Death is not a subject that people like to think or talk about. Regardless of whether you think this is a taboo subject or not, if you don't prepare your Will, then you are dying intestate, which means you have died without a Will. Without a Will, you have no say in who administers your estate or what happens to your assets. Effectively, you have handed the decision of what should happen to your assets upon your death to the government.
When you die intestate:
- Provincial laws dictate who gets what. Each province has its own intestacy laws, which will distribute your estate in the manner the government sees fit.
- Under the provincial laws, your spouse is not automatically entitled to inherit all of your assets.
- You will pay more taxes when you die. The easiest way to defer tax on death is to leave all your assets to your spouse. Dying intestate won’t allow this.
- There are inevitable delays when you die intestate. Dying without a Will means that the Court will have to appoint someone as Estate Trustee to administer your estate. It takes time to obtain a Certificate of Appointment of Estate Trustee and will delay the distribution of your assets to your heirs. This may also lead to family feuds where more than one person feels that they are best suited for the job of administering your estate. Your spouse will not have the right to pick the person who will be responsible for handling all the arrangements for the division of your estate assets.
- Your spouse does not have the right to decide how property should be divided among the children or at what age the children should receive their share.
- If you have children who are minors (a minor is a person younger than 18 years old), then any money paid to the minor child must be paid into Court. The Court will hold onto the funds until the child is 18 years old. Regardless of how mature or immature your child is at 18, when your child reaches 18 years old, the money is automatically distributed to them.
In Ontario, a parent is automatically the "guardian of the person" of their minor child. However, a parent is NOT automatically the "guardian of property" of their minor child's property. A parent can only receive such authority on behalf of a child by statute, Court order or other document such as a Will. As a result, the Office of the Children's Lawyer automatically becomes involved in any estate where a minor child is entitled to receive money. Without a Will, your surviving spouse will have to bring a Court application to obtain the authority to act as a guardian of property for your minor child.
If you are a single parent or if you and your spouse die together, it is also possible that your children will be placed under the guardianship of someone you might not have chosen. Without a Will, you have not provided any instructions as to who should be appointed as guardian for your minor children.
Division of Property in Intestacy
When you die without a Will in Ontario, your property will be divided according to the rules set out in the Succession Law Reform Act.1 There is a standard procedure that divides the property according to family relationships, and no changes can be made to the distribution. The rules are:
- If the person dies without a Will and is survived by a spouse without children, then the spouse is entitled to the entire estate.
- Under the Act, a spouse is generally entitled to a preferential share of the value of the estate. The Regulations2 provide that a spouse is entitled to up to the first $200,000 of the estate before it is divided among any remaining heirs.
- If the person dies without a Will and is survived by a spouse with one child, then the spouse is entitled to their preferential share of $200,000. The remaining value of the estate, which is known as the residue, is divided equally between the spouse and the child.
- If the person dies without a Will and is survived by a spouse with more than one child, the spouse is entitled to their preferential share of $200,000 and the spouse is entitled to one-third of the residue. The children share the two-thirds of the residue equally.
- If the person dies without a Will and is survived by a spouse and their child has predeceased them but has left a grandchild, then the grandchild shares in the estate equally with any other children.
- If the person dies without a Will and without a spouse but has children, then the children share the residue of the estate equally.
- If the person dies without a Will and does not have a spouse or children, then their living parents will be entitled to the property equally, or one of them absolutely if only one parent is alive.
- If the person dies without a Will, without any spouse, children or parents, then their property is distributed equally among their brothers and sisters (or their children if the brother or sister predeceased the person).
- If the person dies without a Will, without any spouse, children, parents, brothers or sisters then their living nephews and nieces inherit an equal portion of the residue of the estate.
- If the person dies and there is no surviving spouse, children, parent, sibling, niece or nephew, the property is distributed equally amongst their closest next of kin who shared the same degree of kinship to the person. Otherwise, if the person has no such living next of kin, then generally the estate goes to the government.
If you die intestate then your estate may be left in a legal tangle, and your family could be left without income, which would result in considerable difficulty if not hardship for your spouse and children. A Will enables you to divide up your property among the people you want to benefit, and to protect the value of your estate.
If you want to have control over who will be your beneficiaries, then making a Will is a process that can save much hardship and confusion for your survivors when you die. While thought and care is required to do it properly, it is a necessary step to ensure that your estate is settled according to your wishes.
1R.S.O. 1990 c. S.26
2s. 2 of the Ont. Reg. 54/95, as am. O. Reg. 203/09