Fact or Fiction: Debunking Myths about Estates

Myth 1: Having a Will eliminates the need for probate.

First of all, let's understand what probate actually means. Probate is a legal process where a court ensures that a person's belongings are given to the right people as instructed in their Will or by following the law. This process takes time and involves appointing someone to handle everything, gathering belongings, paying debts, and distributing the remainder to the correct individuals.

When you have a Will, the probate process involves the court reviewing the Will to determine how the deceased person's assets should be distributed. The person named as the Personal Representative (also known as the executor) in the Will is responsible for carrying out these instructions. The court oversees the actions of the Personal Representative to ensure that the assets are distributed according to the wishes outlined in the Will.

In simple terms, a “Grant of Probate” from the court can be thought of as a stamp of approval from the court that allows the administration of the estate to proceed as outlined in the application (following the terms of the Will).

However, when a person passes away without a Will, the probate process becomes more complex. In Alberta, where we are located, the process is technically not called "probate" when there is no Will. Instead, a loved one would need to apply to be the “administrator” of the estate (for those wondering, both an administrator and an executor are considered a Personal Representative). And they would need a "Grant of Administration” rather than a “Grant of Probate”. The court will follow the laws of the jurisdiction, known as intestate succession laws, to determine how the assets should be distributed among the deceased person's heirs. Through the Grant of Administration, the court will appoint an administrator, typically a close family member, to handle the distribution of assets. No one has authority until the Grant is provided. This process may involve more court supervision and can sometimes lead to disputes among family members regarding the distribution of assets.

Contrary to popular belief, having a Will does not eliminate the need for court involvement. Instead, a Will serves as a vital tool within the estate administration process. Having a Will makes the process simpler and more efficient for loved ones left behind.

Myth 2: Wills are just for the elderly and the wealthy.

Many people mistakenly believe that only the wealthy need a Will, but that couldn't be further from the truth. Regardless of your financial status, almost everyone over the age of 18 possesses assets that hold value and should be passed on according to their wishes.

These assets can include personal belongings, retirement accounts, bank accounts, life insurance, real estate, cars, and valuable items like jewelry and art. Having a valid Will ensures that your assets are distributed as desired. Without a Will, the court system will handle your affairs, and the distribution and inheritance may not align with your intentions. It's also important to note that no one will have any authority until the court signs off.

Myth 3: Family members will automatically take guardianship of your children.

Another common misconception is that family members will seamlessly assume guardianship of your children in your absence. However, this assumption can lead to unfortunate outcomes. As a responsible parent, it is essential to establish specific parameters for the care of your minor children.

While the court still needs to approve any guardianship arrangement, having your preferences set out in a Will allows you to voice your wishes to the court when you would otherwise be unable to do so. The court must consider your preference in their decision-making process. By outlining your preferences in a Will, you can provide clarity, alleviate stress, and ensure a stable future for your children.

Myth 4: You are on your own as a Personal Representative.

Being an executor or administrator is a significant responsibility that involves managing numerous duties. This can be overwhelming, especially while grieving.

Hiring a lawyer experienced in estate matters can be incredibly valuable. They can guide you through the probate/adminsitration process, handle necessary applications and paperwork on your behalf, and provide expertise and support. Additionally, lawyers can also assist with distributions (and the associated paperwork), but this would often be at an additional cost.

An accountant with expertise in estate administration can also be a valuable resource. They can offer advice on tax implications, asset valuation, and financial management during the process. They may also assist with estate accounting, ensuring that all financial aspects of the estate are handled properly.

Furthermore, a trust company can provide professional help in managing and handling an estate. A trust company is a specialized financial institution that offers services related to estate planning, asset management, and trustee duties. They are licensed and regulated to provide these services and have expertise in managing trusts and estates. A trust company can act as a professional executor or administrator, overseeing the distribution of assets according to a Will or applicable laws. They can navigate the complexities of the probate process, ensure compliance with legal requirements, and efficiently manage the estate's affairs. They can also provide continuity and impartiality in estate administration, especially in cases where family dynamics might be complex or prone to conflicts. It's important to consider their rates in the context of any particular estate.

Remember, you do not have to navigate the executor's role alone. Exploring different professional options can provide the support and expertise you need to fulfill your duties effectively.

Disclaimer: The information provided in this blog post is for general informational purposes only and should not be considered legal advice. For specific legal advice, please consult a qualified professional.

Thanks very much to Katelyne Steele for her assistance in preparing this post! We are so grateful to have her. Here is some more info about Katelyne:

Hi, my name is Katelyne, and I am a policy studies intern at Modern Wills for the 2023 summer! I enjoy the opportunity to research and inform on estate legislation, rules, guidelines, etc., for our clients to read and better understand estate planning.