If You Die Without a Will, Here is What Happens
The great thing about having a Last Will and Testament is that it clearly spells out what happens to your estate upon your passing. Conversely, the terrible thing about not having this document in place when you die is that you have no control over how your assets are distributed, which may cause anguish and hardship to loved ones you would have otherwise chosen as beneficiaries.
When you die without a will, or intestate, Ontario’s Succession Law Reform Act (the “SLRA”) sets out how your estate is distributed. It provides that unless someone who is financially dependent on the deceased person makes a claim, the first $350,000 is given to the deceased person’s spouse.
A problem that immediately arises is defining the meaning of spouse. For the purposes of intestacy, the SLRA adopts the definition of spouse found in section 1 of the Family Law Act, which reads: “‘spouse’ means either of two persons who: (a) are married to each other, or (b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.”
As such, only married spouses are entitled to benefit under the intestacy regime. You may have had a long and loving common-law relationship with a person you regarded as a spouse, but if there is no formal wedding declaration, they could be denied the inheritance you wanted them to receive. A common-law spouse may potentially seek redress by making a dependant’s support claim against your estate, though it is an effort and expense that could have been avoided with a proper will.
If you have no spouse, your children will inherit the estate. Sounds simple enough, but again there may be an issue with the way in which the SLRA defines child, as it only accepts biological offspring or those who were adopted as children. With blended families, many people have developed loving and long-lasting relationships with their step-children. In the eyes of the SLRA, however, they are not given the same inheritance rights as biological and adopted children.
Things get a bit complicated from here. Allow me to summarize:
- If any children have died, that child’s children will inherit their share.
- If there is no spouse or children or grandchildren, the deceased person’s parents inherit the estate equally.
- If there are no surviving parents, the deceased person’s brothers and sisters inherit the estate.
- If any of the brothers and sisters have died, their children (the deceased person’s nieces and nephews) inherit their share.
- If there are no surviving brothers and sisters, the deceased person’s nieces and nephews inherit the estate equally. (If a niece or nephew has died, their share does not pass to their children.)
- When only more distant relatives survive (cousins, great-nieces or nephews, great aunts and uncles), the rules are complex and a lawyer’s advice is a good idea.
There are many other problems that arise with those who die intestate, such as deciding who will be executor and oversee the estate distribution. The closest relative is usually chosen by the courts for the position, which may mean that your children are in charge and not your common-law spouse, which could create tension and expensive legal battles.
If you have minor-age children and there is no other legal parent alive, the appointment of the guardian will be out of your control.
Perhaps you have promised your grandson that he will inherit your valued coin collection when you die. That probably won’t happen, since all assets of the estate will be valued and divided up under the SLRA rules. However, in a will you can leave specific instructions, directing who receives what items you are leaving behind.
You may feel indebted to a charity, church, or hospital for their work while you were alive, and you want to leave that institution some money. Again, that can’t happen without a will.
The final point to consider is that if you have no next-of-kin and you die without a will, your entire estate goes to the Ontario government, with the Office of the Public Guardian & Trustee stepping in to administer your estate and seize your assets.
Drawing up a Last Will and Testament is a simple way to avoid all these issues, saving anguish and needless paperwork when the time comes.
Thanks for reading, and have a great day!