Tag: intestate

21 Apr

If You Die Without a Will, Here is What Happens

Suzana Popovic-Montag Estate Planning, Wills Tags: , , , 0 Comments

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!

Suzana Popovic-Montag

08 Mar

Dying with a Double Life and Secret Wife

Arielle Di Iulio Common Law Spouses, Estate Litigation, Support After Death Tags: , , , , , , 0 Comments

Living a double life can be complicated. A double life that involves a secret second family can be especially complicated, both during the deceiver’s life and after their death. How is the deceiver’s estate to be divided as between his first family and his secret second family? What rights does the unmarried secret spouse in particular have in the deceased’s estate? The Supreme Court of British Columbia addresses these issues in its recent decision of Boughton v Widner Estate, 2021 BCSC 325.

Boughton concerns the Estate of Michael Gregory Widern. Michael was a known member of the infamous Hells Angels and died on March 9, 2017 by homicide. Michael left behind his married spouse, Sabrina, and their two children. He also left behind Sara – whom he had been seeing for roughly eight years unbeknownst to his wife – and their two children. While Michael was alive he spent time with both of his families, alternating between the two households. Sabrina had no knowledge of Michael’s second family until after he passed away.

Michael died without a last will and testament, leaving his estate to be distributed in accordance with the intestacy provisions set out in British Columbia’s Wills, Estates and Successions Act (“WESA”). In Boughton, Sara brought a claim against Michael’s estate seeking, amongst other things, a declaration that she is a spouse of Michael for the purposes of the WESA and is consequently entitled to a share of his estate. As such, one of the issues to be dealt with by the court was whether the WESA permits the division of an estate as between two individuals who were in concurrent, subsisting spousal relationships with the deceased at the time of death.

The honourable Justice Jennifer Duncan declared that Sara was a spouse for the purposes of the WESA. Section 2 of the WESA provides that two persons are spouses of each other if immediately before the deceased person’s death they were married to each other or they had lived together in a marriage-like relationship for at least two years. Justice Duncan found that on his death, Michael was still married to Sabrina and was also in a marriage-like relationship with Sara. Section 22 of the WESA states that if two or more persons are entitled to a spousal share of an intestate estate, they share the spousal share in the portions to which they agree or as determined by the court. Justice Duncan reasoned that this section clearly provides for more than one spousal share in the estate of an intestate. She also analyzed the legislative intent of section 22 and found that the intention of the Legislature was to continue to provide for individuals in a marriage-like relationship with an individual who was still married to someone else at the time of death. On this basis, Justice Duncan held that Sara was entitled to a declaration that she is a spouse of Michael as that term is defined in the WESA. It was further ordered that Sara and Sabrina were each entitled to half of Michael’s estate.

If this case were decided under Ontario law we would likely see a different result. Ontario’s Succession Law Reform Act (“SLRA”) has no provision equivalent to section 22 of the WESA which recognizes a “spousal share” in an intestate estate for someone other than the deceased’s married spouse. For purposes of intestate succession in Ontario, “spouse” has the same meaning as in section 1 of the Family Law Act (“FLA”), which is in essence a married person. It follows that an unmarried secret spouse would likely have no statutory entitlement to share in their deceased spouse’s estate. However, a secret spouse in Ontario could potentially claim an interest in their spouse’s estate pursuant to the dependent support provisions contained in Part V of the SLRA. In Part V, “spouse” has the same meaning as in section 29 of the FLA, which defines “spouse” more broadly as including persons not married to each other and have cohabited continuously for a period of not less than three years, or have children together and are in a relationship of some permanence. If a secret spouse meets this definition, they may still have a right to a portion of their deceased spouse’s estate by way of a dependent support claim.

Thanks for reading!

Arielle Di Iulio

12 Jun

Dealing with the Body: An Often Difficult Task Made More Difficult

Paul Emile Trudelle Estate Planning Tags: , , , , , , 0 Comments

One of the primary and often urgent duties of an Estate Trustee is to dispose of the deceased’s body. Often, issues arise with respect to the proper disposal of the deceased’s remains: how it is to be done, and by whom. These issues are exacerbated when the deceased dies intestate. No one has the immediate authority to make the necessary decisions.

The difficulties that can arise are illustrated in the companion decisions of Re Timmerman Estate, 2020 ONSC 3424 (CanLII) and Re Timmerman Estate, 2020 ONSC 3425 (CanLII).There, Marguerite died on October 16, 2019. She was survived by a daughter, Shannon and a son, Craig. Craig died shortly thereafter, on November 12, 2019. Both died without a will and with only nominal assets.

Marguerite’s sister (Craig’s aunt) applied for a Certificate of Appointment as Estate Trustee for both estates. However, she did not have Shannon’s consent or a Renunciation from Shannon, as required by the Rules of Civil Procedure. She applied to the court to dispense with these formalities.

There was evidence before the court that Marguerite wished to be cremated. Shannon objected to this. However, there was evidence that Shannon may have had capacity issues. After raising her objection to the cremations, Shannon appears to have disappeared.

The judge hearing the applications noted that the bodies had remained in a hospital morgue for over 7 months, a delay that was “unconscionable” and “intolerable”, and due for the most part to difficulties in contacting Shannon despite reasonable efforts.

The court granted the applications notwithstanding the lack of consent or a renunciation from Shannon, citing Rules 2.01 and 2.03, which allow a court to dispense with the strict compliance with the Rules of Civil Procedure where it was necessary and in the interest of justice. “It is in no-one’s interests to delay the administration of this estate and, hence, the removal of the bodies and their cremation or burial, because of Shannon Timmerman’s failure or inability to take any steps herself to address the need to attend to these formalities.”

In both estates, the court directed the Estate Trustee to make best efforts to bring the Certificate of Appointment to the attention of Shannon before the bodies were finally laid to rest. However, this requirement was not to unduly delay things further. If Shannon could not be located using best efforts, the Estate Trustee was to proceed with the disposal of the remains as she saw fit.

See here for our blog on The Duty to Dispose of the Body.

Thanks for reading.

Paul Trudelle

29 Jul

Who’s an Heir Under the Laws of Intestacy in Ontario?

Kira Domratchev Estate & Trust Tags: , , , , , 0 Comments

Most people know that if a person dies without a Will, the laws of intestacy govern the division of his or her estate. Specifically, it is Part II of the Succession Law Reform Act, RSO 1990, c S.26 (the “SLRA“) that is titled “Intestate Succession” that comes into play.

The question of who inherits where there is no Will is easily answered in some of the following scenarios:

  • Where there is a surviving spouse (limited to married spouses, by the way), said spouse is entitled to the entirety of the property of the deceased (section 45(1));
  • Where there is a surviving spouse and one child, spouse receives a preferential share of the estate of the deceased (i.e. $200,000.00 as of today) and if anything is left over, it is divided equally between spouse and child (section 46(1));
  • Where there is a surviving spouse and two or more children, the spouse is entitled to a preferential share of the estate of the deceased and 1/3 of what is left over. The remainder is then divided between the issue of the deceased (section 46(2)).

The SLRA further addresses how the division of assets is to take place where the only surviving relatives are parents, brothers and sisters and nieces and nephews (in respective order of preference). If the deceased has no surviving parents, brother/sisters or nieces/nephews, the next of kin provision (section 47(6)) applies.

Despite the fact that the SLRA attempts to bring clarity to the division of one’s intestate estate, it appears that certain situations may arise that would lead to confusion, absent case law that would provide some guidance.

In Farmer Estate v Karabin Estate, an executor of a niece who predeceased the deceased commenced an application in respect of her alleged share in the estate of the deceased. The Ontario Court of Appeal found that the SLRA is confined to nieces or nephews who do not predecease the deceased and does not extend to more remote issue. The Court of Appeal relied on section 47(4) of the SLRA which is worded as follows:

“Where a person dies intestate in respect of property and there is no surviving spouses, issue or parent, the property shall be distributed among the surviving brothers and sisters of the intestate equally, and if any brother or sister predeceases the intestate, the share of the deceased brother or sister shall be distributed among his or her children equally.” [emphasis added]

In interpreting this provision, the Court relied on the definitions of “child” and “issue” as defined in the SLRA, namely the definition of “child” includes a child conceived before and born alive after the parent’s death and the definition of “issue” includes a descendant conceived before and alive after the person’s death.

In another matter, Kiehn v Murdoch, the Ontario Superior Court of Justice found that grandnieces and grandnephews are excluded from sharing in the estate of a deceased by operation of section 47(4).

Unfortunately in the circumstances where a particular scenario arises that has not been clearly addressed by the SLRA and subsequent case law, an application for directions may need to be commenced to receive some clarity from the Court as to how a particular intestate estate is to be divided.

Thanks for reading!

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

Common Law Spouses in Ontario and Intestacy

Intestate Estates and Mortgage Insurance

Does exclusion of family as beneficiaries of your estate preclude intestate succession?

08 Jan

Home DNA Tests – Could you be disinherited by an unexpected result?

Stuart Clark General Interest Tags: , , , , , , , , , , , , , , , , , , , , , , , , , 0 Comments

One of the most gifted items this past holiday season were apparently the home DNA tests which can reveal your genetic ancestry or even if you are predisposed to certain health conditions. As anyone who has taken one of these tests (myself included) can tell you, the test results also contain a long list of other individuals who have also taken the test who you are related to, allowing you to reconnect with long lost relatives.

While my own test results did not reveal any family secrets, the same cannot be said for other individuals who have taken the test, as there have been a growing number of articles recently about how home DNA tests have revealed family secrets which otherwise may never have come to light. Although not all of these secrets are necessarily negative, such as finding a long-lost sibling, others, such as finding out that the individual who you believed to be your father was not in fact your biological father, could be life changing. For the latter, the phenomena is apparently common enough that the Atlantic has reported that self-help groups have formed around the issue, such as the Facebook group “DNA NPE Friends”, with “NPE” standing for “Not Parent Expected”.

In reading through these stories I couldn’t help but wonder if having such a result could impact your potential entitlements as a beneficiary of an estate. What happens if, for example, the individual who you previously believed to be your biological father but the test reveals was not in fact your father should die intestate, or should leave a class gift to his “children” in his Will without specifically naming the children. Could finding out that you were not actually biologically related to your “father” result in you no longer being entitled to receive a benefit as a beneficiary? Could you potentially be disinherited as a beneficiary of an estate by voluntarily taking a home DNA test if your right to the gift is founded upon you being related to the deceased individual?

Who is legally considered an individual’s “parent” in Ontario is established by the Children’s Law Reform Act (the “CLRA“). Section 7(1) of the CLRA provides that, subject to certain exceptions, the person “whose sperm resulted in the conception of a child” is the parent of a child. Section 7(2) of the CLRA further provides for a series of presumptions regarding the identity of the individual’s “whose sperm resulted in the conception of a child“, including, for example, that there is a presumption that such an individual is the birth parent’s spouse at the time the child is born, or the individual in question certified the child’s birth as a parent of the child in accordance with the Vital Statistics Act (i.e. signed the birth certificate). To the extent that there are any questions about parentage, section 13(1) of the CLRA provides that any interested individual may apply to the court at any time after a child is born for a declaration that a person is or is not the legal parent of the child.

In applying these presumptions to our previous questions about the home DNA test, if, for example, the individual who you previously believed was your biological father was your birth mother’s “spouse” at the time you were born, or signed the birth certificate, it would appear that, subject to there being a declaration under section 13(1) of the CLRA to the contrary, there would continue to be a presumption at law that the individual who you previously believed to be your biological father would continue to be your legal “parent” in accordance with the CLRA. To this respect, in the absence of a formal declaration under section 13(1) of the CLRA that the individual was no longer your legal “parent”, there would appear to be an argument in favour of the position that the individual who you previously believed to be your biological father would continue to be your legal “parent”, and that you should continue to receive any benefits which may come to you as a “child” on the death of your “father”, whether on an intestacy or a class bequest to his “children” in his Will.

This presumption, of course, is subject to the ability of any interested person (i.e. the Estate Trustee or one of the other beneficiaries) to seek a formal declaration under section 13(1) of the CLRA that you were not in fact a “child” of the individual you believed to be your biological father. If such a formal declaration is ultimately made by the court, you would cease to be the legal “child” of the individual who you previously believed to be your biological father, and would likely lose any corresponding bequests which may have been made to you on an intestacy or as a member of the class “children” in the Will.

The use of DNA tests to establish the potential beneficiaries of an estate is not a new phenomenon (see: Proulx v. Kelly). What is new, however, are people voluntarily taking such tests en masse in a public forum, potentially voluntarily raising questions about their rights to receive an interest in an estate when such questions would not have existed otherwise.

Thank you for reading.

Stuart Clark

18 Jun

When is it Appropriate to Extend the Time Granted in Favour of Equalization under the Family Law Act?

Kira Domratchev Estate & Trust, Litigation Tags: , , , , , , , , , , 0 Comments

Applications for an extension of time (beyond six months from date of death) to elect under the Family Law Act (“FLA”) are regularly brought before the Court. Decisions with respect to that are often dealt with by way of short endorsements.

Justice Dunphy, in Aquilina v Aquilina, 2018 ONSC 3607, a recent court decision, made some interesting comments regarding applications for an extension of time in such circumstances.

Background

The Deceased passed away in December, 2017, leaving the Applicant (his wife) and their three adult children. The Applicant was primarily a homemaker and as such, her level of information regarding the family financial affairs was imprecise. The Estate was not a simple one to administer, in part due to a number of business interests the Deceased had in the family’s native country, Malta, held through various corporations, real estate holdings and an active business.

At the time of the hearing, the Estate did not have an administrator. It was determined that the Deceased did not leave a Will.

Statutory Regime

The Applicant in this matter had two options – making a claim under the Succession Law Reform Act (“SLRA”) or the FLA.

Under the SLRA, in the event of an intestacy, the beneficiaries of the Deceased’s estate are the Applicant and their three adult children. Under s. 46(2) of the SLRA, where there is no Will and there is more than one child of the Deceased, the surviving spouse is entitled to 1/3 of the Estate plus the “preferential share” prescribed by s. 45 of the SLRA.

In contrast, s. 5(2) of the FLA provides that the surviving spouse will receive 1/2 of the difference between the value of the net family property of each of the spouses where the Deceased had the higher of the two amounts.

The Applicant has a period of six months from the date of death to make the election as per s. 6(10) of the FLA. Absent an election, the surviving spouse takes under the SLRA.

Criteria for Extension

The Applicant requested that the court: (i) extend the time to make an election until two years from the date of the application; (ii) extend the time for the deemed election to the same date; and (iii) extend the time during which distributions from the Estate are suspended until the same date.

In making a finding, the Court must consider:

  1. Whether there are apparent grounds for relief;
  2. Whether delay, if any, was incurred in good faith; and
  3. Whether anyone will be substantially prejudiced by the delay.

It is important to note, that the surviving spouse does not have to have precise and accurate information but that he or she must have sufficient information to make an informed choice. Justice Dunphy noted that extensions are intended to be the exception and not the rule.

Analysis and Decision

Justice Dunphy held that it was going to take a period of time – very likely a year or more – to be able to gather the facts necessary to understand the value of this Estate and the Applicant’s intersecting interests within (meaning the consequences flowing from her different roles as a shareholder, widow and spouse). Therefore, Justice Dunphy held that there are some grounds for relief in the circumstances of this case.

In considering whether there was any delay that was not incurred in good faith, though Justice Dunphy noted that the Application was brought very close to the six month anniversary of the Deceased’s date of death, he placed weight on the fact that the death was “sudden, unexpected and shocking” and the relative complexity of the Estate. He held that the delay was incurred in good faith.

Justice Dunphy found that there would be no substantial prejudice in this case if an election was granted because the only other beneficiaries of the Estate are the three adult children of the Deceased and the Applicant, who confirmed that they did not oppose the motion. He did balance against that finding, however, the inherent prejudice in having all or a substantial portion of the Estate frozen. In making this consideration, Justice Dunphy found that any prejudice in this matter was slight.

Based on the facts, Justice Dunphy held that more time would be required to consider the rights of the Applicant, as the surviving spouse, under the SLRA as compared to the FLA. As such, he granted the Applicant all the relief sought, but reduced it to one year from the date of the Application instead of the two years that the Applicant was seeking.

Thanks for reading.

Kira Domratchev

Find this blog interesting? Please consider these other related posted:

Lundy v Lundy Estate: Delay in Seeking Extension to Make Family Law Act Election

Revoking a Family Law Act Election

Family Law Elections: Inclusion/Exclusion of Assets in the Net Family Property of the Deceased

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