Estate Planning

Wills

A will is a revocable instrument by which an individual disposes of his or her property to take effect after their death. This document allows the person creating the will, called the testator, to decide how his or her assets are to be distributed upon their death.

Through a will, the testator chooses the individual who will act as the personal representative of his or her estate.

The personal representative takes legal ownership of the assets of the testator’s estate, with a fiduciary duty to distribute the assets of the testator in accordance with the directions set out in the will and to act in the best interests of the beneficiaries of the estate.

In the will, the testator makes provision for the distribution of his or her estate to named beneficiaries. A will also allows the testator to establish a testamentary trust for his or her beneficiaries including but not limited to minor children.

A will allows for the naming of a guardian of minor or dependent children.

Enduring Powers of Attorney

An Enduring Power of Attorney is a document whereby an individual (the “Donor”) can name a person or persons to act on their behalf to manage their financial affairs while the Donor is alive. This document may either come into effect immediately or may spring into effect upon the mental incapacity or infirmity of the Donor. The Enduring Power of Attorney will remain in effect upon the Donor losing their capacity.

Personal Directive

Under a Personal Directive an individual, called the “Maker”, may authorize a person or persons to make decisions regarding a personal matter upon the Maker losing the capacity to make these decisions for themselves. A personal matter includes health care; accommodation; determining the persons with whom the person may live and associate; participation in social, educational and employment activities; legal matters; and any other matter prescribed by the regulations to the Personal Directives Act.

Estate Administration

Dying with a Will – Application for Probate

When a deceased has died leaving a valid will, the executor named in the will faces the decision as to whether the will needs to be probated.

Probate involves the application by the executor to the Court of Queen’s Bench of Alberta (Surrogate Matter) for an order verifying the validity of the will. This is called a Grant of Probate.

An application for a Grant of Probate is not required in every instance. In the event the deceased died leaving land in his or her name alone the Land Titles Office will require a Grant of Probate. Also, should there be investments in a financial institution in the estate valued over a certain amount, the financial institution will also require a Grant. The Land Titles Office and the financial institutions need to ensure the validity of the will before distributing the assets of the estate.

To probate a will means to have the court say definitively that this document was the deceased’s last will and to confirm someone to act as the deceased’s personal representative, or executor.

An application for a Grant of Probate involves the executor providing the court with information regarding the deceased, the will, the beneficiaries of the estate, potential claimants against the estate, together with an inventory of assets and liabilities of the estate as of the date of death of the deceased.

An application for a Grant of Probate can take up to six weeks to be obtained once the application has been submitted to the court. Upon receipt of the Grant, it is strongly advised that the assets of the estate not be distributed until the executor has received a Clearance Certificate from the Canada Revenue Agency (CRA) confirming that they are no further taxes owing by the estate. It can take over a year to receive a Clearance Certificate from the CRA.

If the circumstances warrant, the executor may determine to make an interim distribution of a portion of the estate assets to the residuary beneficiaries of the estate. An interim distribution should only be made in the event the executor has provided the residuary beneficiaries with an interim accounting and has received an interim release from each of the residuary beneficiaries.

Dying without a Will – Application for a Grant of Administration

If a person dies in Alberta without leaving a will they are said to have died intestate. In this situation an individual needs to apply to the Court of Queen’s Bench (Surrogate Matter) for a Grant of Administration which is a Court Order appointing the applicant as the administrator of the estate. The person with priority to apply is set out in the legislation and may not be the person the testator may have wished to act as the personal representative of their estate had they taken the time to prepare a will.

The beneficiaries under an intestacy, such as children, will inherit their share of the estate upon turning 18 years of age, which may be younger than the age that would have been specified by the testator in the will.

An application for a Grant of Administration would also apply if someone died with a will but did not name an executor therein, or if all of the persons named as executors in the will predeceased the testator or were unable to act.

Once a Grant of Administration has been issued by the Court, the Administrator appointed will have the same powers and obligations as an executor who has been issued a Grant of Probate by the Court.