Not a lot of people think about inheritance law and what that means for them in Canada. Understanding the basics of this area helps to ensure that you can be informed to make necessary arrangements after your passing.
Let’s start with the basics: Testamentary freedom is the right to choose who you leave your assets to when you pass away. Usually, this is done in a Will. This right is limited by provincial laws and the laws of the country in which your assets are located. Provincial laws also dictate who benefits from an estate in the event that there is no Will.
Testamentary freedom has different limits in each province in Canada
The laws governing succession (i.e., who inherits what) differ among the provinces of Canada. For example, in Ontario, the law states that when there are no surviving parents or children, then brothers and sisters will inherit equally; however, if there is only one brother or sister, they will receive two-thirds of the estate while their sibling receives one-third.
In Alberta and New Brunswick, it is permitted for a deceased person’s spouse to elect against a Will made by their deceased partner. They can do this by making an application within 30 days after receiving notice of their death. It is therefore important to understand the laws pertaining to your province in particular in lieu of seeking general advice on the internet.
The importance of having a Will
A Will is a legal document that specifies how you want your assets distributed after your death. You can include in the Will any of the following:
- Details of your funeral arrangements;
- Who gets what, and under what circumstances (for example, if a child may have health problems); and
- Specific instructions on how to deal with any debts you might leave behind.
A Will also helps protect your family’s interests by ensuring that they’re taken care of in accordance with the wishes you expressed in life. In addition to giving direction about who gets what upon death, Wills can also specify how much should be spent on legal fees for estate planning and administering a trust fund—and these cost savings can be significant if there are multiple beneficiaries involved.
A well-crafted Will can also help reduce taxes owed by ensuring that income from investments is distributed according to personal tax strategies. Having a validly executed last testament ensures that, after one dies, their estate will not be subject to probate court proceedings which could delay distributions beyond what is desired. Instead, a Will allows families or individuals named as heirs access to the estate immediately upon death without having to go through additional legal processes like probate court hearings or other reviews by courts.
What happens when you don’t execute a Will at all?
What happens when you don’t execute a Will at all? In the case of intestacy, it depends on where a person was last domiciled. The rules vary among provinces, but generally:
- If your loved one died in Alberta, the estate in its entirety will go to the surviving spouse or common law partner. If the deceased has children from another relationship, the surviving partner is awarded less so that those children can be compensated.
- If your loved one died in British Columbia, their estate would be distributed through their family tree. Spouses have special rights when property exists only in the deceased’s name. In the case of joint property, the land’s title will pass to the surviving owner.
- If your loved one died in Manitoba, their estate is distributed in accordance with their hierarchy of beneficiaries starting with the spouse. After the spouse receives a share, the estate is further divided amongst the children, and then all other family members.
- If your loved one died in one of the Atlantic provinces, a portion of the estate usually goes to the spouse first, and then the rest goes to the children. It is notable that common law spouses do not qualify as spouses under this regime.
Ontario’s Succession Law Reform Act
The Succession Law Reform Act is the legislation governing what happens with an individual’s estate after their passing in Ontario. Generally, an individual’s spouse will receive the property in its entirety. However, where there are children, the property is split equally between the surviving spouse and the children. In other words, if there is one child, the surviving spouse would get half of the estate. If there are two children, the spouse would get one-third.
If the deceased has no descendants (referred to as “issue”), the Succession Law Reform Act stipulates the following:
47 (1) …where a person dies intestate in respect of property and leaves issue surviving him or her, the property shall be distributed, subject to the rights of the spouse, if any, equally among his or her issue who are of the nearest degree in which there are issue surviving him or her.
The Succession Law Reform Act goes into further detail with respect to how the estate might be distributed amongst parents, siblings, and nieces and nephews where there is no issue. The important takeaway is that it is very critical to have a Will in place so your loved ones can avoid the complicated process of dividing up your estate.
What happens when the terms of your Will are unclear
It is sometimes the case that a Will is in place, but its terms are unclear. When this is true, it may open up the door for family members to challenge the validity of terms within the Will.
When tasked with interpreting a Will, a court will interpret the Will according to the words used. The court will also consider the Will according to the intention of the testator. Other factors the court may look at include:
- Whether or not there are any doubts about what was intended by a specific provision in a Will;
- Whether or not there are any doubts about who is meant by some word used in a particular provision; and
- Whether or not there are any questions left unanswered by an ambiguous provision (i.e., whether it can be said that “the intention of this provision” really means something different).
Contact Toronto Estate Lawyers at Derfel Estate Law to Challenge the Terms of a Will
At Derfel Estate Law, our experienced team of estate lawyers is always up to date on estate administration requirements and can assist with Will challenges. Contact us by phone at 416-847-3580 or reach us online to discuss your estate needs.