In accordance with the Succession Law Reform Act (SLRA), when you die without a Will (known as dying intestate) your estate will be administered according to the law of intestacy.

The Rules

The rules of intestacy are inflexible, and apply regardless based on bloodlines. These rules may end up benefiting the wrong people, at the wrong time, and in the wrong way.  For example, your spouse whether married or common law does not automatically inherit all of your property and a spouse does not have the power to determine how the property should be divided among the children, or at what age they should get their share.

If you die intestate, your estate will be distributed according to the following rules, as outlined in the SLRA:

  • If you have a spouse, but do not have children, your entire estate will be left to your spouse
  • If you have a spouse and one child, your spouse will receive the “preferential share” (the first $200,000). The remainder will be divided between your spouse and child 50/50.
  • If you have a spouse and more than one child, the first $200,000 will go to your spouse. The remainder of the estate will be divided as follows: 1/3 to the spouse, 2/3 to the children, divided equally. If only grandchildren survive, they would share the estate equally (per capita).
  • If you have children, but are not married, all children share the estate equally
  • If you do not have children or a spouse, your entire estate will go to your parents. If both of your parents are deceased, your siblings will share in the estate equally
  • If there is no next of kin, the estate escheats or goes to the Crown (government).

Added Complications

Circumstances are often complicated, many issues can arise in an estate distributed under the law of intestacy. For example, an administrator you might not have otherwise chosen may be appointed to handle the estate administration.

Minor children are entitled to receive an intestacy and this may put your spouse in financial jeopardy as result.   In addition to having the added complication that minors are unable to receive financial assets directly. When there is no Will, no trust is set up and the interests of minors are required to be paid into the Accountant of Ontario, where the assets will be managed and administered on behalf of the minor until he or she reaches the relevant age of majority.  Upon reaching the age of majority (currently 18 in Ontario) the minor will be entitled to receive all their inheritance which some parents find is too young to accept the responsibility of managing funds received from an inheritance.

Further, a common law spouse does not have property rights. If you have a common law spouse, he or she will not qualify for the first $200,000 preferred share as it is only available for married spouses. A common law spouse may end up with nothing.

Failing to draft a Will could also result in litigation if the surviving spouses pursue statutory rights under the SLRA.

Regardless of where you are in your life a proper estate plan, with a Will, is important to ensure that those receiving your estate are those that you have chosen.  It also provides peace of mind for both you and your family.

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