2010 Legal Check UpDecember 14, 2009
Effective Estate Planning for the Effect of MobilityFebruary 21, 2010
When you create your estate plan, you generally face 3 decisions: 1) What are your assets you want distributed through your will (your estate assets)? 2) Who do you want to leave your estate to (your beneficiaries)? 3) Who will control your estate, in order to pay your bills and distribute your estate assets (known as your executor or personal representative)?
When your beneficiaries, executor and estate assets are all located in Alberta, this will generally allow for a straightforward estate administration. If one of these 3 is outside the province, additional considerations apply. My article will examine the effect of owning land or buildings outside Alberta on your estate plan.
In the Medicine Hat area, it is not uncommon for people to own farmland in Saskatchewan, or recreation property in Montana, Saskatchewan, or B.C. If you own land registered in your name alone, your executor will need to apply to the Court for Probate. Probate is the procedure where the Court confirms the validity of your will and confirms your executor as the person who will handle your estate assets. This is also known as the Grant of Probate. Probate granted in Alberta authorizes the executor to deal with estate assets located in Alberta only. In order to deal with land or buildings located outside of Alberta, your lawyer needs to register the Grant of Probate with the province or state where the land or building is located. In the registration procedure, the Court in the other province or state adopts the information contained in the Probate application filed with the Alberta Court. This procedure is known as re-sealing the Grant. Re-sealing is generally easier than bringing an additional application for Probate in the other province or state.
One consideration in dealing with the re-sealing procedure is Probate fees. Provinces like British Columbia and Ontario have large Probate application fees. If you were fortunate to own a $1,000,000 cabin in British Columbia, your executor would pay roughly $14,000 in Court fees, in order to obtain the legal right to deal with that estate asset. Those fees would apply in British Columbia, whether you applied for Probate or for re-sealing. By contrast, in Alberta, the Court fees do not exceed $400.00 regardless the value of the estate.
Another consideration is the law regarding wills are different from province to province. For example, in Alberta, to be considered a common law spouse, you need to live with your spouse for 3 years (unless you have a child together). If you lived with someone for less than 3 years, there is no obligation to include provisions in your will to support that person. The factors to determine if you are a common law spouse in Saskatchewan are different. This may create a situation where a common law spouse may not have claim to Alberta estate assets (for support), but may be entitled to make a claim against Saskatchewan estate assets.
In Alberta, you are not legally required to leave estate assets to financially independent family members, meaning your healthy, working, adult children. In British Columbia, on the other hand, the law requires that your will provide for all your children. This is regardless of whether they are dependent upon you or if they are independent. This could provide different results for assets in Alberta and assets in B.C. An independent child may have a claim against your B.C. located assets, if you did not provide for them in your will.
There are additional tax implications if your estate assets include land or buildings in the U.S. The taxation systems of both Canada and the U.S. will come into play. Your accountant can provide you with more information about this issue.
My goal in writing about these issues is not meant to make you sell your foreign land and buildings and buy Alberta. When you consider the 3 decisions which go into your own estate plan, it is important to discuss with your lawyer the implications of land and buildings you own outside Alberta.