Real Time Web Analytics

Friday, April 3, 2020

What can be done with an estate when the probate court is closed?

Across Canada, we lawyers are working without a court system. The courts are closed for all but emergency matters. We're like teachers without schools or doctors without hospitals. Many of us are still open, but using work-arounds to keep our clients' matters moving.

But what work-around is there for the absence of a court-issued Grant of Probate or Letters of Administration?

There is no direct substitute. Only the court has certain powers, particularly when someone passes away without a will. Nobody else can name an administrator if the deceased didn't name an executor. However, this doesn't mean that every estate has to come to a standstill.

In a case where someone passes away leaving a will, the named executor can still consult a lawyer to get an opinion on the validity of the will. Especially in the case of home-made wills, I don't recommend trying to get too far with the estate without at least finding out if the basic points of a valid will have been properly covered. A lawyer is not a judge, but an experienced lawyer can spot most potential problems with wills.

An executor named in a will that cannot go to the probate court should take care with unusual gifts or arrangements. If the will contains gifts to charities or friends or anyone else who would not be a beneficiary on intestacy, it might be smarter to wait until the courts re-open. You do not want to make gifts to people that will have to be taken back (good luck) if the will is later found to be invalid. There is significantly less risk to the executor if the will sets out a distribution that is similar to what would happen on intestacy.

There is a great deal that can be done if all beneficiaries named in the will agree on certain procedures. It is not advisable to try to sell real estate without a Grant of Probate. However, property that is jointly owned by the deceased and a surviving joint owner can be processed, assuming that the land registry in your province is still open.

You could probably also deal with other assets, such as the contents of the home. You do not need a Grant of Probate to deal with those, unless there are specific, valuable assets such as artwork, jewelry, or collections. An executor would be safer to take those valuables into safe-keeping and simply hold onto them for now.

You would be able to arrange for payment of debts such as the funeral bill by taking the bill to the deceased's bank. Assuming there is sufficient money in the deceased's account, the bank would pay the bill directly to the funeral home. A Grant of Probate is not required because the money does not pass through the hands of the executor. This works for other bills, too.

If there are assets that name a beneficiary, such as a life insurance policy, pension, or RRSP/RRIF, those can be paid out. Because they are not part of the deceased's estate, they do not require a Grant of Probate. The executor or other family member should provide a Death Certificate and other required information so that the bank or insurance company can take it from there.

You might also be able to deal with bank accounts. This is where the agreement of the beneficiaries comes in. If the only asset of the estate is a bank account, the banks have a system in place whereby they accept indemnities (releases) from all of the beneficiaries instead of getting a Grant of Probate. Do not expect this to happen in all cases, or where there is a significant sum of money in the account. In my experience, the banks are usually only willing to use this procedure where they don't wish to deplete a small estate by requiring probate. As always, a named executor should be wary of handing out funds to beneficiaries before debts are paid.

If someone has passed away without a will, it is going to be nearly impossible for anyone to progress with the estate. My comments above about joint property and beneficiary designations apply just as much to people who pass with no will, but you are unlikely to get anywhere with the banks. Nor should you distribute any household items.

This is a really unusual time for everyone, lawyers and their clients included. We're all just coping as best we can. If you are left with an estate while the courts are closed, talk to an estate lawyer to see how far you can get with the estate.

No comments:

Post a Comment

You might also like

Related Posts with Thumbnails