New Will Laws for BC to be Introduced

[coffeeFreak]

This is worth looking over.

Why is the legislation being changed?

The law of succession is among the most archaic areas of law. Some provisions trace their history to the Wills Act of 1837. The ministry agreed with the BCLI that this area of the law needed to be reformed and provided the institute with funding to recommend changes that would modernize the legislation.

When will the new legislation come into effect?

Because this is a substantial change, the law is expected to come into force in 2013, to allow the public and legal community an opportunity to learn the new law and prepare for it.

I already have a will. Do I need a new one?

The new legislation will not invalidate any wills made before it came into effect. However, some of the laws governing the interpretation of your will may change, so you may wish to review it with your lawyer to ensure your wishes are upheld.

Examples of some of the changes and how they might affect an existing will are as follows:

Previously, if you gave someone a gift while you were alive during their lifetime, there was a possibility the amount of the gift would be deducted from that person’s inheritance. The changes clarify the law by stating that if you want a gift to affect an inheritance, that intention must be specified in the will.

Previously, if your estate was not large enough to cover all debts and gifts, people receiving personal property (such as jewellery, cars or furniture) were given lower priority than people inheriting gilts of land. Personal property gifts would be used first to pay off debts. With these changes, land is applied to pay off debts equally with personal property.

Also, in past, a person receiving personal property (for example, a car) would not have to pay any money still owing on the purchase or improvement of the property (such as outstanding car payments). Gifts to other beneficiaries would be reduced to pay off this debt. Now, unless the will specifies otherwise, everyone who inherits property inherits the “net value” (the value left after any debts against the value of the gift are paid off).

Why can’t the old law still be applied to my old will?

Having the old law apply to wills made before the Wills, Estates and Succession Act comes into force would be confusing. A person in their 20s who made a will last year may live 60 or more years from now. That would mean that the courts would be faced with administering both the old and new laws long into the future.

http://www.ag.gov.bc.ca/justice-reform-initiatives/civil-project/wills-estates-qa/index.htm

New Wills Law for BC PDF | Print |
WRITTEN BY TOM CARTER, LAWYER
TUESDAY, 17 JANUARY 2012 12:39

This is a summary of British Columbia's new Wills, Estates, and Succession Act, which is expected to come into force in early 2012. The new Act repeals the Estate Administration Act, Probate Recognition Act, Wills Act, Wills Variation Act, and sections of the Law and Equity Act, and Survivorship and Presumption of Death Act.

Here is a point form summary of the major changes:

General

Definition of “spouse” includes anyone in a marriage-like relationship for at least 2 years.
Intestacy (Dying Without a Will)

No change where spouse survives without issue (now called “dependants”)
If spouse survives with dependants, spouse receives household furnishings and spousal preferential share
If all descendants are descendants of the intestate and the surviving spouse the spouse’s preferential share is $300,000
If one or more descendants are not descendants of the surviving spouse, the spouse’s preferential share is $150,000
After payment of spouse’s preferential share 1⁄2 residue goes to spouse and 1⁄2 is divided among descendants
Personal Representative of the intestate is forbidden to dispose of spousal home for 180 days from death of intestate to allow surviving spouse time to decide if he/she wishes to purchase it
If no spouse or descendants, all to the intestate’s parents equally
If no parents then to descendants of parents
If no spouse, descendants, parents or descendants of parents then to grandparents or descendants
If no heirs, then to government per Escheat Act as before
Designations of Beneficiaries of Benefit Plans

Benefits payable to designated beneficiaries in RRSP and Insurance plans are not part of the estate and not subject to claims of deceased owner’s creditors
Wills

Marriage no longer revokes a will
Legal age for making a will changed to 16
Legal age for witnessing a will is 19
Gifts to or appointment as executor of someone who at death of will-maker is no longer a spouse of the will-maker lapse because former spouse is deemed to have died before the will-maker
Gifts to children during will-maker’s lifetime are no longer treated as advances out of the estate
Survivorship

In common tragedies, the seniority presumption that oldest died first is repealed and replaced with presumption that each died before the other
And, when joint tenants die in a common tragedy the property is deemed held in tenancy in common
For gifts in a will, a beneficiary who does not survive the will-maker by 5 days is deemed to have died before the will-maker

http://www.self-counsel.com/news/law/wills-and-estates/485-new-wills-law-for-bc.html

[Rwede]

Just wait until the NDP introduce their coveted inheritance tax. Families will be left with nothing from the already taxed, life-long hard work of their parents. But Dixhead will spend your money much more wisely than you ever would, so shut the *bleep* up and let him take care of things for you.

[GordonH]

IMO inheritance should be tax free, since the parents already paid taxes on the money & land taxes on the property.

[Rwede]

IMO inheritance should be tax free, since the parents already paid taxes on the money & land taxes on the property.

Exactly. But the NDP will impose an inheritance tax on BCers if people are stupid enough to let them.

[OnTheRoadAgain]

Of course it should be tax free. So should that second hand vehicle you bought.
We plan to gift our kids their inheritance along the way, to avoid taxes.
Not sure now if this is still applicable under the new law, but it sounds as if it is.

[Triple 6]

Just a reminder. Please don't report a post and then quote it! Thanks!

[Urbane]

Exactly. But the NDP will impose an inheritance tax on BCers if people are stupid enough to let them.

Inheritance taxes are grossly unfair but it wouldn't surprise me one bit if Dix implemented one. In fact, it would surprise me more if Dix didn't implement one. That's why people need to wake up. It's fine to be mad at the Liberal government (me too) but be careful what you're voting FOR.

[kgcayenne]

Hasn't there always been tax on inheritance?

[The Green Barbarian]

Hasn't there always been tax on inheritance?

my understanding, given I've done "death returns" before, is that on death, all of your property is deemed sold at fair market value, and your estate is liable for the tax on any gains incurred. This is why life insurance is vital to any basic estate plan, as life insurance proceeds are tax free (at least until the Dix-heads are elected anyway) and so the proceeds can be used to pay off any tax owing by the estate. Unless you really hate your kids, you really don't want to leave them with a giant tax burden and CRA going after them for taxes you owe on your demise. What I believe Urbane and Rwede are talking about is a "special" tax on top of regular taxes to be assessed to people on death. This is incredibly stupid and punitive, but given Dix is a complete idiot, surrounded by idiots, I can see him doing just this. What you may and probably will see is a lot of people buying homes in Alberta and spending New Years there, so they can legally state on December 31st of the year they died they were resident in Alberta. This is what a lot of people did during the last NDP reign of terror in the 1990's, when the idiotic NDP government of that time allowed personal tax rates to get to some of the highest in Canada.

[Urbane]

my understanding, given I've done "death returns" before, is that on death, all of your property is deemed sold at fair market value, and your estate is liable for the tax on any gains incurred. This is why life insurance is vital to any basic estate plan, as life insurance proceeds are tax free (at least until the Dix-heads are elected anyway) and so the proceeds can be used to pay off any tax owing by the estate. Unless you really hate your kids, you really don't want to leave them with a giant tax burden and CRA going after them for taxes you owe on your demise. What I believe Urbane and Rwede are talking about is a "special" tax on top of regular taxes to be assessed to people on death. This is incredibly stupid and punitive, but given Dix is a complete idiot, surrounded by idiots, I can see him doing just this. What you may and probably will see is a lot of people buying homes in Alberta and spending New Years there, so they can legally state on December 31st of the year they died they were resident in Alberta. This is what a lot of people did during the last NDP reign of terror in the 1990's, when the idiotic NDP government of that time allowed personal tax rates to get to some of the highest in Canada.

Exactly. The federal capital gains tax already serves as a quasi-inheritance tax of sorts. Paul Martin, to his credit, did lower the rate on the capital gains tax so it's much fairer than it once was but it still takes a chunk out of an estate. In terms of a special inheritance tax in BC Dave Barrett mused about implementing one and then backed off. I have a feeling that Adrian Dix would love to go ahead with one now. He's going to be really short of money, particularly given his statements about various programs being underfunded, so he'll be looking for money anywhere he can find it. As you suggest, however, there will likely be some unintended consequences for Dix.

[Glacier]

Inheritance tax: also called and estate tax is a levy paid by a person who inherits money or property or a tax on the estate (total value of the money and property) of a person who has died.

If Canada had an inheritance tax (as the U.S. has and as Jack Layton proposed for Canada), and you die (as my Americans grandparents did 5 years ago), there would be a tax on your total wealth. After the money has been paid to the State, your beneficiaries get what's left. If they inherent property and turn around sell it, they are also subject to the capital gains tax.

[ticat900]

Hasn't there always been tax on inheritance?

There is NO inheritance tax period.There is a possible capitol gain when u sell a inherited land or house property
Some of and or all of the estate has to be PROBATED which is inexspensive(still a rip off)
0% on first 25K .6% on next 50K and 1.4% on anything over and above
RRSP will have to pay the tax when cashed same as if you (dead person) spent them
so a 500K estate could generate $6650 in probate fees.Not a big deal at all
There are no inheritance taxes at this time
One way to beat some fees is have your mother and or father put you on title as part owner of the house or propertys
Then there is no probate fee,s on this part and if there,s life insurance have them deem you benificery and no probate fees

[Urbane]

Inheritance tax: also called and estate tax is a levy paid by a person who inherits money or property or a tax on the estate (total value of the money and property) of a person who has died.

If Canada had an inheritance tax (as the U.S. has and as Jack Layton proposed for Canada), and you die (as my Americans grandparents did 5 years ago), there would be a tax on your total wealth. After the money has been paid to the State, your beneficiaries get what's left. If they inherent property and turn around sell it, they are also subject to the capital gains tax.

In Canada you pay the capital gains tax whether or not you sell the property. It's a "deemed disposition" at that point.

[GordonH]

I'm aware these are the tax rules & laws of Canada, IMO it stinks.

As I mention earlier which I will repeat: since the parents have already paid taxes on any cash & land taxes on any property, inheritance should be free of taxes & capital gains.

[Urbane]

I'm aware these are the tax rules & laws of Canada, IMO it stinks.

As I mention earlier which I will repeat: since the parents have already paid taxes on any cash & land taxes on any property, inheritance should be free of taxes & capital gains.

That's my opinion too. And yet you have some people wanting even higher capital gains taxes and/or a special provincial inheritance tax implemented.