Inheritance Process in Alberta
Posted by on May 21, 2023 in Blog, Wills & Estate
Losing a loved one is a difficult time, and the inheritance process can add to the stress and confusion.
The process of inheritance in Alberta involves several steps, including probate, distribution of assets, and tax implications.
In this article, we will discuss each of these steps and what you need to know about the inheritance process in Alberta.
What is Probate?
Probate is the legal process that establishes the validity of a deceased person’s will and gives the executor of the estate the authority to manage and distribute assets.
In Alberta, probate is mandatory for most estates, with a few exceptions, such as small estates valued at less than $25,000.
The probate process involves several steps:
1. Filing a Probate Application
The executor files a probate application with the Surrogate Court in the jurisdiction where the deceased person lived.
The application includes the original will, a death certificate, and other supporting documents.
2. Appointment of an Executor
The Surrogate Court appoints the executor named in the will or a substitute executor if the named executor is unable or unwilling to serve.
3. Notice to Beneficiaries
The executor must notify all named beneficiaries and any other interested parties of the probate application.
4. Review of the Will
The Surrogate Court reviews the will to ensure it is valid and meets the legal requirements for a will in Alberta.
5. Issuance of a Grant of Probate
If the will is valid, the Surrogate Court issues a Grant of Probate, which gives the executor the authority to manage and distribute the assets in the estate.
How Long Can the Process Take?
The length of the probate process in Alberta can vary.
Typically, the process takes between 6 and 18 months, although it can take longer for larger or more complex estates.
Factors that can affect the length of the process include:
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The size and complexity of the estate: Larger estates with multiple assets and debts may take longer to probate.
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Disputes among beneficiaries: If beneficiaries contest the will or dispute the distribution of assets, the probate process can be delayed.
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Court workload: The Surrogate Court has a backlog of cases, and the probate process can be delayed if the court is busy.
It’s important to note that beneficiaries do not receive their inheritance until the probate process is complete, which can cause financial hardship if the process is delayed.
What Happens After Probate?
After probate is complete, the executor is responsible for distributing the assets in the estate to the beneficiaries.
The distribution of assets can take several forms, including:
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Direct transfer of assets: The executor can transfer assets directly to the beneficiaries, such as real estate or bank accounts.
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Sale of assets: The executor may need to sell assets, such as stocks or vehicles, to pay off debts or distribute the proceeds to the beneficiaries.
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Creation of a trust: The executor can create a trust to manage assets on behalf of minor or disabled beneficiaries.
The executor must follow the instructions in the will when distributing assets and must ensure that all beneficiaries receive their share of the estate.
If there are disputes among beneficiaries or questions about the distribution of assets, the Surrogate Court can provide guidance or make a decision.
Beneficiaries in Alberta
Under Alberta law, anyone can be a beneficiary of a will, including spouses, children, parents, siblings, friends, or charities.
However, if a person dies without a will (intestate), the distribution of assets is determined by Alberta’s Intestate Succession Act.
The act specifies a hierarchy of beneficiaries, with spouses and children receiving priority.
Beneficiaries have certain rights and responsibilities during the inheritance process, including:
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The right to receive their share of the estate: Beneficiaries are entitled to their share of the estate as specified in the will or by Alberta law.
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The right to contest the will: Beneficiaries can contest the validity of the will or challenge the distribution of assets if they believe it is unfair or incorrect.
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The responsibility to provide information: Beneficiaries must provide the executor with any information or documentation necessary to distribute the assets, such as bank account information or identification.
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The responsibility to pay taxes: Beneficiaries may be responsible for paying taxes on any income earned from their share of the estate.
Tax Implications of Receiving an Inheritance in Alberta
Receiving an inheritance in Alberta can have tax implications for both the beneficiaries and estate planning.
Here are some tax-related considerations to keep in mind:
Estate Taxes
The estate may owe taxes on income earned after the person’s death, such as interest or dividends.
The executor is responsible for filing the deceased person’s final tax return and paying any outstanding taxes.
Capital Gains Taxes
If assets are sold after the deceased person’s death, the estate may owe capital gains taxes on any increase in value since the original purchase.
The beneficiaries may also owe capital gains taxes if they sell inherited assets for more than their fair market value at the time of the deceased person’s death.
Income Taxes
Beneficiaries may owe income taxes on any income earned from their share of the estate, such as interest or rental income.
It’s important to consult with a tax professional to understand the tax implications of receiving an inheritance and to minimize your tax liability.
Get Professional Help to Navigate the Inheritance Process in Alberta
Navigating the process of inheritance in Alberta can be a daunting task, especially during a difficult time of mourning.
However, with a basic understanding of the probate process, beneficiaries’ rights, tax implications, and the help of a qualified professional, the process can be much more manageable.
If you need assistance with the inheritance process, it’s important to contact a trusted legal firm like Heritage Law to ensure you understand your rights and obligations and to receive the guidance you need to make informed decisions.
Don’t hesitate to reach out for help to make the process as smooth and fair as possible.
