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Preferential Share

 

 

A recent update to our laws took effect on March 5, 2021, allowing for a spouse to receive a preferential share of the value of a home when a partner dies without a Will.  This is particularly significant with the value of homes exceeding $1.0MM in the Greater Toronto Area.

March 5, 2021 – Ontario has increased the preferential share payable to a spouse on intestacy from $200,000 to $350,000.

recent amendment to the regulations under the Succession Law Reform Act prescribes the preferential share as being $350,000 for the Estate of a person who died on or after March 1, 2021. The preferential share remains at $200,000 for Estates of a person who died before March 1, 2021. The last change to the value of the preferential share was in 1995 when it was increased from $75,000 to $200,000.

Under the Succession Law Reform Act, where a person dies without a Will, but with a “spouse” and children, the spouse is entitled to the “preferential share”, and ½ of the balance of the Estate if there is one child, or 1/3 of the balance if there is more than one child.

The provision applies to married spouses only, including married but separated spouses. However, other recent proposed amendments to the Succession Law Reform Act may change this. The proposed legislation provides that the intestacy rules that provide for a spouse do NOT apply if “the spouses are separated at the time of the person’s death”. “Separated” is defined as meaning either (i) they lived separate and apart for three years as a result of the breakdown of their marriage; (ii) they entered into an agreement that is a valid separation agreement; (iii) a court made an order settling their affairs arising from the breakdown of the marriage or (iv) a family arbitration award was made settling their affairs.  Further, there must have been no reconciliation: they must have been living separate and apart as a result of the breakdown at the time of death.

 

Read about more changes to the Succession Law Reform Act

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Are you interested in a consultation with Peter R. Welsh?
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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.

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