Will - Distribution of Assets / Inheritance
Will - Updating Will - Invalid or No Will - Power of Attorney - Personal Directive
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
A will serves as the primary legal blueprint for the orderly distribution of an individual’s estate (inheritance), governed largely by the Wills and Succession Act (Alberta). Without a valid will, a person is said to die intestate, meaning the provincial government’s default formulas dictate who receives what, often regardless of the deceased’s personal preferences. A valid will allows the testator to clearly identify their assets (ranging from real estate and bank accounts to sentimental personal effects) and designate specific "beneficiaries" to receive them. By formalizing these wishes, the testator ensures that their hard-earned wealth supports the people or causes they value most. This proactive step provides a sense of certainty and control over one's legacy in an otherwise unpredictable time.
One of the most critical functions of a will in Alberta is the appointment of a Personal Representative, formerly known as an executor. This individual is tasked with the monumental responsibility of gathering assets, paying off the deceased's debts, and filing final tax returns with the Canada Revenue Agency (CRA) before any inheritance is distributed. Choosing the right person is vital, as they must navigate the probate process, which is the court’s validation of the will. Without a clear appointment in a will, the court must appoint an administrator, which can lead to family disputes and significant delays in the distribution process. A well-drafted will empowers the representative with specific instructions, reducing the administrative burden and potential for confusion.
When distributing assets, a testator must be acutely aware of dependant’s relief claims, which are a major consideration under Alberta law. While Albertans generally enjoy testamentary freedom, the law imposes a moral and legal obligation to provide "adequate support" for certain family members. This includes a legal spouse or adult interdependent partner, as well as minor children or adult children who cannot support themselves due to physical or mental disability. If a will fails to provide sufficiently for these dependants, the court has the power to override the will and redistribute the estate to ensure their needs are met. Consequently, estate planning must balance personal desires with these mandatory legal obligations to avoid costly litigation.
Concerns often arise regarding the complexity of different asset types, specifically those that may bypass the will entirely. In Alberta, assets held in joint tenancy with a right of survivorship or those with named beneficiaries, such as RRSPs, TFSAs, and life insurance policies, typically go directly to the survivor or nominee. This can lead to unintended consequences if the will is not synchronized with these outside-the-will designations. For example, a testator might intend to split their total wealth equally among three children, but if most of the value is in a joint account with only one child, the others may be effectively disinherited. Ensuring that the will and designated beneficiary forms work in harmony is essential for a fair and intended outcome.
The impact of taxes and the costs of the probate process itself must be factored into any distribution strategy. While Alberta does not have a death tax or inheritance tax in the traditional sense, the deceased’s estate is responsible for paying income tax on any deemed disposition of assets at the time of death. This can result in a significant tax bill, particularly for secondary properties or non-registered investments, which might necessitate the sale of assets the testator hoped to keep in the family. Additionally, while Alberta’s probate fees are relatively low compared to other provinces, the legal and accounting fees associated with settling a complex estate can be substantial. Proper planning within the will can include provisions for these costs, ensuring that the net value reaching the beneficiaries remains as high as possible.
Our law firm can help you plan for the future, including the preparation of a well-drafted will and other estate planning documents, as well as dealing with the legal demands associated with the passing of a loved one. We welcome you to contact our law firm today at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
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