KPA Lawyers – August 14, 2020

A properly drafted, up-to-date Will may be one of the most important legal documents an individual can have, as it ensures that their wishes upon death are followed. Despite this reality, many people in Ontario feel like they’re either too young or too broke to need a will. Others might mistakenly believe creating a will is too expensive or that their families will simply agree to split all of the assets equally.

In fact, a 2018 poll conducted by the Angus Reid Institute found that 51% of Canadians polled do not have a Will in place and that only 35% of Canadians admitted to having a Will that is up to date.

While this number has no-doubt decreased due to fears associated with COVID-19, many have not yet had the opportunity to implement this basic form of estate planning.

Considering the above, this article will examine what happens to a deceased’s estate when they die without a Will in Ontario.

When one dies intestate, or without a Will, in Ontario, the deceased’s estate is distributed in accordance with Part II of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (the “SLRA”).

The SLRA provides that a deceased’s family make-up is determinative of how the deceased’s estate is distributed when the individual dies intestate.

First, let’s examine the different distributions that would take place if the deceased was survived by a spouse and/or lineal descendants, referred to as one’s “issue”, in the SLRA:

Deceased is survived by a spouse, but not survived by any issue:

If the deceased has a spouse[1] but no issue, section 44 of the SLRA provides that the deceased’s spouse will inherit the entirety of the estate.

Deceased is survived by a spouse and issue, but the value of the estate does not exceed the preferential share:

Section 45 of the SLRA provides that the spouse of a deceased who dies intestate is, at the very least, entitled to a preferential share of the deceased’s estate. Section 1 of O. Reg. 54/95 prescribes that the preferential share a surviving spouse is entitled to is $200,000. Therefore, if a deceased dies intestate and the value of the estate is less than or equal to $200,000, the deceased’s surviving spouse will inherit the entirety of the estate.

Deceased is survived by a spouse and one child and the value of the estate exceeds the preferential share:

Section 46(1) of the SLRA provides that the spouse in this case is entitled to the preferential share and that the spouse and the child would each receive half of the residue, or remaining amount, of the estate.

Example: Suppose the deceased died, leaving an estate valued at $300,000, and was survived by a spouse and one child. In this scenario, the deceased’s spouse would first be entitled to the preferential share of $200,000. The residue of $100,000 would then be evenly split between the spouse and the child. Therefore, the surviving spouse would inherit $250,000 and the surviving child would inherit $50,000.

Deceased is survived by a spouse and two or more children and the value of the estate exceeds the preferential share:

Section 46(2) of the SLRA provides that in this scenario, the surviving spouse is entitled to the preferential share, as well as 1/3 of the residue. The remaining 2/3 of the residue is split between the surviving children.

Example: Suppose the deceased died, leaving an estate valued at $500,000, and was survived by a spouse and two children. In this scenario, the deceased’s spouse would first be entitled to the preferential share of $200,000. The surviving spouse would further be entitled to 1/3 of the residue. The remaining $200,000 would then be evenly split between the two children. Therefore, the surviving spouse would inherit $300,000 and the two surviving children would each inherit $100,000.

Second, let’s examine the different distributions that would take place if the deceased dies without a surviving spouse or issue:

Deceased has no surviving spouse or issue:

Section 47(3) of the SLRA provides that the estate is split evenly among the deceased’s surviving parents. If the deceased only has one surviving parent, that parent would inherit the entirety of the estate.

Deceased has no surviving spouse, issue or parents:

Section 47(4) of the SLRA provides that the estate is split evenly among the deceased’s surviving siblings. Additionally, if any of said siblings were to have predeceased the deceased, the share that the predeceased sibling would have been entitled to is split evenly among that sibling’s surviving children. Should the deceased not have any surviving siblings, the estate is evenly distributed among the deceased’s nephews and nieces.

Example: Suppose the deceased person David dies with no surviving spouse, issue or parents, leaving an estate valued at $300,000. If D has three surviving siblings, Anna, Brent and Charlie, then section 47(4) of the SLRA provides that Anna, Brent and Charlie evenly split David’s estate, with each inheriting $100,000.

However, now imagine the exact same scenario, but with Charlie predeceasing David. Additionally, suppose that Charlie has two surviving children of his own, Emma and Frank. In this case, Emma and Frank would be entitled to Charlie’s share of David’s estate and the distribution would look like this: Anne and Brent would each inherit $100,000 and both Emma and Frank would inherit $50,000, representing an equal share of Charlie’s entitlement to David’s estate.

Deceased has no surviving spouse, issue, parents, siblings, nephews or nieces:

In this case, section 47(6) of the SLRA provides that the deceased’s estate is split among the deceased’s next of kin of equal degree of consanguinity.

Deceased has no next of kin whatsoever:

Should the deceased not have any surviving family members, section 47(7) of the SLRA provides that the deceased’s estate would revert to the government.

If you die without a Will, your property will be divided according to the above laws, which may not be in line with your personal preferences. If you would like to make sure that your personal preferences are respected, it is best to have your Will prepared by a lawyer.

For a free Wills and Estates consultation, click here.

[1] Pursuant to section 1(1) of the Family Law Act, R.S.O. 1990, c. F.3, a spouse includes either of two persons who: (1) are married to each other; or (2) have entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right. Note that this does not include common-law partners.