On June 1, 2015, the Estate Administration Act came into force in Alberta.
This new legislation updates and modernizes the approach taken to the administration of the estates of deceased persons in Alberta. It is the third significant update to this general area of the law. In 2012, the Wills and Succession Act modernized the law governing the making of wills and the default rules that apply when you die without a will. Before that, the Adult Guardianship and Trusteeship Act was brought into force in 2019, creating a new approach to adults who have a diminished capacity to care for themselves or manage their financial affairs.
Among the most important changes in this legislation are the new duties and tasks assigned to the “Personal Representative”. (A Personal Representative is most commonly the executor appointed by a Will. It also includes, however, a person appointed by a Court to administer an estate where there is no Will or where a Will does not appoint an executor.)
The 3 duties of the Personal Representative are to perform his or her role:
- honestly and in good faith;
- in accordance with the intentions of the testator (the maker of a Will) and the Will, if a valid Will exists; and
- with the care, diligence and skill that a reasonable and prudent person would exercise in comparable circumstances where a “fiduciary” relationship exists. (A fiduciary relationship is a relationship of the utmost good faith.)
There are 4 core tasks for the Personal Representative set out in the new legislation:
- To identify the estate assets and liabilities;
- To administer and manage the estate;
- to satisfy the debts and obligations of the estate; and
- to distribute and account for the administration of the estate.
Neither the duties nor the key tasks are new; they have been well established for many years. But they now appear up front in the legislation, in order to set clearer and more consistent expectations for the Personal Representative.
The most important new feature of the new legislation is a requirement for the Personal Representative to give written notice to certain persons even when administering an estate without a grant of probate or administration issued by a Court. A notice is required to be given to 4 types of persons:
- To the beneficiaries, specifying (among other things) the gifts left to them.
- To any family member of the deceased who may have a potential claim against the estate because the family member has not been adequately provided for under the Will. (For example, this could involve a family member, such a spouse, who was dependent on the the deceased at the time of death.)
- To a spouse, notifying him or her of rights under the Matrimonial Property Act, if the spouse was not the sole beneficiary under the Will.
- To persons acting as trustees or guardians for adults, and to the Public Trustee with respect to any minor who is interested in an estate.
These kinds of notices have been required for many years in estates that are being administrated through the authority of a grant of probate or administration. The new feature is that they are now required even when informally administering an estate.
This new law has the goal of simplifying and clarifying the manner in which estates are to be administered. However, it is also abundantly clear now that Executors will be held to the same high standard of conduct and performance whether or not the estate is being administered informally (outside of the Courts) or with a formal grant of probate. Proceeding with legal advice is now more important than ever.