Many couples think that owning everything jointly and naming each other as beneficiaries of RRSPs, TFSAs, and life insurance means they don’t need Wills. Unfortunately, that is simply not the case.
If your spouse dies without a Will, you could be faced with some significant challenges. This could be even more challenging if you have children. For starters, without a Will naming you as your spouse’s estate trustee or executor, you have no authority to deal with your deceased spouse’s affairs.
Some of the problems you could face include:
• Frozen assets: Any asset owned solely by the deceased spouse is usually ‘frozen’ until a Certificate for
Appointment of Estate Trustee (commonly referred to as ‘probate’) is granted by the Court. This means that the surviving spouse cannot do anything with the asset until someone is appointed as estate trustee.
• Delays and Increased Costs: Without a Will, delays and increased costs are inevitable. For example, when a person dies without a Will, distribution of the estate must not take place until a year after the date of death. Increased costs are likely due to the addition legal work involved and the possibility that the purchase of an executor’s bond may be necessary.
• Unintended Distribution: Other than receiving jointly-owned assets and those with the spouse as designated beneficiary, assets may not go entirely to the surviving spouse. Under Ontario’s intestacy laws, for example, if a person dies without a Will in Ontario leaving a spouse and children, the spouse is entitled to the first $200,000 and the rest is shared by the spouse and the children.
• Children’s Share Paid Into Court: The share of any minor child (under age 18) must be paid into court with the assumption that it will be held until the child turns 18. At that time, it is paid directly to the child. Access to the funds to help raise the child is not automatically granted to the surviving spouse.
• Increased taxes: Without a Will and the tax planning that could have been done, higher taxes may be payable by the estate. With planning, taxes might have been deferred via a rollover or other means or taxes might have been reduced through the use of trusts or other tax planning strategies.
If a married couple both die without Wills, such as in a common accident, and if they have no children, the family of the last spouse to die inherits everything. This could have the usually unintended result of cutting out the family of the spouse who died first.
Whether you own a lot or a little, if you are 18 or older and live in Ontario, you should have a Will. Only then will you have the right to decide who takes care of your affairs after your death, who will benefit from your estate and in what proportions. The single most important thing you can do to ensure the security and well-being of your family’s future in the event of your death is to make sure you have an up-to-date Will.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
