Planning for your passing may be an uncomfortable experience, but creating an estate plan is one of the most important things you can do, and putting it off can create problems. The unexpected can happen, and when a loved one dies without a will, confusion and emotions can run high. So, what happens if you die without a will in Ontario? This blog post will outline the basics of what happens when an individual dies without a will and highlights the benefits of speaking with a trusted lawyer about your estate plan.
Do I Need a Will?
A will is a legal document prepared by an individual (the “testator”) which sets out how they want their assets (money and property) handled after they die. Depending on your specific circumstances, your will should include information regarding the following, if applicable:
- Your executor (the person you have appointed to carry out your directions in the will);
- Your assets and a distribution plan;
- Your appointed guardians for any minor children or other dependents; and
- You’re appointed caretakers for any pets.
A benefit of having a properly prepared will is ensuring that there are clear instructions for your loved ones to follow after you’ve passed. A will can also help reduce the amount of taxes your estate pays.
Distribution of An Estate Without a Will in Ontario
If you die without a will (“intestate”), your estate will be administered in accordance with the Succession Law Reform Act, R.S.O. 1990, c. S. 26. Under this Act, the deceased’s estate will be distributed as follows:
- If a spouse survives the deceased and they had no children: the spouse is entitled to the entire estate, or
- If a spouse and children survived the deceased: the spouse is entitled to a “preferential share” of the estate ($350,000) and the spouse and children receive the remainder of the estate in equal entitlements.
If the estate’s value is less than $350,000 (after debts, the estate administration tax, and any other estate expenses), the spouse will receive the entire estate.
- If children survived the deceased: the children are entitled to the estate in equal shares.
However, these rules do not apply to common-law spouses. In Ontario, common-law spouses cannot inherit from an intestate estate. However, if a common-law spouse held property jointly with the deceased, they may still stand to inherit that specific property.
What if the deceased did not have a spouse or children?
If the deceased did not have a spouse or children, the estate is distributed as follows:
- First, to the deceased’s parents (either equally or, if only one parent is alive, to that parent),
- If both parents are deceased, to the deceased’s siblings,
- If one or more of the deceased’s siblings have passed away, their share will be distributed equally amongst the deceased sibling’s children, or
- If both parents and all siblings are deceased, to the deceased’s nieces and nephews.
If, however, the deceased had no “next of kin”, the deceased’s estate becomes Crown property.
The Process for Distributing an Estate Without a Will in Ontario
If the deceased died without a will, an Ontario resident with a financial interest in the estate may apply to the court to distribute the estate. In cases of intestacy, a direct family member may be eligible to apply. Typically, if multiple individuals are competing for the position, the court will choose the closest relative, for example, the court would likely choose a surviving spouse over a child. The person appointed is called the “estate trustee without a will” and will act as the executor of the intestate estate.
As a first step, it’s crucial to confirm that the deceased did not prepare a will, or make reasonable efforts to confirm that a will did not exist. Verifying whether the deceased had a will is not always as clear-cut as it may seem, and what is or is not “reasonable” may depend on the circumstances.
Once confirmation is obtained that the deceased did not have a will, the estate trustee may apply to the court to obtain a “Certificate of Appointment” to confirm their ability to act as the estate trustee without a will. The court will require a deposit be paid for the Estate Administration Tax, the amount of which is based on the deceased’s estate assets. A tax is not charged on estates valued under $50,000.00, however, for estates with higher values, a charge of $15.00 for every $1,000.00 of value will be calculated. The estate trustee may face additional charges, such as legal fees and a surety bond in certain circumstances.
Once a Certificate of Appointment has been issued and the Estate Administration Tax has been paid, the estate trustee will be responsible for acting as the executor of the intestate estate. Administration tasks include paying the estate’s debts and administering the estate assets following the distribution guidelines in the Succession Law Reform Act.
An estate trustee must file an Estate Information Return no later than 180 calendar days after obtaining a Certificate of Appointment, which will provide details regarding the estate assets.
The road to the distribution of an intestate estate can be complicated and lengthy, particularly when disputes arise among beneficiaries and/or the estate trustee. These disputes can cause additional delays and incur further charges which may not be necessary.
The experienced estate lawyers at Campbells LLP have been assisting clients in estate matters since 1999. Our firm has helped clients address various aspects of estate law, including estate planning and estate litigation. Our lawyers are thorough, efficient, and focused on delivering the best possible outcome for every single client. Contact us online or call our office at (905) 828-2247 to speak with one of our lawyers.