Executors should be aware of required waiting periods before distributing estate assets and further complications caused by the suspension of limitation periods in response to COVID-19.
On March 26, 2020, in response to the COVID-19 pandemic, the government suspended certain limitation periods to commence court proceedings in British Columbia. The suspension was lifted exactly one year later, on March 25, 2021. In this article, we discuss some implications of the suspension of limitation periods for the distribution of and potential claims against estates in British Columbia.
The suspension of limitation periods was effective to suspend the running of the 180 day time period for bringing a claim for maintenance from an estate. However, because the suspension of limitation periods only applied to time limits for commencing court proceedings, it did not affect the 210-day waiting period for the distribution of estates. As such, if a representation grant was obtained shortly before or during the suspension of limitation periods, the 210-day waiting period may elapse before the time limit for commencing a claim for maintenance from the estate runs out.
The 210-Day Waiting Period
The Wills, Estates and Succession Act (“WESA”) provides that personal representatives (es executors are referred to in WESA) must not distribute the estate of the deceased person within the 210 days following the date of the issue of a representation grant except by order of the court. If a personal representative intends to distribute estate assets before the 210-day waiting period has elapsed, they may be able to do so by obtaining the consents from all beneficiaries who have an interest in the estate and those entitled to make a claim for maintenance from the estate. The personal representative may also distribute the estate before the 210-day waiting period elapses if they obtain a court order allowing them to do so.
If a personal representative distributes estate assets before the 210-day time period expires without obtaining the necessary consents or court order, the personal representative may, if a claim is later brought against the estate, be personally liable to repay the full amount of the distribution of the estate.
The 180-Day Limitation Period for Claims for Maintenance from the Estate
The purpose of the 210-day waiting period is to allow potential claimants to bring claims against the estate before estate assets have been distributed. The most common claim is a claim for maintenance from the estate, which is often referred to as a “wills variation”. A claim for maintenance from the estate may be brought by the deceased person’s spouse or children if they believe that the deceased’s Will does not make adequate provision for them. If the court allows such a claim, the court may vary the terms of the deceased’s Will to order that the provision that the court thinks adequate, just and equitable in the circumstances be made out of the Will-maker’s estate for the spouse or children.
In accordance with section 61 of WESA, a claim for maintenance from the estate must be commenced within 180 days from the date the representation grant is issued. The claim must be served on the executor of the estate no later than 30 days after the expiry of the 180 day period. Distribution of an estate is prohibited when a proceeding for maintenance from the estate has been commenced.
Consequences of Suspension of Limitation Periods for Distribution of and Claims against Estates
The 180-day limitation period followed by the 30-day period for service totals 210 days. This means that, under normal circumstances, the 210-day waiting period and the time period for commencing and serving a claim for maintenance from the estate will expire at the same time. However, the suspension of limitation periods during the COVID-19 pandemic has created a somewhat contradictory situation for personal representatives, where the 210-day waiting period may expire before the limitation period for commencing a claim for maintenance from the estate runs out.
If a personal representative distributes estate assets after the 210-day time period but before the expiry of the limitation period, as extended by the suspension, they should be aware that the estate may be exposed to potential claims being brought at a later date and the personal representative may, if a claim is later brought, be personally liable to repay the full amount of the distribution of the estate.
Extended Limitation Periods for Claims for Maintenance from an Estate
If a representation grant was issued prior to the suspension and the limitation period would have expired during the suspension, the effect of the suspension is to add 1 year to the expiry date of the limitation period. For example, if the limitation period would have expired on June 1, 2021, the limitation period now expires on June 1, 2022. If a representation grant was issued during the suspension, the limitation period did not start to run until March 26, 2021. For example, if a representation grant was issued on June 1, 2020, and the limitation period started running on March 26, 2021, the limitation period now expires on September 22, 2021.
Personal representatives need to be aware of the suspension and the subsequent resumption of limitation periods as it relates to their administration of an estate. Personal representatives should be alive to their potential exposure to liability should they distribute an estate before the limitation period for claims for maintenance from an estate has elapsed. It is also important that beneficiaries and other potential claimants be aware of the extended limitation period so they do not miss the time period in which to bring a claim against an estate.
If you have any questions about estate planning, administration or litigation, EKB’s experienced team of Wills and Estates practitioners would be pleased to assist you. Please contact Allison Sharkey for more information.
This article was authored by Associate Allison Sharkey and Designated Estates Paralegal Alina Nuttall.
The content of this article is provided for general information purposes only and does not constitute legal or other professional advice or opinion of any kind. Users of this article are advised to seek specific legal advice by contacting members of Edwards, Kenny & Bray LLP.