What Happens in BC When a Person Dies Without a Will?
What happens when a person dies without creating a will?
In BC, when a person dies without creating a will this is referred to as intestacy. Intestacy prompts the obvious question: what happens to the person’s assets? The Wills, Estates, and Succession Act, S.B.C. 2009, c. 13 (WESA), establishes a standard asset distribution scheme in the event of intestacy. In general, the intestate’s (deceased’s) spouse is first in line but their share of the assets depends on whether the intestate had children or descendants. Other relatives may also be entitled to a share if there is no spouse or children. However, before any assets are distributed, the court must appoint an administrator of the estate.
An administrator of an intestate estate has various responsibilities including the disposition of the remains, collecting and documenting assets and liabilities, keeping expense records, identifying potential beneficiaries, and eventually distributing the assets. Section 130 of WESA gives priority to the spouse to be appointed as administrator and gives them the ability to nominate an alternate. If the spouse is not appointed, the children of the deceased are next in priority order. Additionally, the consent of the majority of the deceased’s children can affect which child is ultimately appointed. If neither the spouse nor the children of the deceased are appointed, the court may appoint a person they consider appropriate in the circumstances.
According to section 25 of WESA, the standard asset distribution scheme will apply when there is no will (i.e. intestacy has occurred), as well as when a will is silent on the status of a part of the estate (partial intestacy). The starting point for distribution is always the spouse. WESA defines “spouses” as married people or people living in a “marriage-like relationship” for at least two years. People will no longer be spouses if they terminate their relationship, or in the case of marriage, divorce. Notably, WESA will not consider a couple “separated” if they begin living together again within one year of separation for the purpose of reconciliation, or for one or more periods totalling more than 90 days. If a person dies with a spouse but no children, section 20 of WESA determines that the spouse is entitled to the entire estate. Section 21 describes other possibilities: if there is a spouse and children, the spouse is entitled to the household furnishings and $300 000 with the remainder being split equally with half to the spouse and half to the children. If the children are from a deceased’s previous relationship, the $300 000 is reduced to $150 000. Spouses are entitled to their $300 000 (or $150 000) before any assets are distributed to the children. This means that if the total value of the estate is less than those amounts, the spouse will be entitled to the entire estate. In the rare circumstance that an intestate had two or more spouses, section 22 directs the surviving spouses to come to an agreement. If they cannot, the court may decide what happens for them.
If there is no spouse but the deceased had children, section 23 of WESA says the children split the estate equally among themselves. Section 23 goes on to detail which other relatives may be able to claim interest in the estate if there is no spouse or children. In priority order, these are parents, siblings, grandparents, siblings of parents and cousins, great grandparents, and descendants of great grandparents (second cousins etc.). If none of these relatives can be found, the estate will “escheat” to the provincial government according to section 23(2)(f) of WESA. This means that the government will be entitled to the deceased’s assets.
Finally, if a person dies without a will and there are no surviving guardians for a child, the default is that the director under the Child, Family and Community Service Act becomes the personal guardian of the child and the Public Guardian and Trustee becomes the property guardian of the child. If a family member or other interested person wishes to become a guardian, they must apply to the court under section 51 of the Family Law Act for an order appointing them. The court bases this decision on the best interests of the child and as such the court has final discretion on who may become the guardian.
Overall the framework created by WESA provides a clear pathway for resolving how an intestate estate must be distributed as well as the care and guardianship of any surviving minor children.
If you don’t have a will, or you’re ready to begin estate planning so your beneficiaries receive their intended inheritance, contact Heath Law