How long does it take to get inheritance money from a trust in Canada? What is the process of receiving an inheritance? Can an executor withhold money from a beneficiary? How long after probate can funds be distributed in bc?
These are important questions that arise after the death of a friend or family member. The reality is that it will take several months—and in some cases, years—before you receive an inheritance from a Will. Let’s have a look at how the probate process works and how long it takes to receive an inheritance in BC.
If you’re looking for experienced help to address delays or problems receiving an inheritance, or your inheritance tax please contact Onyx Law Group. Our Probate and Estate Administration lawyers have extensive experience to draw upon when acting for estate beneficiaries.
A Will is a legal document that sets forth a person’s final wishes about what should happen to their property after they die and who should care for any minor children. A Will is also used to appoint an “executor” or “executors” who are responsible for carrying out the deceased’s final wishes and the administration of the estate.
An executor is the only person who has the legal and fiduciary responsibility to manage a deceased person’s estate. The executor’s primary responsibilities are to identify and protect the deceased’s assets (including buying insurance, if needed); pay debts, capital gains tax, and expenses; file final tax return; make gifts to named beneficiaries in accordance with the Will; and distribute the remaining “residue” of the estate among the beneficiaries named in the Will. The “residue” of an estate is any real or personal property that is not otherwise gifted to a specific beneficiary in the Will.
To be able to carry out their responsibilities, an executor is typically required to obtain an estate grant (called a Grant of Probate) from the Supreme Court of British Columbia. An estate grant gives the executor the legal authority to “take over” the deceased’s assets and “convert” the ownership of assets such as real estate and bank accounts from the deceased’s name to the name of the estate. This is a necessary step before the executor can transfer assets or property from the estate to the beneficiaries named in the Will.
Probate is the legal process for settling the deceased’s estate. Essentially, probate is a court application to verify the validity of the Will and authorize the named executor to act on behalf of the estate.
Without a Grant of Probate, the executor may not be able to carry out important tasks, including instructing financial institutions to sell investments and open or close bank accounts; signing land title documents to purchase, sell, mortgage, or transfer real property; and instructing ICBC to transfer ownership of a vehicle to another person.
Many institutions have strict rules in place to ensure that a deceased person’s property is not transferred contrary to the law. A court-certified copy of the estate grant is recognized by third parties such as banks, the BC Land Title Office, ICBC and the Canada Revenue Agency, and tells those third parties that the named executor has the authority to act on behalf of the estate.
When there is no Will, the spouse or other family member of the deceased, or other persons, can apply to be appointed the “administrator” of the estate. If successful, the probate court will issue an estate grant called a Grant of Administration.
Both types of estate grants (the Grant of Probate and Grant of Administration) have the same legal effect and vest the applicant with the same legal powers to act on behalf of the deceased’s estate.
When a person dies without a will in BC—known as dying “intestate”—it results in the deceased person’s estate being distributed to heirs according to the priorities set out in BC’s Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (“WESA”). The deceased’s spouse is generally first in line to inherit.
There are situations when an executor or administrator can withhold or not disperse inheritance money to a beneficiary. For example, as discussed below, the estate’s debts and inheritance tax must be paid before inheritance money can be dispersed.
That being said, there are situations where the executor or administrator is inappropriately withholding money or delaying distribution of the estate. If you are concerned about delay or the withholding of your inheritance, contact an experienced estate litigation lawyer at Onyx Law Group to discuss your options.
The first step Understanding how long it takes to get inheritance money from a trust is for the executor or administrator of the estate to gather information regarding all of the deceased’s assets, including bank accounts, real property, and vehicles, as well as any liabilities of the estate, such as mortgages, credit cards, loans, or other outstanding debts.
If the deceased died leaving a Will, the next step is for the executor to apply for a Grant of Probate. If there is no Will, a person will need to apply to be appointed administrator of the estate and obtain a Grant of Administration.
In both cases, an Affidavit of Assets and Liabilities for Domiciled Estate Grant (Form P10) must also be filed with the probate court. This document sets out all of the estate’s assets and debts, including their fair market value as at the date of death. Probate tax is calculated based on the amounts listed in the Affidavit.
Before applying for an estate grant, an executor or prospective administrator should seek advice from a lawyer to determine whether a Grant of Probate or Administration is required to distribute assets. Probate may not be needed for small or simple estates, and there are some types of assets can be paid to beneficiaries without the need for probate, such as Tax Free Savings Accounts, retirement accounts such as RRSPs and RRIFs, and life insurance policies.
Creditors, beneficiaries, and next-of-kin must be given notice before an estate can be distributed.
A formal notice, in a form required by BC probate court rules, of the applicant’s intention to apply for an estate grant must be delivered, together with a copy of the Will (if applicable), to all beneficiaries in the Will (if applicable), to intestate successors of the deceased’s estate (if there is no Will), and to creditors over $10,000 where the deceased died without a Will. This may require locating and notifying a possible spouse or children of the deceased, or distant relatives.
There is a 21-day waiting period that must be observed after the notices are delivered, which means the estate grant application cannot be submitted until at least 21 days after the notices have been sent.
It may also be necessary to advertise for creditors. A notice can be published in the BC Gazette or local newspapers to creditors and other claimants requiring them to come forward with their claims against the estate of the deceased person to the executor or administrator within a specified time period.
The probate court will review applications in the order in which they were filed. Once the court has reviewed the application, it will reach out to the lawyer or other named contact person to advise whether there are any issues that require resolution, to request payment of probate fees (if any), and/or to advise that the estate grant has been issued. Court processing time can take 4-8 weeks to several months.
The estate grant will only be issued once all issues have been resolved and probate fees (if any) have been paid. It’s not possible to obtain an estate grant without having first paid probate fees.
Once the estate grant has been issued, the executor or administrator can deal with the estate assets and start administering the estate by providing various institutions with a certified copy of the estate grant. For example, if real estate such as a home or cottage is to be sold, title can now be transferred into the executor’s name from the deceased’s estate, and the executor then has authority to sign any documents to complete the sale of the property.
Before any assets are distributed to beneficiaries, the executor or administrator must pay all of the estate’s expenses, such as funeral costs, court fees, probate fees, and legal fees, as well as any outstanding debts or legitimate claims against the estate. The executor or administrator can be held personally liable for these debts or claims against the estate if they remain unpaid after the distribution of the estate.
After all that is completed you can distribute assets.
Once the grant of probate is issued, a 210-day waiting period must pass before the executor can distribute the estate, unless all beneficiaries consent or there is a court order. The waiting period, imposed by BC’s Wills, Estates and Succession Act, is to allow time for any claims for maintenance from the estate—also known as a wills variation claim—to be brought.
A wills variation claim must be started within 180 days from the date the estate grant is issued and served on the executor no later than 30 days after that.
If the executor distributes an estate before the 210-day waiting period has passed, without obtaining consent or a court order, he or she is exposed to personal liability if a maintenance claim is later brought.
After estate assets have been sold and liquidated as necessary, all the money is pooled, and debts/liabilities are paid out. The executor or administrator is then in a position to begin distributing the estate.
A beneficiary can request an interim payment in British Columbia. Interim distribution is a legal process that allows beneficiaries of an estate to receive a portion of their inheritance early, before the final settlement of the estate. This distribution is made while the estate is still in the process of being settled, while waiting for the tax clearance certificate (see below), and before the outcome of a wills variation claim (if any). Interim distribution provides beneficiaries with access to some or all of their rightful share of the estate assets without having to wait for the legal process to conclude.
At the time of either an interim or final distribution, the executor or administrator must provide each residual beneficiary with a statement of account showing the assets and liabilities of the estate as at the date of death and any revenues or expenses of the estate that arose during the estate administration process.
The executor or administrator is also required to file any necessary final tax return, including a final income tax return and estate tax return, then pay capital gains tax owed. The executor or administrator can be held personally liable if taxes remain unpaid after the distribution of the estate.
It takes on average six months to get a clearance certificate from the Canada Revenue Agency. The clearance certificate confirms that the deceased’s estate has paid all taxes, interest, and penalties owed. Once the clearance certificate has been obtained, the executor or administrator can disperse the remainder of the estate to the beneficiaries or heirs.
Following the receipt of the tax clearance certificate from the CRA, final distribution can be made to the residual beneficiaries and then all remaining estate accounts can be closed. It can take a year or longer before the final distribution can be made to the residual beneficiaries.
As mentioned, it can take months, sometimes years, until you actually receive an inheritance. Here are some of the factors that can cause delay and impact the time to receive an inheritance:
In relation to the last point, if the deceased’s Will is challenged, the estate administration process is put on hold and the executor must not distribute the estate without the court’s permission. BC courts have the discretion to order that executors make payments from an estate notwithstanding a pending WESA s. 60 wills variation claim.
The estate settlement process can be slow and stressful for beneficiaries. Our team of estate planning lawyers and estate litigators can help you navigate the process and get the inheritance you’re expecting or help navigating the deceased’s final tax return. Contact us today for practical advice and effective solutions.
Onyx Law Group represents clients in family law, estate and trust litigation, estate planning and probate matters. Consult with our experienced team at
The information on this website is for general information purposes only. Nothing on this site should be considered legal, financial, tax, medical, or any other professional advice.