Estate planning is a complex process that many people avoid. It can be unpleasant to focus on the thought of you not being around someday, but doing so is essential to ensure your assets are distributed according to your wishes. Failing to plan properly can lead to unnecessary delays, legal disputes, and financial losses for your loved ones. Here are the most common estate planning mistakes to avoid in British Columbia.
1. Not Having a Legally Valid Will
One of the biggest mistakes people make is not having a will or assuming that an informal document is enough. In British Columbia, a valid will must meet the requirements of the Wills, Estates and Succession Act (WESA):
- Be in writing (typed or handwritten).
- Be signed by the testator (the person making the will).
- Be witnessed by two adults who are not beneficiaries.
A will that does not meet these criteria may be deemed invalid, leading to your estate being distributed under BC’s intestacy laws, which may not reflect your wishes.
For more details on legal will requirements, visit the Government of British Columbia’s Wills and Estates page.
2. Failing to Update Your Will
Life circumstances change, and failing to update your will after major life events can cause serious problems. You should review and revise your will when:
- You get married or divorced.
- You have children or grandchildren.
- Your financial situation significantly changes.
- A beneficiary or executor passes away.
BC law automatically revokes a will upon marriage unless the will states it was made in contemplation of marriage. Learn more about will updates at the People’s Law School of BC.
3. Not Naming an Executor or Choosing the Wrong One
An executor is responsible for administering your estate, paying debts, and distributing assets. Choosing the wrong person can lead to delays, mismanagement, or conflicts among beneficiaries.
A good executor should be:
- Trustworthy and responsible.
- Financially literate.
- Willing and available to serve in this role.
If you don’t name an executor, the BC Supreme Court may appoint an administrator, which can complicate the process. Learn more about executor duties at the BC Law Institute.
4. Overlooking Power of Attorney and Representation Agreements
Estate planning is not just about what happens after you die; it also includes making arrangements for if you become incapacitated. Many people forget to set up:
- Power of Attorney (POA) – Authorizes someone to manage your financial affairs if you cannot.
- Representation Agreement – Allows someone to make medical and personal care decisions on your behalf.
Without these documents, your family may need to apply for guardianship through the courts, which can be costly and time-consuming. For more information, visit the Nidus Personal Planning Resource Centre.
5. Ignoring Probate and Estate Taxes
Probate is the legal process of validating a will and granting the executor authority to administer the estate. In British Columbia, probate fees are:
- 0% on the first $25,000 of the estate.
- 0.6% on amounts between $25,000 and $50,000.
- 1.4% on amounts over $50,000.
To minimize probate fees, consider strategies like:
- Naming beneficiaries on RRSPs, TFSAs, and life insurance policies.
- Holding assets jointly with rights of survivorship.
- Using trusts to transfer assets outside the estate.
For probate fee calculations, visit the BC Probate Registry.
6. Failing to Communicate Your Estate Plan
Many people make the mistake of keeping their estate plan a secret, which can lead to confusion and disputes among family members. To avoid this:
- Tell your executor and beneficiaries where your will is stored.
- Discuss your wishes for medical care and financial decisions.
- Ensure key documents (e.g., will, POA, financial statements) are easily accessible.
A well-communicated estate plan reduces the likelihood of legal challenges and ensures a smoother transition for your heirs.
Making Estate Planning a Priority
Proper estate planning protects your loved ones from unnecessary stress, financial strain, and legal complications. By avoiding these common mistakes, you can ensure that your estate is managed according to your wishes. For additional guidance, consult a BC estate lawyer or visit the Canadian Bar Association’s Wills and Estates section.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified professional for assistance with estate planning in British Columbia.
