How do I sell a business after the owner dies in British Columbia?

In British Columbia, the Wills, Estates and Succession Act (WESA) calls the person who administers a deceased owner’s estate the personal representative, and it sets that person’s authority. WESA’s representation grant includes a grant of probate of a will and a grant of administration, with or without will annexed. It also affects the timing of any payout from a sale. For how shares in a corporation and the federal tax duties are handled, see whether an executor has authority to sell a family business. This page covers British Columbia only. If the owner lived elsewhere, check the rules where the estate is being settled.

Authority and vesting

Under WESA s. 142, a personal representative has the same authority over the estate as the deceased person would have if living, subject to a contrary intention appearing in the will and to WESA or any other enactment. Under WESA s. 102, the estate vests in the court if the estate is intestate or the will names no executor, and it vests in the personal representative when that person assumes or is appointed to the office. Under WESA s. 136, a representation grant gives the personal representative exclusive authority to administer the estate, or the part of it the grant applies to, in accordance with its terms, so a buyer may ask to see the grant.

If the executor has not applied

If an executor named in a will does not apply for a grant of probate, WESA s. 108 lets any person interested in the estate require the executor, under the Supreme Court Civil Rules, to accept or renounce probate, or to explain why administration should not be granted to the executor or to another person willing to act. Ask an estate lawyer who can sign a sale while no grant has been issued.

The 210-day distribution rule

Selling is one step and paying out is another. Under WESA s. 155, and subject to that section, the personal representative must not distribute the estate within 210 days following the date the representation grant is issued, except by order of the court. Where there is a will, WESA s. 155 also lets the personal representative distribute within that period with the consent of all beneficiaries who have an interest in the estate and all persons who may start a wills variation proceeding; where there is no will, the consent needed is that of all intestate successors entitled to a share. WESA s. 155 sets other exceptions too, and after the 210 days a distribution still needs the court’s consent if certain proceedings have been started. Ask an estate lawyer how this applies to sale proceeds.

Fees and tax clearance

Under Probate Fee Act s. 2, and subject to the exemptions in s. 2(2), the personal representative must pay a probate fee to the government before the grant is issued. For federal tax, the CRA says the legal representative is typically the executor named in the will. Under Income Tax Act s. 159(3), a legal representative (other than a trustee in bankruptcy) who distributes property without the clearance certificate required by s. 159(2) is personally liable for the amounts covered, to the extent of the value of the property distributed.