Cody & Company Law Offices Appointments Available
OLDS: 4905 C 50 Avenue Olds, AB T4H 1P8 403-556-1528
CALGARY: Second Floor 1700 Varsity Estates Dr. NW Calgary AB T3B 2W9 403-265-3010
Toll Free 855-368-2460
Open Monday to Friday 8:30 am - 4:30 pm closed for lunch 12:00 noon -1:00 pm
Closed Sundays, Holidays and every day from 12:00 noon -1:00 pm
Lawyers in Calgary and Olds, Alberta
Serving Olds, Didsbury, Sundre, Mountainview County, Three Hills, Trochu and Innisfail
Once an individual dies, their assets become known as their estate. At that point, their Will determines who shall administer their estate until those assets are distributed amongst their beneficiaries according to their requests. There are certain unavoidable rules in estate planning including the most significant one who gets paid first. The very first individual paid is the funeral planner/director. After the funeral director is paid, the tax man gets paid, then any creditors including any professionals involved in the administration of the estate. Once all of those individuals are paid, the bequests to the individuals can be made. The implication of this is that if the estate is not large enough to cover all of its bills before the individual gifts are given, the individual gifts are forfeited to pay the bills.
Assuming that there are ample assets to cover the end of life expenses it falls to the executor to ensure the beneficiaries receive their gifts. This discretion may be narrowed by legislation or by the will itself. For example, bequests to minor children cannot occur prior to their eighteenth year, in general. So if a will gives a significant amount of money to a minor that money must go into a trust for the benefit of that minor. It must remain in the trust at least until the child is eighteen years of age by law. Any withdrawals from that trust are at the discretion of the guardian and the trustee acting in the best interest of the beneficiary and the estate. Frequently, people will stipulate that minors not receive their full bequest until their twenty-first or twenty-fifth or some other significant birthday. In those instances, the executor must continue to manage that trust until such time as that birthday is reached.
Currently, when land is transferred by operation of a will, that will must go through a process called probate. In Alberta, probate is a technical reading of the will by the court to ensure that the will is proper, that the executor is the properly indicated individual and other considerations. Depending on the size of the estate, a probate fee will be applied. Probate fees in Alberta range to a maximum of $400.00 as of this writing. As this should indicate, the avoidance of probate shall not be a large consideration when one is writing one's will. The avoidance of other taxes and costs may well be a consideration but probate is a relatively minor concern at this time in Alberta.
In the time that the executor is responsible for the estate, they will have decisions to make regarding the continuation of investments, the potential sale or retention or leasing of real property or in fact the remortgaging may be required. All of these come within the purview of the executor. As the size of the estate increases, the potential liability of the executor similarly increases. As a result, it is often advisable for an executor to engage the services of one or more professionals to manage more complex estates. The costs of engaging these individuals are, generally speaking, an expense of the estate as they have been engages specifically for the benefit of the estate and the beneficiaries. The timeline for distribution of assets from the time of death of the individual varies greatly from one estate to the next. As a general rule, it is highly unusual for an estate to be fully disbursed before the second anniversary of death. There are several statutory requirements such as advertising for creditors that dictate that a minimum amount of time must pass following the death of the individual before the various claims to the assets can be determined and the assets distributed.
A final word should be said about the estates of those who have not written a will. Individuals who die without a will are termed "intestate" by the Courts. Should such a person have significant assets at the time of their death it could take many years and much legal wrangling to determine who should act as executor, what assets are included in the estate, and to whom those assets should be distributed and in what fashion and proportion. All of this can be avoided with the relatively simple exercise of consulting ones lawyer, accountant, and investment advisors and drafting a proper will prior to its necessity.