It can be daunting to think about preparing a will, but it need not be complicated, and it acts as insurance against a family argument or the break up of the personal and business assets that you have carefully built up during your life.
Why make a will
- a) Without a will, the intestacy rules apply, which means that blood relatives may inherit your estate who you had not intended, even if you are married.
- b) You can ensure that people you trust look after your affairs after your death, including guardians if you have children under the age of 19 (in Ontario).
- c) By clearly recording your wishes you can avoid expensive litigation.
- d) You can ensure that you do not pay tax unnecessarily.
- e) You can leave gifts to your partner, step children, friends and charities.
- f) You can set up trusts to protect the people you love, whether they are your spouse, young children, disabled or elderly relatives.
How to make a will
Under Ontario law, a will must be in writing and signed by the person creating the will in front of two witnesses, all present at the same time. There must be no doubt as to what your intentions are, so the will must very carefully drafted to ensure that it will be valid and stand up to any claims. Your solicitor can advise what should and should not be included to reflect your individual circumstances.
If there is possibility that a person lacks the mental capacity to create a will, either because of age or illness, then it is essential that the legal guidelines for taking instructions and signing of the will are followed. There are many legal cases concerning what happens if this process is not properly carried out, which could mean that a will is declared wholly or partially invalid.
Even if you already have a will it is worth reviewing it to make sure it still reflects your wishes and current legislation.
If you die without a Will or a complete Will that governs the distribution of your entire estate and assets then Law of Intestacy in Ontario applies.
If you are interested in discussing a Will and or Powers of Attorney please contact Ella L. J. Bernhard
Law of Intestacy in Ontario
Ontario has statutory provisions that detail who inherits an estate when the deceased did not have a valid Will. To access those provisions Please see Part II of the Succession Law Reform Act.
We have to define some terms first before proceeding with this discussion:
Scenario 1 – Intestacy where spouse and no issue – Spouse inherits Property. See section 44.
In this scenario a deceased did not have a valid will. He was survived by his spouse, but there were no descendants conceived before and born alive after the deceased death. In this instance the spouse receives the entirety of the deceased’s property. However, if the deceased owned property in joint tenancy then that specific asset does not fall into the estate of the deceased and is not included in his property to be distributed via the law of intestacy.
Scenario 2 – Intestacy with spouse and issue – Estate worth less than $200,000 – Spouse inherits
In this instance assume there is both a spouse and descendants of the deceased. It the deceased died intestate and the estate’s net value is less than or equal to $200,000.00 then the spouse is entitled to the property absolutely.
Scenario 3 – Intestacy with spouse and issue – Estate worth more than $200,000 – Spouse and Children inherit. Where the estate’s net value is more than $200,000.00 and the deceased died intestate then the first $200,000.00 is inherited by the spouse. The balance of the estate is divided differently depending on how many children of the deceased were conceived before and born alive after the parent’s death
- Spouse & 1 Child. Where a person dies intestate in respect of property and leaves a spouse and one child, the spouse is entitled to one-half of the residue of the property after payment of the $200,000.00 to the Spouse. So if the net value of the estate was $320,000.00. The spouse would receive the first 200,000.00 and the last $120,000.00 would be divided with $60,000.00 going to the child and $60,000.00 going to the Spouse. In total the spouse would receive $260,000.00 and the child $60,000.00.
- Spouse & more than 1 Child. If a person dies intestate and leaves a spouse and two or more children then the spouse is entitled to 1/3 of the residue of the property after payment of the $200,000.00 and the children divide the 2/3 balance. So if the net value of the estate was $320,000.00. The spouse would receive the first 200,000.00 and the last $120,000.00 would be divided with $80,000.00 (being 2/3 of $120,000.00) being divided equally between the children and $40,000.00 (being 1/3 of $120,000.00) going to the Spouse. In total the Spouse would receive $240,000.00 and the children would receive $80,000.00.
Scenario 4 – Intestacy with no spouse and no issue – Parents inherit.
Where a person dies intestate in respect of property and leaves no spouse or issue, the property shall be distributed between the parents of the deceased equally or, where there is only one parent surviving the deceased, to that parent absolutely.
Scenario 5 – Intestacy with no spouse- no issue – no Parents -Brothers and sisters inherit.
Where a person dies intestate in respect of property and there is no surviving spouse, issue or parent, the property shall be distributed among the surviving brothers and sisters of the intestate equally, and if any brother or sister predeceases the intestate, the share of the deceased brother or sister shall be distributed among his or her children equally.
Scenario 6 – Intestacy with no spouse- no issue – no Parents – no Brothers and sisters inherit – Nephews and nieces inherit.
Where a person dies intestate in respect of property and there is no surviving spouse, issue, parent, brother or sister, the property shall be distributed among the nephews and nieces of the intestate equally without representation.
Scenario 7 – Intestacy with no spouse- no issue – no Parents – no Brothers and sisters inherit – no Nephews and nieces inherit – Next of kin inherit.
Where a person dies intestate in respect of property and there is no surviving spouse, issue, parent, brother, sister, nephew or niece, the property shall be distributed among the next of kin of equal degree of consanguinity to the intestate equally without representation. So how do we determine who is the closest next of kin? The Act states that “degrees of kindred shall be computed by counting upward from the deceased to the nearest common ancestor and then downward to the relative”.
See the Table of Consanguinity
Intestate: The law refers to a person who dies without a will as an “intestate”.Intestate: The law refers to a person who dies without a will as an “intestate”.
Issue: includes a descendant conceived before and born alive after the person’s death
Spouse: means either of two persons who,(a) are married to each other, or(b) have together entered into a marriage that is voidable or void, in good faith on the part of the person asserting a right under this Act; (“conjoint”)
“net value”: means the value of the property after payment of the charges thereon and the debts, funeral expenses and expenses of administration, including succession duty.
Preferential Share: For the purpose of section 45 of the Act, $200,000 is prescribed as the amount of the preferential share.