Handling Estate Assets that are Outside of BC
Individuals often own property in many jurisdictions, not just in British Columbia. Or, the testator (or will maker) may be living in different jurisdictions throughout the year. Generally speaking, probate ought to occur in the jurisdiction most closely connected with the testator. However, beginning probate or litigation in BC has advantages such as favourable wills variation laws.
A court in BC will typically not have jurisdiction over foreign real estate. It will be difficult to pursue some assets that are outside BC. The party challenging the distribution of the assets may have no choice but to start similar lawsuits in the jurisdiction(s) where the testator holds assets. Some jurisdictions recognize a will or a grant of probate from BC, while others require a separate probate process.
Tax implications are another important consideration when dealing with foreign assets. Some countries impose estate or inheritance taxes, which could impact the value of the estate and the final distributions to beneficiaries. Additionally, capital gains taxes may be triggered when selling foreign assets. Canada has tax treaties with certain countries that aim to prevent double taxation, but estate executors should carefully assess these tax obligations to avoid unnecessary financial burdens.
To mitigate these complexities, testators holding assets in multiple jurisdictions should consider proactive estate planning strategies.
1. In some cases, having multiple wills—one for BC and separates ones for each jurisdiction with significant assets—can help reduce legal conflicts and administrative delays. A BC will can govern assets within the province, while a second will can cover assts in another country, preventing delays and conflicts. It is critical that your lawyers in both jurisdictions work together to ensure that the BC will does not revoke the foreign will, or vice versa, where multiple will planning strategies are being used.
2. Have foreign assets pass outside the estate by adding the name of a beneficiary to title. This can be done through joint tenancy with the right to survivorship, meaning the asset automatically transfers to the surviving owner upon death. It may also be through the establishment of a trust. A trust can provide control over asset distribution, reduce estate taxes, and protect assets from legal disputes. Joint ownership, however, is one of the most litigated areas of estates, so it is important to ensure that any joint tenancy planning is done with the advice of your lawyer and accountant.
3. A testator can transfer ownership during his or her lifetime by gifting assets before death or restructure ownership to help avoid probate. However, this may trigger tax consequences such as capital gains, depending on the jurisdiction.
Note that the local laws of the foreign jurisdiction must be considered to ensure the efficiency of these strategies. It is advisable to consult estate planning professionals who can help minimize tax liabilities and ensure that assets are distributed according to the testator’s wishes without unnecessary legal complications.
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Written by Emily Anderson, Albert & Co. Law LLP, March 28, 2025.
© Albert & Co. Law LLP. The contents of this article do not constitute legal advice. Readers should seek legal advice in relation to their own specific circumstances.