Dying in Canada without a Will Creates Unique Complications and Added Expenses for Survivors
When a family member dies without a will, the door opens to an array of issues for friends and family to deal with, including two critical questions: who benefits from the Estate and who administers it?
Dying without a will also mean lost opportunity to make good tax plans, such as access to unique tax-rollover options, or managing other potential liabilities and costs like Probate Fees. Also lost without a valid Will will be the opportunity to plan for special circumstances like disabled beneficiaries or blended families.
Dying without a Will can also lead to family squabbles and legal fees which can eat up much of the Estate with no clear winner over time.
How these questions are answered, while in many ways similar, differs between provinces.
If you die without a Will in B.C. leaves the Wills, Estates and Succession Act to determine the transfer of property. Generally, the government distributes the Estate along the lines of the deceased’s family tree, with special rights for spouses, but that’s only when the property is registered solely in the name of the deceased. If the property is registered as joint ownership, the title passes to the surviving owner.
Probate fees – the cost to appoint a legal trustee – are assessed by the province. The calculation is roughly $14 per $1,000 of value or 1.5% of the total value of the Estate. However, when setting the amount, the province’s assessment value can be used to ensure the Estate is held at or below market value. A certified appraisal can be done to reduce the value of the property and thus the Probate Fees if the Estate Administrator feels that the assessed value was initially too high. It is also important to remove financial assets that have beneficiaries such as RRSPs, TFSAs, RESPs, and insurance policies as these are not usually Probated.
Without a Will in Alberta, the entire Estate generally goes to the surviving spouse or adult interdependent partner. That’s how it works whether the couple has children or not.
However, if the deceased or surviving partner also has children from a different relationship, the share awarded to the surviving partner is either 50% of the Estate, or $150,000, whichever is greater. Alberta’s Wills and Succession Act dictates how the rest is distributed in this and all other scenarios.
The Administration of Estates Act determines who can administer the Estate after the death of someone without a Will. This generally starts with the spouse of the deceased. However, if the spouse cannot act, all children must agree on which of them will be an Administrator. If this is not possible, the same process applies in descending order to other layers of the family – and potentially to those outside the family.
With both a surviving spouse and children, the spouse is entitled to $100,000 of the Estate, plus a share of the remaining value. Without a spouse, the Estate is divided among children. If a person passes away with no immediate family (spouse, children, parents, siblings, or nieces and nephews), the Estate will pass to another next-of-kin.
Whoever is applying to be the Estate Administrator needs to have evidence of what the deceased person had for assets at the time of death. However, this information can be difficult to gather since some institutions are reluctant to give such information to an individual if they are not already the legal administrator.
In Manitoba, Estates are divided based on a hierarchy of beneficiaries. This starts with a spouse who receives the entire Estate. After that is existing children, then all other members of the family in descending order. Marital separations can make the hierarchy of beneficiaries less clear.
As in other jurisdictions, the government is granted the entire Estate if no living relative can be found.
Who administers the Estate is determined by those qualified as beneficiaries. This involves agreeing upon and nominating an individual, then applying to the court for approval.
In Ontario dying without a Will means a Trustee needs to be appointed to move forward. This, however, involves applying to the court for what’s called a Certificate of Appointment of Estate Trustee without a Will and comes with a 1.5% fee for anything over $50,000.
If there are no children, the spouse gets the entire Estate. When there are children, the spouse receives the first $350,000, and anything more is split between the spouse and the children. With one child, the split is 50/50. More than one living child means the spouse receives one-third, and the other two-thirds goes to the children. Money granted to children under 18 years goes to a public guardian trustee for administration. That Trustee writes the child a cheque once they come of age.
All further Estate distribution circumstances and regulations are covered by the succession law reform act. https://www.ontario.ca/laws/statute/90s26
According to Éducaloi, a charity dedicated to explaining Quebec law in everyday language, with no Will, heirs will be responsible for settling affairs and will need to make the selection themselves by majority vote. That person, the liquidator, will be required to have agreement from all heirs before making many decisions involved with settling the Estate.
The Civil Code of Quebec states that common-law spouses, regardless of how long the relationship was, are not considered heirs and thus cannot inherit when there is no Will. Civil or married spouses are protected, however, though that protection varies according to the family situation.
Overall, the Civil Code specifies potential heirs and distribution based on the deceased’s family situation. Civil Code on dying without a will
New Brunswick, Nova Scotia, P.E.I., Newfoundland and Labrador
Without a Will, in any of the four Atlantic Canadian provinces, solely owned assets (whether land, equipment or a house) are distributed as the applicable provincial law dictates. Specifics may vary depending on the province, but in general, the spouse receives a set amount before sharing the rest with children, if any exist. Common-law partners do not qualify as spouses. Further distribution is granted according to a hierarchy of next-of-kin.
The implications of dying without a Will vary across the country. In general, no Will means more expenses for survivors. Knowing the nuances of your province’s estate law regulations can save survivors money. And it is important to know that a Will is important for everyone regardless of age and how much money they have. Very few people have nothing of value to pass on. You may not own much, but if you think about it, you probably have some assets. Having a Will ensures those assets will go to the people of your choosing.
If you die without a Will, you won’t have any say on who gets what. This may not bother you but remember that disputes can erupt among family members during emotionally trying times. Without a Will, your family members may fight over who will apply to be your Administrator, which could strain relationships.
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.