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Having a will gives you control over where your assets will go after you pass away. If you have young children, a will also lets you appoint a guardian for them. Without a will, the court has authority to appoint a guardian and your assets will be distributed as per the intestate estate provisions according to the law. These conditions may not match your wishes and can elevate the complications and costs of settling your estate.
The executor is the person who will handle the distribution of your estate. Upon your death, your estate will be delivered to your named executor to be held in trust. In simple terms, your executor will pay off your debts and deliver what remains to the beneficiaries as named in your will. You should appoint someone you trust to capably and responsibly act as your executor. An executor does not have to be your spouse or related to you.
If you have young children (under the age of 19), it is extremely important that you appoint a guardian in your will. By doing this, you will be able to appoint a person or persons of your choosing to care for your children in the event that both parents pass away, as opposed to leaving that decision to the court system and the Public Guardian and Trustee.
Any assets which you hold in your name and of which you are the beneficial and legal owner will fall under your estate. There are things that do not fall into the estate, such as assets that are held jointly with others—joint bank accounts, real estate property, and vehicles; those assets will pass to the surviving joint owner through what is called “right of survivorship”. Plans which have designated beneficiaries (i.e. RRSPs, TFSAs) will pass outside of your estate, unless the estate is the named beneficiary.
Power of attorney places the responsibility of choice with those you trust most. Without power of attorney, your family might have to go through the very painful and costly process of committeeship, which is when the court system gets involved to make choices on behalf of the incapable individual. In such a case, the court will try to find the most suitable person to be the individual’s committee. If there is no one suitable, the Public Guardian and Trustee will be appointed.
In other jurisdictions (such as in the United States), the term “attorney” normally refers to a lawyer; however, attorney in the legal system of British Columbia denotes an individual appointed under a power of attorney to represent someone else. This person could be a spouse, relative, friend, or a legal professional.
They should be someone that you truly trust because the type of authority that you are granting to that person could be misused. The appointee must be an adult and preferably someone who is physically close to you so that they can be ready to help when needed. Most people appoint their spouse and, if they have children, one of their adult children as an alternate, or two of their adult children as alternates. If they do not have a spouse, or adult child(ren) that they trust to assume this responsibility, they may choose to appoint two close friends.
If you have a general power of attorney, they can do anything that you can lawfully do through an agent; however, you can restrict the authority of your attorney to specific matters, like the selling or purchasing of a specific property.
It is best to have a principal attorney, as well as an alternate, in case the principal is unable to act on your behalf.
You need a representation agreement if you want a specific person to make medical decisions on your behalf. Your next of kin may not be the most suitable person. If you have more than one person representing you as next of kin, they may not agree with each other, or their values and beliefs may be not the same as yours.
A section 7 representation agreement covers medical and personal care decisions, as well as day-to-day financial decisions, and is mostly intended for people with limited capacity. The legal criteria that a person needs to meet in order to be able to make a section 7 (Standard Powers) representation agreement are very flexible and not as strict as those required for a section 9 (Enhanced Powers) representation agreement. Section 9 agreements are intended to be used by fully capable adults and includes authority only for medical and healthcare matters.
The representation agreement states who is going to be your decision maker, while the advanced directive is where you have the opportunity to express your wishes for health and personal care decisions. It is better to have both documents to provide your representative with some guidance regarding how to decide on your behalf. While it is possible to have one without the other, having an advance directive alone without appointing a specific person to be your decision maker could be risky, as you would not have power over who speaks on your behalf. Advance directives are not designed to cover specific medical scenarios, so your precise wishes might not be properly followed.
There are several types of trusts, but the most common ones are:
Alter Ego Trusts
Alter ego trusts are for people aged 65 or older. In this type of trust, the person who creates the trust (settlor) receives all the income from it and is the only one who can use the trust’s money or assets while they are alive. The settlor also serves as the trustee and beneficiary until they pass away. After their death, the remaining assets are given to family, friends, or charities as specified in the trust document. This setup usually helps in delaying taxes on capital gains for up to 21 years.
Simple Trusts in Wills
Trusts for children under 19 are created in wills. Depending on the will, the assets can be distributed to beneficiaries when they turn a specified age, like 19 or 30.
Discretionary Disability Trusts
These trusts are created for individuals with disabilities through a will (testamentary). This ensures that the money left to them does not affect their government benefits or exceed the provincial asset limit of $100,000.
It is recommended to speak to an accountant or tax lawyer regarding trusts and tax implications.
When someone passes away, their assets need to be distributed. If there is a will, the person named as the executor will need to apply for a Grant of Probate. If there is no will, you will need to apply for a Grant of Administration, after you get consent from all potential heirs, such as family members who are entitled to a part of the estate. Usually, a spouse, sibling, or parent applies based on their relationship to the deceased.
For both scenarios, you will need to gather information about the deceased’s assets, investments, and beneficiaries. This information is required to file an application with the registry so that the trustee or executor can distribute the assets.
If there are minor beneficiaries involved, you will need to notify the Public Guardian and Trustee (PGT). Without a Grant of Probate or Administration, you will not be able to access or distribute the deceased’s assets or sell any property they owned. Be aware that this process can take up to a year, and distribution cannot begin until 210 days after the Grant has been issued.
A notary is someone who is a legal professional working for you to ensure that your best interests are served and protected.
Once your transaction is firm and binding and we receive notification of your upcoming transaction, we gather the necessary information from various authorities, such as performing a title search from the Land Title and Survey Authority of BC. The title search shows all encumbrances on title. The contract of purchase and sale dictates which encumbrances and charges (if any) are to be removed from the title. Once the full information is collected, we will contact you to set up an appointment.
Although we are available as a resource to our clients beforehand, we are typically notified of a transaction once it is firm and binding (after removal of all subject clauses). Hence, we cannot arbitrarily change any terms in the contract. We may receive a copy of your contract from your realtor and/or mortgage instructions from your lender, but we would not proceed without first contacting you for confirmation to act on your behalf. You have the right to choose who you would like to represent you in your conveyance.
Once we receive notification of your upcoming transaction, we gather the necessary information from you by phone or through our online documents. Additional documentation is received from your realtor and mortgage lender, as applicable. We perform various due diligence searches regarding title, property taxes, condominium accounts, etc. and prepare the appropriate documentation and statements for the transfer of title or placement of a mortgage. We liaise with the vendor’s representative and all other parties involved with the file. You will have an appointment with us usually within the week prior to completion to sign documents and review closing financial statements. No later than the morning of the completion date you provide us, in trust, with certified funds to complete the transaction. The exchange of title for funds takes place on the completion date and you receive keys through your realtor by noon of the possession date. Full reporting follows by mail. We are available at all times throughout this process and are thereafter available to field your questions or confirm the status of your file.
There are transaction costs and there are adjustments. Adjustments are debits and credits between the parties for costs of ownership such as property tax, condo fees, etc. and are accounted for in closing statements. Transaction costs, however, are costs over and above the purchase price and are out-of-pocket. Before the conveyance process begins, these may include mortgage application, appraisal and/or brokerage fees, home inspections, condo forms, and the like. The main costs to be anticipated from the conveyance process are the property transfer tax and/or GST (see our calculator tab to see how much transfer tax or GST may be applicable to you), and survey/title insurance if required by lender and legal account.
Generally speaking, anyone who purchases or acquires an interest in property that is registered at the Land Title Office will need to pay the property transfer tax based on the fair market value of the land and improvements.
The tax is calculated as 1% on the first $200,000, 2% on the value that is greater than and up to and including $2,000,000, and 3% on the portion that is over $2,000,000. If the property is residential, a further 2% will be levied on the portion that is greater than $3,000,000.
Please feel free to use our Property Tax Calculator.
There are a variety of exemptions for non-arm’s length transactions but the one most commonly used for unrelated parties is that offered by the First-Time Home Buyer program.