Key Changes in WESA: Part 4

by Lisa Collins | April 15, 2014

cheque with penOver the past couple of weeks, we have been highlighting some of the key changes resulting from the Wills, Estate and Succession Act (WESA), in regards to BC’s wills and estates legislation. Click here to see previous posts in the series. In this final part of this blog series, we outline some final important changes.

Gifts and Loans
Previously, it was presumed that a gift made during a will maker’s lifetime to a child was an advance of that child’s inheritance. This is no longer the case. With WESA, any gifts in the will now survive and are distributed according to the terms in the will.

The following presumptions have also been abolished:

  • That legacies in a will are revoked if the will-maker made a lifetime gift in the same amount
  • That a debt owed by the will-maker is satisfied by an equal legacy to a creditor.

If you would like to account for either of the above in your estate, it will now be necessary to specifically indicate this in the estate plan.

Benefit Plan Beneficiary Designations
WESA includes a new framework for benefit plan beneficiary designations. WESA benefit plans are those which provide benefits to employees, their dependents, and their beneficiaries, including pension/retirement plans, welfare or profit sharing plans, and others. These can also include arrangements for the payment of an annuity, RRSP, RRIF or TFSA.

This section of WESA does not apply to contracts of insurance or declarations for Life/Accident/Sickness Insurance – these are governed by the Insurance Act of BC. Where there is a conflict or inconsistency with other BC or Federal enactments, those prevail over WESA.

A beneficiary designation itself under WESA is fairly informal; it only needs to identify the plan contract, the benefit and the intended beneficiary(s). For written documents, forms or agreements (other than a will), there is no requirement for a witness when signing the designation. WESA now allows for an irrevocable beneficiary designation, but this cannot be made in a will and must be filed with the specified office of the benefit plan administrator. Additionally, a designation can now be made in many formats: in a will, on a benefit plan administrator’s form, in a legal document/agreement, or as a declaration (written or electronic). You can see that the scope is quite broad!

With designations now allowed in additional formats, executors will have far more responsibility to seek out beneficiary designations that may have been made outside the will (and/or be in conflict with the will). Moving forward, it will be crucial for your lawyer and financial advisor to work closely together, to ensure that your will plan is coordinated with any beneficiary designations.

Any questions about the new WESA? Leave me a comment below. If you’re ready to explore whether a review and update of your estate plan is in order, please contact me at any time.

Key Changes in WESA: Part 3

by Lisa Collins | April 7, 2014

Wills Estate Succession Act (WESA)Last week I wrote about some of the significant changes that have been made to wills legislation in BC, with the enactment of the Wills, Estates and Succession Act (WESA) on March 31, 2014.  Here are some other important aspects of WESA you should be aware of:

Survivorship Rules
One of the significant changes in survivorship is that instead of arbitrarily presuming the younger person survives the older in the case of simultaneous deaths, each person will now be considered to have survived the other for the purpose of determining rights to property.  This means that the wills will need to set out who would be the alternative beneficiaries in that case.

Also, when dealing with a joint property or account, it is treated as if it were held by tenants in common if there are simultaneous deaths of the joint owners.  Thus, each of their estates will include their interest in the property or account, to be distributed to their own beneficiaries.  The legislation does contemplate the ability to provide otherwise in the Will or other instrument.  Another notable change is that if a person fails to survive a deceased person by five days, they are deemed to have died before the deceased person.  This time can be extended by the will-maker, but not shortened.   Thus if the person dies within 5 days of the will-maker, the bequest will instead go to the alternate beneficiaries.

Probate and Multiple Wills
WESA also brings into effect a new set of probate rules, resulting in significant changes to procedures and forms. One available option is to use two wills at once, which can help you to maintain privacy of assets, ease administration, and avoid probate fees on assets that do not require probate to transfer. Under this strategy, one Will deals with property that requires probate to transfer (such as real estate), and the other Will deals with the property that does not require probate (such as private company shares). My best advice would be to name different representatives for each of the two wills.

Wills Variation
The only change WESA made with respect to wills variation legislation is a recommendation in the BC Law Institute Report: If a will-maker does not make adequate provision for the proper maintenance and support of their spouse or children, the court can still order a provision to be made out of the estate that it believes is adequate and equitable. The multiple Will strategy must be considered in light of this, since the right to make a wills variation claim runs from the time the will is probated; if probate is not obtained, the limitation period may never expire.

Stay tuned for the next post in this series, where we will highlight the changes relating to gifts and loans and the new framework for beneficiary plan designations. As always, if you have any thoughts on these new provisions, please leave me a comment below.

Key Changes in WESA: Part 2

by Lisa Collins | April 2, 2014

wesa blog part 2Earlier this week, we introduced the recent enactment of the Wills, Estates and Succession Act (WESA) in BC. Over our next few blog posts, we will highlight some of the key changes you should be aware of, and how they might affect your estate planning moving forward.

What is a Will?
Amendments contained in WESA will allow other documents (besides the Will itself) to have testamentary effect. This means that the court is given discretion in certain circumstances, to use a “record, document, writing or marking on a will or document”, including electronic data. These records or documents may not reflect the final intentions of the deceased person. The court has also been given the power to correct accidental errors or errors made by will drafters, if they failed to understand or properly carry out the will-maker’s instructions. Extrinsic evidence, including evidence of the will-maker’s intent, is required in this case.

Intestacy
When a person dies without a will, there are new rules that apply under WESA. Quite simply, the distribution of assets that would occur under the new legislation would NOT be favourable for anyone involved. Not to mention that estate planning itself also allows you to save taxes, ease administration and manage the assets of others. My best advice is to do your planning ahead of time, have a Will in place and not rely on the intestacy provisions.

Marriage No Longer Revokes a Will
Under the former legislation, when a person got married, the marriage automatically revoked their will. This is no longer the case under WESA.
However, a gift to a spouse, or appointment of a spouse as an executor, is revoked if after the Will is made the person ceases to be the will-maker’s spouse.

Definition of a Spouse
The definition of spouse is important for many aspects of WESA, including entitlement under a will, the right to vary a will and intestacy entitlements. WESA’s definition of “spouse” includes both legally married spouses and individuals who have lived together in a “marriage-like relationship” for at least two years. This includes same-gender relationships. Of even greater importance are the provisions which dictate when a person ceases to be a spouse, as this will impact their rights under WESA:

  • Legally married spouses cease to be spouses when they separate and cause an interest in family property under the Family Law Act (“FLA”) to arise. Under FLA, each spouse has a right to a half interest in all family property upon separation. However, there is a ‘reconciliation’ exception within FLA that is also being proposed as an amendment to WESA. It says that spouses are NOT considered to have separated if they begin to live together again within one year, for the purpose of reconciling, and they continue to live together for at least 90 days thereafter.
  • In the case of a marriage-like relationship, a person ceases to be a spouse when at least one person “terminate” the relationship. This means that spousal rights vanish overnight, and could result in significant unintended consequences due to a temporary separation or breakdown in the relationship. It is not yet clear how the proposed ‘reconciliation’ amendment may apply to these marriage-like relationships, especially if there has not been a physical separation.

In our next blog post, we will review some of the other important changes, including those relating to the new survivorship rules and multiple wills. If you have any thoughts or questions on this new legislation, please leave a comment below. As always, if you have questions about your own estate plan, feel free to contact me at any time.