Dying Without a Will
Written by: Krystin Kempton, Associate
Most people think they have plenty of opportunities to write a will at some point in the future, but what if you don’t get the chance?
If you die without a will, it’s called dying “intestate”. Without a will, someone (usually a close family member) will have to apply to the court to be appointed administrator of the estate if probate is needed to release and distribute your assets. If you have minor children and the other parent is not alive, the court will also have to appoint a guardian.
Assets are distributed according to an established formula under the Wills, Estates and Succession Act.
If you die leaving:
- a spouse and no children, your entire estate passes to your spouse;
- a spouse and children, where your children are also the children of your spouse:
a. your spouse receives
i. the first $300,000;
ii. ½ of the residue of your estate;
iii. household furnishings; and
iv. the right to acquire the spousal home (if it was not held jointly at the time of your death) to satisfy his or her spouse’s interest in the estate (i.e., $300,000 + ½ of the residue of the estate). If the value of the home exceeds your spouse’s share of the estate, your spouse may purchase the balance of the interest in the spousal home from the estate; and
b. your children receive ½ of the residue of your estate, in equal shares;
- a spouse and children, where your children are not the children of your spouse, the distribution is the same as 2(a) above except your spouse will only receive the first $150,000, plus the balance of the items under 2(a)(ii) through (iv);
- no spouse, but children and/or descendants, the estate passes equally among your children. If a child has died before you, their share passes equally to their children, if any;
- no spouse and no children, the estate passes equally to your parents or your surviving parent; or
- no spouse, no children and no parents, the estate passes equally among your parents’ descendants (i.e., their children, grandchildren and great-grandchildren).
There are further formulas to deal with situations where the individual dies leaving no surviving spouse, children, parents or descendants of parents.
There are some obvious problems with dying intestate:
• Maybe you want your entire estate to pass to your spouse. A “spouse” includes a person married to the deceased and a person who lived common-law with the deceased for at least 2 years. If the value of the spousal home exceeds your spouse’s preferential share of your estate and your spouse can’t afford to pay the difference in value to your children, your spouse may lose the family home.
• Maybe you don’t want that much of your estate to pass to your spouse. Is it a relatively new relationship? Do you your children to receive a larger share?
• If you die leaving minor children and no living parent, the court will need to appoint a guardian without your input.
• A child’s share will be held in trust until they reach the age of 19. The child’s parent or guardian will have to apply to the Public Guardian and Trustee for any money needed for the child’s care, maintenance or benefit, such as living expenses or tuition.
• You lose the ability to set a later age for a child to receive a share of your estate, like 21 or 25 when the child may be more financially responsible or mature.
• Death is stressful enough on a family. Hunting for a will that does not exist adds undue stress.
• An intestate distribution is often more time consuming and costly.
• A court-appointed administrator may sell off items that you otherwise would have kept in the family.
You don’t know when you’re going to die. Every adult who owns assets or has a spouse or young children should have a will. Planning ahead can save your loved ones a great deal of time, stress and money.
See https://www.nixonwenger.com/blog/article/preparing-for-your-estate-planning-meeting.html for more information on estate planning.