June 15th 2021
When you pass away, it is important that you do not leave your loved ones with doubt or disagreement about your estate. Having a will prepared before you pass offers important predictability to who will be responsible for managing your estate and who will benefit. Without a will, you are said to die intestate. When you die intestate, your estate is governed by the rules under the Succession Law Reform Act (“Act”). The Act deals with the rights of family members to a deceased person who dies intestate. This article will review a few common scenarios and situations that show how dying intestate may result in surprises to the distribution of your estate for family members.
The first person that comes to mind when an individual passes away is the surviving spouse. In a situation where a person is married and there are no children, the married spouse inherits the entire estate. There are two important points regarding this rule. First, unmarried couples and common law spouses do not have the same automatic rights as married couples. Instead, a common law partner would have to make a legal Application for unjust enrichment or a claim of dependency against the estate of their intestate partner to be awarded any portion of the estate that was not held jointly. There is also a time restriction of 6 months from the Certificate of Appointment of an Estate Trustee being issued. Litigation is an unfortunate situation for a grieving partner to find themselves in, so it is important to know how the Act may impact you if you are unmarried. A second point is that marriage revokes any previously drafted will. This means that you will pass away intestate unless a new will is prepared. As the following paragraph explains, children and grandchildren will impact the rights of surviving spouses, which for the purposes of the rest of the article means a married spouse.
Children of an intestate parent will also have rights under the Act. Their share will depend on the value of the estate and whether there is a spouse and other siblings who also have rights. In a situation where the estate value is less than $350,000.00, a surviving spouse will inherit the entire estate. This amount is known as the “preferential share”, and where a couple has one child, a spouse receives the preferential share while the remaining value of the estate is split equally with the child. If there are two or more children, the surviving spouse receives the preferential share and one-third of the remainder of the estate, with the other two-thirds being divided equally among the children. If there is no spouse, children, or grandchildren, the Act looks to divide the estate among surviving parents first, then among siblings, then nephews and nieces, and then finally more remote next of kin.
The issue of passing away without a will and the risk of disputes among family members means that it is critical that a properly drafted will be prepared. The best time to draft a will is when you are healthy, because it is impossible to plan for all of life’s variables. For your estate planning and will drafting needs, be sure to contact Liddiard Law.
Michael Liddiard, BA MA JD