The death of a loved one brings many emotions that can be difficult to bear. Adding to the difficulty is that there is much to be done after a person’s death. Searching for their will, making funeral arrangements, and trying to determine what to do next can feel overwhelming when you’re grieving.
What if the will search comes up empty? What if a will is found, but it isn’t valid? When a person dies without a valid will, it’s called dying intestate. In that situation, BC law dictates how the intestate estate must be distributed, following the intestacy rules set out in the Wills, Estates and Succession Act (WESA). That means the entire estate is divided based on a legal formula—not based on what the deceased person wanted, or what best meets the needs of their surviving family members.
To protect your loved ones and avoid the problems that can come with intestate succession in British Columbia, it’s strongly recommended that you seek legal advice. The wills and estates lawyers at Onyx Law Group have the experience and expertise necessary to make your will and put your mind at ease. Schedule a consultation with us today—let us help you get your estate planning in order.
Today’s blog post is all about intestate laws. We’ll discuss what dying intestate means, what happens to an intestate estate, and who inherits when a person dies without a valid will in BC. We’ll also explain simple steps you can take to avoid dying intestate.
What Does It Mean to Die Without a Will in BC?
When a person dies without a will in British Columbia (called dying intestate), intestate laws decide how their estate is distributed. BC’s rules for intestate succession, which are set out in Part 3 of the Wills, Estates and Succession Act (WESA), require that the estate be divided according to a fixed formula based on the total value of the deceased’s estate and the combination of next of kin the deceased leaves behind.
The required distribution may not reflect the deceased’s personal wishes or the needs of their loved ones. That can lead to disputes and cause a lot of stress, heartache, and disappointment—especially in a blended family. Stepchildren aren’t automatically entitled to inherit from a stepparent in British Columbia.
It also means the deceased person doesn’t get to choose the trusted person they want to act on behalf of their estate (known as the personal representative of the estate). When a person dies with a legal will in place, their personal representative is the person named in their will as estate trustee or executor. When a person dies without a will, a court application must be brought to appoint an administrator to act as personal representative.
The court decides who it considers appropriate to appoint. The surviving spouse and adult children of the deceased are given priority if they apply. A government agent—the Public Guardian and Trustee—is appointed if no family members, friends, or other eligible person applies.
What Happens to a Person’s Assets When They Die Without a Will?
After an individual dies without a will, the person appointed as administrator is the only person who has the legal authority and fiduciary responsibility to deal with the deceased’s assets. The administrator must ensure that all money and assets distributed from the estate go to surviving family members in the set shares required by WESA.
The administrator has a duty to preserve and protect estate assets. So, in addition to applying for a Grant of Administration to permit them to act on behalf of the deceased’s estate, the administrator must also:
- Prepare an inventory and valuation of all estate assets.
- Ensure estate assets and property are adequately insured, maintained, and protected during the estate administration process.
- Take control of all estate assets (transferring ownership registrations, collecting any debts owing to the estate, etc.).
- Sell estate assets as necessary, attempting to maximize value recovered from sale of any property or assets.
- Pay all valid debts owing by the estate from estate assets.
- File tax returns and pay taxes on behalf of the deceased’s estate.
Once general steps in the estate administration process have been completed, the administrator must ensure that the estate is distributed correctly to the deceased’s next of kin, in accordance with provincial laws.
Who Inherits First Under WESA?
Before we dive into the intestate succession rules, it’s important to emphasize that we are talking exclusively about BC intestate laws. If the deceased was not a BC resident, the provincial or territorial laws of where they resided will apply if they die without a will. Intestate laws vary from jurisdiction to jurisdiction, so if the deceased lived in Ontario or the Northwest Territories, for example, consult with a local lawyer for guidance.
Here is an overview of who inherits first under BC’s WESA:
- Spouse only: if a spouse dies leaving no children, their surviving spouse inherits the entire estate.
- Spouse and children from the same relationship: the surviving spouse would also inherit all, even if there are surviving children, if the net value of the deceased’s estate is less than the “preferential share of the spouse.” At the time this post was prepared, a spouse’s preferential share is $300,000 plus all household furnishings.
If the net value of the intestate estate is greater than $300,000, the residue of the estate (i.e., what remains after the preferential share is distributed) must be split between the spouse and the children. The spouse receives half of the residue, and the other half of the residue is split equally among the children of the deceased.
- Spouse and children from different relationships (blended family): the spouse’s preferential share is $150,000 plus all household furnishings in a blended family situation. If the net value of the intestate estate is greater than $150,000, the surviving spouse receives half of the residue, and the other half of the residue is divided equally among the deceased’s children.
- No spouse, only children: if the deceased person does not have a spouse, their estate goes to their children. If the deceased does not have more than one child, the entire estate goes to that child. If the deceased has two or more children, the estate is split equally among the children.
If any minor children become entitled to a share in their parent’s estate, the child’s share must be handled by the Public Guardian and Trustee of British Columbia.
What If No Heirs Can Be Found?
If the deceased person had no spouse or children, WESA provides a prioritized list of who inherits in that situation. Blood relatives (surviving parents of the deceased, the deceased’s siblings, etc.) are at the top of the list. The list continues on, ending with the potential for a distant relative inheriting (the descendants of the deceased person’s great-grandparents, etc.).
If the deceased person doesn’t have any surviving descendants who fit the list in WESA, the entire intestate estate passes to the provincial government pursuant to the Escheat Act.
What Happens to Common-Law Spouses in BC?
We’ve referred to inheritance rights of a “surviving spouse.” Now let’s talk about who qualifies as a spouse in the context of BC intestate laws. Our provincial rules define “spouse” as including both married people and people who have lived in a “marriage-like relationship” for at least two years (common law partners).
That means a surviving common law spouse has the same inheritance rights as a married spouse. A common law spouse in BC is entitled to household furnishings and a preferential share if their common law spouse dies without a will, provided they meet the definition of “spouse” as set out in WESA.
If common law partners were together for less than two years, or their relationship isn’t recognized as marriage-like, the surviving partner may receive nothing. If legal entitlement to spousal inheritance is challenged, the court will consider factors such as the nature of cohabitation, financial interdependence, and emotional commitment to determine whether the relationship was “marriage-like” at the relevant time.
What Happens to Jointly Owned Property and Registered Accounts?
Certain assets are not covered by BC intestacy rules because they aren’t part of the deceased person’s estate.
Any of the deceased’s assets which are owned solely by him or her will fall to their estate, while property owned jointly by the deceased with another does not fall to their estate (e.g. joint bank accounts or a house owned as joint tenants by spouses). Instead, the deceased person’s ownership goes directly to the surviving joint owner (known as the right of survivorship).
Life insurance policies, pensions, and registered investments such as RRSPs and TFSAs are also not covered by the intestacy rules if the deceased person properly named a designated beneficiary. The asset goes directly to the designated beneficiary if the deceased passes without a will.
What Happens to Debts and Taxes Without a Will?
After a person dies without a will, their personal representative (the administrator) is responsible for handling funeral expenses, taxes, and other debts. The general rule is that a deceased person’s estate is responsible for paying all outstanding debts in the deceased person’s name. The deceased person’s assets and property are used to pay debts owed by the deceased person.
After debts are settled, remaining assets and property are distributed to the intestate heirs if there was no valid will. The administrator can be held personally liable if they distribute assets to intestate successors without making adequate provision for the payment of all estate debts, including taxes owed to the government.
How to Avoid Intestacy in BC
Having a valid will in place is essential if you want to avoid intestacy. If you die without a legal will, you lose control over decisions such as the trusted person who will handle your estate (your estate trustee), who will inherit from your estate and when, and who will step in to raise your children (guardianship of minors).
If you already have a will, you should review it to ensure it continues to be legally valid and continues to reflect your wishes. It’s a good idea to review and update your will every few years, and when major life events occur (marriage, divorce, death of loved ones named in your will, birth of child/grandchild, etc.).
We recommend working with an experienced estate law lawyer, who can ensure your will avoids mistakes, complies with formal requirements, and aligns with your overall estate plan.
What Are the Tax Implications of Dying Without a Will?
There is no inheritance tax or death tax in BC. That means next of kin who inherit under the rules of intestacy generally don’t have to pay tax on what they receive. However, the deceased person’s estate must pay taxes, other debts, and fees before the estate assets can be distributed to next of kin.
Taxes owing and the cost of administering your estate will likely be higher if you die without a valid will. A probate application may be mandatory if you die without a will, which attracts probate fees and taxes. If you die without a will, you’ll have missed the chance to structure your affairs to reduce the tax burden on you and the ultimate beneficiaries of your estate.
Prepare Your Estate in Advance
To avoid intestacy and the disputes and disappointment that it can bring, you should have a will in place. Your will is your opportunity to clearly document your wishes for the distribution of your assets and appoint a trusted person to carry out your instructions after your death.
Getting an estate plan in place, including a last will and testament, can save you and your loved ones many times over in the long run. A little bit of estate planning can reduce or avoid other costs such as probate fees, estate taxes, and legal fees.
A skilled estate planning lawyer can provide invaluable guidance and expertise in navigating the complexities of inheritance law. With the right help, you can confidently lay the foundation for protecting yourself and your family members.
The estate planning professionals at Onyx Law Group in British Columbia can provide you with clear legal advice and guidance tailored to your unique situation. We welcome you to contact us today to arrange a consultation.
Frequently Asked Questions
Death without a will creates a lot of uncertainty. Here are answers to common questions that surviving family members ask after a loved one dies without a will.
Do Heirs Need to Go Through Probate if There Is No Will?
Probate will be very likely. A probate application is required where the gross value of the deceased’s estate is $25,000 or more. A Grant of Administration will also be needed if the deceased owned certain assets such as real estate, to give the administrator proper authority to deal with that property.
What Happens to a Bank Account When Someone Dies Without a Will?
It depends on a few factors, including whether the account was in the deceased’s name alone. If it was held only by the deceased person, the bank account forms part of the deceased’s estate and must be distributed according to the rules of intestacy.
Joint bank accounts are usually treated differently (but it depends on who the joint account holder is). If the surviving joint account holder is the spouse of the deceased, the spouse receives the whole of the account by operation of the right of survivorship.
What if There Are Multiple Spouses or Separated Spouses?
When a spouse dies without a legal will in place, they may leave behind both a lawfully married spouse and a common law spouse. In that situation, section 22 of WESA applies, which essentially requires surviving spouses to split the spousal share. If they can’t come to an agreement as to how the share should be split, the court must decide for them.
Do Stepchildren Inherit Under BC Intestacy Laws?
In BC, stepchildren do not have the right to inherit from their stepparent’s estate if their stepparent dies without a will. A stepchild must be specifically named as a beneficiary in their stepparent’s will to receive an inheritance from their estate.