a personal representative where they have acted honestly and reasonably and ought to be excused from liability (see remarks under "The Trustee" in Canadian Trust Law: The Players).
The Trustee Act allows the personal representative to search for creditors by placing an ad in the local newspaper. The Trustee Act also forms the statutory basis for the duty to account, for which the personal representative must always be ready by keeping proper records. Within two years from the grant of probate or letters of administration, the personal representative must send the account to all interested parties.