There are many misconceptions floating around about what happens when someone dies without a will, also referred to dying “intestate”. It is often believed that all your personal possessions and property fall to the government, which is not the case. There are laws which govern what happens to property when a person dies without a Will.
WHO CAN ADMINISTER YOUR ESTATE
In a majority of cases the party best qualified to administer the estate will be a spouse, adult child or close relative. Where more than one party seeks the appointment, it will be the responsibility of a judge to determine the party best qualified to assume the responsibility.
Any one who seeks appointment of estate trustee without a Will bears the same burdens as named executor in a will. The responsibilities include but not limited to, determining the assets and liabilities of the estate, ensuring all debts are paid, ensuring all assets are protected, advertising for creditors, and finalizing all taxes. It is important to speak with a lawyer in advance of considering seeking such an appointment in order to determine the extent of the work is required and the associated liability that carries with such an appointment.
SPOUSAL ENTITLEMENT AND PIT-FALLS OF COMMON LAW RELATIONSHIPS
In a significant portion of spousal relationship (common law or married) parties are joint owners of a majority of the assets of the marriage/relationship. In these cases, the shared assets will automatically pass to the remaining spouse/common law spouse by the rules of survivorship. However, as society evolves, and divorce and second marriages become more prevalent we are seeing more and more parties keeping their assets separate. In the latter scenario the difference between married spousal rights and common law spousal rights vary drastically.
Married spousal rights under an intestate estate varies depending on which statute the spouse seeks to enforce their entitlement:
a. Under the Succession Law Reform Act (SLRA) a married spouse of an intestate deceased will receive a preferential share of the estate. Under the SLRA a spouse is entitled to the first $200,000 of the proceeds of an estate. If there are no children conceived before and born alive after the deceased’s death, the married spouse will receive the whole of the estate. However, where there are children of the deceased, any proceeds of the estate above and beyond the first $200,000 are divided equally amongst the spouse and any children. So, for example, if the deceased left a spouse and two children, the spouse would receive the first $200,000 and the excess proceeds would be divided into three equal shares, with the spouse and two children each receiving a share.
b. A spouse may also elect to enforce their entitled under the estate through s. 5 Family Law Act. Under this election a spouse is entitled to receive one-half of the amount which the deceased’s net family assets exceeds the net family assets of the remaining spouse. The surviving spouse essentially receives an equal share in the increased value of property that was built throughout the marriage.
A married spouse should always consult a lawyer to assist with the proper calculations to determine which election would be most advantageous to their situation.
Common Law spouses do not receive the same protection in cases of intestacy. Given the strict definition of spouse provided under the Family Law Act, the s.5 election is completely unavailable to common law spouses. Additionally, under the SLRA, common-law spouses do not receive a preferential share. Accordingly, for a common law spouse to seek compensation from the estate they must bring an action against the estate as a dependent. Where the courts determine there has not be adequate provisions of support in place, they may order compensation/support be paid to the common law spouse. Additionally, a common law spouse may seek to bring an action for unjust enrichment under the principles of equity.
Where a deceased passes intestate leaving no spouse or children, the estate will be divided equally amongst the surviving parents, and if there are no surviving parents, amongst surviving siblings, and where no siblings, amongst nieces and nephews (blood, not marriage), and where no nieces of nephews amongst the surviving next of kin. It is ONLY where there are no next of kin that the estate becomes the property of the government.
The implications of passing without a Will extend far beyond just the distribution of assets. There is increased possibility of estate litigation, increased legal fees and tax implications. The only way to ensure your loved ones are properly protected and that your true intentions are carried out is to retain the serves of a legal professional to draft a valid Last Will and Testament on your behalf.
Shankar Law Office appreciates the importance of ensuring your wishes are carried out after your death. Please contact our office to discuss your estate planning process today.
Client care is the utmost importance to Shankar Law Office and for your convenience we maintain offices in two locations, Port Elgin and Owen Sound, central to providing services to the surrounding communities, including, Port Elgin, Kincardine, Southampton, Walkerton, Wiarton, South Bruce Peninsula, Chatsworth, and Meaford.