All About Estates

Intestacy Reform Overdue in Ontario?

Saskatchewan recently amended its intestacy rules through the enactment of The Intestate Succession Act, 2019 (the “Act”), replacing the former 1996 statute. “Intestacy rules” are the rules that govern the division of a deceased person’s estate if the person dies without a will, or a portion of an estate if a person dies with a will but the will does not dispose of the entire estate.[1]

The Act differs in several important respects from the intestacy rules in Part II of Ontario’s Succession Law Reform Act (“SLRA”). First, the definition of “spouse” includes both married spouses and common-law spouses. To be considered a common-law spouse for purposes of the Act, the parties must have cohabited continuously for 2 years or more and either were still cohabiting at the time of the intestate’s death or, if they are no longer cohabiting, the separation occurred less than 2 years before the intestate’s death.[2] Under the SLRA, by contrast, only married spouses are considered spouses for purposes of the intestacy rules.

While the Ontario approach provides a bright-line test for which spouses share in the division of an estate on an intestacy, it has the effect of excluding many common-law spouses who quite reasonably would expect to share in the division of an intestate’s estate. Moreover, any benefit of having a bright-line test is often illusory, since a surviving common-law spouse can make a claim for support from the intestate’s estate if the surviving spouse and the intestate had been cohabiting for 3 years.[3] In such cases, the fact-driven and potentially contentious question of whether the individuals had been cohabiting for the requisite amount of time is not avoided. In addition, advancing a claim for support from the estate adds cost to the administration, which can be significant, and will generally delay the administration.

The Act differs from the SLRA not only in who is considered a spouse, but in how a spouse shares in the division of the intestate’s estate. If there are surviving descendants and all of the descendants are descendants of both the intestate and the surviving spouse, then the entire estate goes to the surviving spouse, the assumption being that the surviving spouse is likely to treat all of those descendants in the same way during the spouse’s lifetime and in the division of the spouse’s estate (i.e. in contrast to step-children). However, if any of the descendants are not descendants of both the intestate and the surviving spouse (e.g. in a blended family situation), then the surviving spouse receives the greater of $200,000 and one-half of the net value of the estate, and then the balance is divided between the spouse and the descendants in proportions that vary depending on the number of children (and deceased children with living descendants).[4]

 

 

[1]       In reference to a person, an “intestate” is a person who dies without a will or dies with a will that does not dispose of the person’s entire estate.

[2]       Common-law spouses were first included in Saskatchewan’s intestacy rules in 2001 but the definition has been further refined in the Act.

[3]       A surviving common-law spouse can also claim support from the intestate’s estate if the surviving spouse and the intestate were together the parents of a child, in which case there is no minimum period of cohabitation.

[4]       If there is one child, the remainder is divided equally between the surviving spouse and the child. If there is more than one child, the surviving spouse receives one-third of the remainder and the balance is divided among the children equally. The share of a deceased child who has surviving descendants is divided among the child’s descendants with representation (i.e. on a per stirpes basis).

About Darren Lund
Darren Lund is a member of the Trust, Wills, Estates and Charities at Fasken, Toronto office. Darren has expertise in a broad range of estate planning matters, including multiple wills, inter vivos trusts, disability planning, estate freezing, and planning for beneficiaries and assets outside Canada. Darren advises trustees and beneficiaries on all aspects of estate administration, both contentious and non-contentious, and his experience includes passing of fiduciary accounts, trust variations, post-mortem tax planning, and administering the Canadian estates of non-residents. He also speaks and writes on a variety of related topics such as estate planning for spouses and couples, inheriting overseas property and estate planning for persons with disabilities. He previously practised estates law at a large national law firm. Email: dlund@fasken.com

3 Comments

  1. Greg Anderson

    January 3, 2020 - 2:17 pm
    Reply

    -tell me where I can sign the petition to get this done -and perhaps add on that they should repeal the law that revokes the Will on marriage -I’m tired of explaining to the kids that although their father told them he had a Will so they did not have to worry , he forgot to tell them it was revoked on his marriage to their step mother ……..

  2. Catharine Williams

    January 3, 2020 - 2:44 pm
    Reply

    Very interesting article, and written in an easy-to-understand way for this accountant! Thanks very much.

  3. Jen Moore

    January 3, 2020 - 3:43 pm
    Reply

    Is there anyone that is petitioning the Ontario government to make these changes? This is common sense and should be consistent across Canada. I had a client whose husband died intestate last year by suicide, and left her in a very difficult situation owing to the fact that now her 14 year old son has a legal entitlement to a portion of the estate that must be held in trust for him until age 18. The children’s lawyer is involved as is the Public Guardian and Trustee. This would save taxpayer dollars in addition to relieving financial pressure on the surviving spouse or common law spouse.

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