Estates

When a relationship ends or a person dies leaving wealth of any nature, the division of the wealth is affected by the law in sometimes unexpected ways — ways not intended by the property owner. A parent's and grandparent's concern about their wealth going to the benefit of unintended ex-spouses is allayed by new law in British Columbia.

In BC, the law of wills and inheritances was changed by the Wills, Estates and Succession Act (WESA) and went into effect on March 31, 2014. The Act modernizes BC's wills and estates legislation. The Act changes how wills are interpreted, and in very limited circumstances, may accept flexibility in form and content, such as an electronic will.

A significant change is that the new Act does not revoke a person's will on saying, "I do" when getting married. A will revoked by marriage before March 2014 under the old law remains revoked and is not revived by the new law. For the vast majority of situations, there is no need to revise a will as a result of the WESA.

A will made before March 2014 is still valid so it does not have to be rewritten. Nevertheless, those who have a will should review it with a lawyer to be certain that the Act does not impact his or her will adversely.

The Impact Of WESA On Common-Law Partners

The other change the WESA has brought is the broadened definition of a "spouse" to align with the definition in the Family Law Act, which now includes common-law spouses. The Family Law Act's property division terms apply to common-law spouses to give them the same rights in "family property" as married couples, unless they have a property protection in a cohabitation agreement.

BC law previously upheld common-law couples' decisions to maintain separate property. Married couples are presumed to have committed to unity of property and economic partnership per the expression, "Get married and kiss half your assets goodbye" in the event of a divorce. Common-law spouses in BC now have the same economic merger.

WESA's Impact On Inheritances

Inheritances are specially protected in the Family Law Act as "excluded property," and so are not at risk of being equally shared with the beneficiary's spouse, except as to the increase or gain on the inherited funds or properties' value accrued during the couple's relationship. The "excluded property" exclusions include:

  • Property acquired before or after the relationship
  • Gifts or inheritances
  • Damage awards and insurance proceeds with some exceptions
  • Some kinds of trust property

The increase in value of the "excluded property" is divisible unless the beneficiary can prove that it would be clearly unfair to divide the value gain equally.