While the estates of non-Indigenous Canadians are governed by provincial law, the estates of Indigenous peoples living on reserve are normally administered pursuant to the federal Indian Act. If no family member or close friend is able and willing to act as administrator of the deceased’s estate, Indigenous Services Canada (“ISC”) may step in and administer the estate.

In a recent court decision, Mitchell v. Canada (Indigenous Services), 2024 FC 148 [Mitchell], in which our firm represented some of the children of the deceased,  one of ISC’s estate administration practices was challenged.

When administering an estate, ISC applied a presumption that on-reserve property had negligible value, unless it was subject to a registered lease. In a situation where there was no Will and the deceased was survived by a spouse and children, ISC’s presumption could have a dramatic effect.

Since the spouse would be entitled to a $75,000 priority share of the estate pursuant to section 48(1) of the Indian Act, the entire estate might pass to the spouse, even if the true value of the land was actually substantial – meaning the spouse would receive assets truly valued at far more than the $75,000 priority share set out in the Act.

In Mitchell, Susan Joe (the “deceased”), a member of Okanagan Indian Reserve No.1, had passed away with an estate consisting of interests in several pieces of on-reserve land. The deceased was survived by her spouse and her children. Following the deceased’s death, it was determined that she had died without a valid will, meaning that her spouse would be entitled to the $75,000 priority share of her estate, with any remainder shared between the spouse and the deceased’s children.

An ISC Officer was appointed as administrator of the deceased’s estate. The ISC Officer refused to value the on-reserve land and instead advised the deceased’s children that, using the presumption that on-reserve land had negligible value, the estate was worth less than $75,000, and so the spouse’s priority share would consume the entire estate.

The deceased’s children successfully requested the Court to overturn ISC’s refusal to value the land. The Court held that ISC’s practice of attributing negligible value to on-reserve property was unreasonable, and that there was nothing in the Indian Act or associated regulations and policies which prevented the ISC from actually valuing the on-reserve land. ISC was ordered to value the on-reserve land and report that to the children.

If you have questions about including on-reserve property in the Will of an Indigenous person, administering the estate of an Indigenous person, or contesting a Will, contact a member of our Wills and Estates team – we are here to help.