We’ve previously highlighted the importance of drafting a legally binding will in the Wills and Power of Attorney section of our website and in our blog on Mutual Wills. A will gives you control over the distribution of your assets, the ability to select Estate Trustee(s), and the opportunity to address guardianship and inheritance matters with respect to your children.
If you die without a valid will (intestacy) in Ontario, the Succession Law Reform Act (SLRA) governs how your estate will be administered and how your assets will be distributed.
Division of Property
Part II of the SLRA deals with Intestate Succession and provides for the division of property as follows:
- If the deceased is survived by a spouse but no children, the spouse is entitled to all the property;
- If the deceased is survived by a spouse and children, the spouse is entitled to the first $200,000 of the estate, and the remainder of the estate is divided equally between the spouse and the children; E.g. If the net value of the estate is $500,000 and there are two surviving children, the spouse will receive $300,000 ($200,000 + 1/3 of the remaining $300,000), and each child will receive $100,000 (1/3 of $300,000). If the net value of the estate is less than $200,000, the spouse will receive the entire amount;
- If the deceased has neither a spouse nor children at the time of death, the deceased’s parents inherit the property;
- If the deceased dies without a spouse, children, or parents, the property is divided equally among the deceased’s surviving brothers and sisters (or any children of a brother or sister if they predecease the deceased);
- If there is no surviving spouse, nor children, parents, brothers or sisters, the property is divided equally among the deceased’s nephews and nieces;
- If the deceased leaves no surviving spouse, children, parents, brothers or sisters, nieces or nephews, the property is distributed among the “next of kin of equal degree of consanguinity to the intestate equally” [s. 47(6)]. Subsection 47(8) provides that “…degrees of kindred are computed by counting upward from the deceased to the nearest common ancestor and then downward to the relative,…”;
- And, finally, if none of the above situations apply, the property of the deceased becomes the property of the Crown.
Appointment of Estate Trustee
If you die intestate, an application will have to be made to the court to have someone appointed as Estate Trustee to administer the estate. This is not ideal as it will inevitably take some time and involve costs. There may also be conflict among family members as to who is best suited at act as Estate Trustee. We saw a very public example of the potential for added delay and cost earlier this year when singer Prince died without a will. Articles examining his intestacy also explored the idea that half of Prince’s estate could go to the government as tax payments.
There are two main issues with respect to children and intestacy:
- Guardianship – If your spouse is also deceased or you are a single parent and you die without including your wishes for guardianship of your minor children in your will, your children may be cared for by someone who would not have been your first choice; and
- Inheritance – As outlined in the rules of property division according the the SLRA, if you die intestate your minor children may not end up with the share of your estate that you intended. Further, you have no control over the age at which they will receive their inheritance, nor how it should be managed while they are still minors.
The Bottom Line
It’s simple: if you don’t have a will, make an appointment to get one done. It doesn’t have to be complicated. It’s far better to have a simple will than no will at all. Make sure that your wishes are written in a valid will, and know that you are helping your loved ones avoid delays, costs, and conflict.