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Administering Small Estates |
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In British Columbia, when someone dies leaving an estate, his or her executor may need to apply to court for a grant of probate of the will. If the deceased person did not leave a will, usually the spouse or next of kin will apply to court to be appointed administrator to manage the estate and distribute it to the deceased's heirs. This is called a grant of letters of administration. Without probate, or letters of administration, it may be difficult to deal with the deceased's assets.
In the case of small estates, the probate process can be cumbersome and expensive relative to the value of the assets involved. Although there are no probate fees payable for estates with a gross value of less than $25,000, the process for applying for a grant of probate or to be appointed an administrator is as cumbersome for small estates as for large estates.
In some cases, it may not be necessary to obtain a grant of probate or administration to deal with the estate assets. For examples:
1. Section 18 of the Motor Vehicle Act allows the executor to transfer the deceased's motor vehicle without probate if the total value of the estate is less than $25,000, the executor produces a copy of the will, and the beneficiary under the will consents. If there is no will, and the total value of the estate is less than $25,000, you can transfer a motor vehicle with the consent of all of those entitled to a share of the estate.
2. When someone dies with a will, and the total value of the estate is less than $25,000, the Manufactured Home Registry may allow the executor to transfer a manufactured home without probate.
3. Banks and other financial institutions sometimes allow an executor to deal with the deceased's accounts without probate, particularly if the estate and bank accounts are small. Usually, the financial institution will require a copy of the will, an affidavit of the executor, consents from all of the beneficiaries, and an agreement that the executor and beneficiaries will indemnify the financial institution against any claims as a consequence of the financial institution allowing funds to be released without probate. If there is no will, some financial institutions will also release funds to a spouse or next of kin entitled to inherit the deceased's assets. Each financial institution has its own policies, and requirements, which may vary from branch to branch.
Recently a subcommittee of the Succession Law Reform Project, under the auspices of the British Columbia Law Institute, has published a report suggesting a streamlined procedure for estates under $50,000. Under the subcommittee's proposal, an executor, or someone who wishes to administer the estate, would be able to complete and file in court a declaration setting out information about the estate, including the names of the beneficiaries and a description of the assets. The will, if there is one, and a death certificate would also have to be filed with the declaration. Once the requirements are met, including certain notice requirements, the person making the declaration would be able to administer the estate without a formal grant of probate or letters of administration. Although this process would still involve the court, it would be a simpler, less expensive process.
By Stanley Rule of the law firm Tinker, Churchill, Rule. You can read his weblog "Rule of Law" at http://rulelaw.blogspot.com |
