WESA Tips and Traps: Mandatory Hold Period


One of the changes made in B.C.’s Wills, Estates and Succession Act (WESA) (coming into effect 9 weeks from now, on March 31) relates to the mandatory period that an estate executor must wait before distributing assets. It looks innocuous, but the effects of this change may come as a surprise to some people when encountered in practice. 

Currently, the only hold period restriction set out in section 12 of the Wills Variation Act (WVA). This section says an executor of a will must not distribute estate assets to beneficiaries until 6 months after the issue of a grant of probate, unless they have consent of all persons entitled to apply under the WVA, or a court order authorizing distribution.

Section 12 of the WVA was recently considered in the case of Stevens v. Wood Estate in which the executor had distributed to beneficiaries prior to the expiry of the hold period. The Court held that the appropriate remedy was to require her to personally repay the distributed funds. 

When WESA takes effect, section 12 of the WVA is replaced by section 155 of WESA. The key changes are summarized in this table: 

WVA Section 12 WESA Section 155
Applies only to executors of wills Applies to administrators of intestate estates and executors of wills
Hold period is 6 months Hold period is 210 days
Requires consent only of persons entitled to apply under the WVA, namely spouse and children of the deceased. Requires consent of all beneficiaries named in any will and consent of all next of kin who would be entitled to a share in the estate if there was no will (even if there is a will and they are not beneficiaries).
No extension of hold period if litigation commenced (though executors generally would not distribute if a WVA action was outstanding). Hold period extended indefinitely if estate litigation proceedings are outstanding.

The WESA provision extends the protection formerly given to potential claimants under the WVA to essentially include all persons who might wish to raise a claim about an estate, for example a next of kin wanting to contest the validity of a will based on undue influence. Therefore when beneficiaries want an early distribution (as they tend to), the executor will need to obtain consent from a broader group of people than the law formerly required. In many circumstances it will be impossible or impractical to get consent from all beneficiaries and all next of kin, many of whom might be receiving no benefit and therefore may not be inclined to co-operate.

This provision will be even more troublesome for executors in cases where a grant of probate is not required. For example, if the estate assets consist only of private company shares and personal belongings, the assets can be transferred or sold without a grant of probate (and without probate fees). However, if no grant is obtained, the section 155 hold period will not begin to run. The executor will have to choose between (i) applying for a grant (paying probate fees) and then waiting 210 days, (ii) seeking all required consents, or (iii) applying to the court for an order permitting distribution.

It will be interesting to see how these new provisions end up playing out in the context of estates later in 2014.