When you’re going through the hustle and bustle of life, you’re likely not giving much thought to what happens when it’s all over. In your younger or even your middle years, when you’re focused on things like career and family, you’re not buying homes and cars and other valuables thinking about who’s going to inherit them after you’re gone.
Yet that’s something that we all need to think about. As the old saying goes, “you can’t take it with you when you go.” Even though you may not be thinking about the future of your material possessions, you’re likely thinking about setting some money aside for children, grandchildren, relatives or even friends who will need it once you’re gone.
Your legal will is the place where you can spell out these wishes. You can determine exactly who gets what – from your possessions to your savings to anything else that you own. So what happens if you die without a legal will, and what happens to your property and possessions?
What the law says about dying without a will
As there are still millions of Canadians who don’t have a will, there is a clear set of laws about what happens when those individuals pass away without outlining their wishes. In law this is called ‘dying intestate’ (without a last will or testament), and the law is called the Succession Law Reform Act (the “Act”).
The Act lays out the ground rules for who inherits your assets if you die intestate. In short, it says:
- If you have a spouse, and no children (known as ‘issue’ in the Act): Your spouse inherits the entirety of your property. Note that this does not automatically apply to common-law spouses. Also, if you had any property in joint tenancy with another person (a legal form of co-ownership) then that property is not automatically included.
- If you have a spouse and children and the estate is worth less than $350,000: In this case your spouse would inherit the entirety of your estate.
- If you have a spouse and children and an estate worth more than $350,000: Your spouse would inherit the first $350,000 of your estate and then the remainder is divided amongst your spouse, and how many children are alive after you pass. Let’s take an example with an estate worth $750,000:
If you have one child, your spouse inherits the first $350,000 and the remaining $400,000 is divided between your spouse and your child, so that your spouse ultimately inherits $550,000 and your child receives $200,000
If you have two or more children, your spouse receives their first $350,000, and then a ⅓ share of whatever is remaining after that, with the number of children dividing a ⅔ share..
- If you have no spouse or children: Your parents inherit the value of the estate, or a single parent if they are the only surviving parent receives the entire value.
- If you have no spouse, children, or parents: Your siblings equally inherit your property under the Act, and if any sibling has already died then their children receive what would be their designated share.
- If you have no spouse, no children, no parents, and no surviving siblings: Your nieces and nephews would inherit your estate equally.
- If you have no spouse, children, parents, siblings, or nieces and nephews: Your ‘next of kin’ inherits your property – this person is found from going up your family tree to the nearest common ancestor, then counting down their line to find the closest surviving relative (i.e.: cousins once- or twice-removed).
At a first glance the rules in the Act make a lot of sense, and would seem to align with most people’s wishes. So what’s the problem?
The challenge is that real life is not always that simple. Families can fracture, and people can cease contact with parents or siblings for any number of reasons. In those cases, individuals with a legal will may amend things to change who gets what, or to exclude a certain individual. Without a legal will though, these wishes are going to be ignored, and the law will distribute your assets to the people that you never wanted to receive them in the first place.
Making a legal claim
There are situations where a surviving partner or relative may want to make a legal claim, especially if the deceased died without having a legal will.
What if, for example, one of the children or another relative was financially dependent on the deceased because they were ill or unable to work. The rules under the Act would cut off that support and leave the individual without a source of income. In the case of a common-law spouse or a step-child, they may be left without inheritance entirely. In this case they can make a legal claim for that support to continue, provided they have evidence to prove their claim.
The other option, especially for common-law spouses, may be making a claim for an equalization payment. This is similar to the end of a marriage, where the surviving spouse can make a claim for their share of the net family property based on what each contributed during the relationship. There are exclusions to this, though, so it is best to seek legal advice before deciding how to proceed.
The bottom line
The bottom line is that making a legal will does not need to be an awful, dreadful, horrible experience! While we may not want to think about the end of our lives, we do want to think about those that we care about and to make sure that they’re protected. Having a will in place is the best way to do this, and certainly the best way to clearly express your wishes when you can no longer do so yourself.
We’re here serving the Windsor-Essex and Chatham-Kent regions to make the process as simple and painless as possible. Making a will won’t break your bank, and it won’t take an eternity to do either. Let our team serve as your guides through this process so that you can rest easy for hopefully years to come. Contact Good Law today to set up an appointment.