“Does all my money go to the government if I die without a Will?!”
This is one of the most popular questions I get. When I started practicing law almost 12 years ago, I found this question really surprising. I would think to myself “why would anyone ask that?”. Over time, I realized that different countries have different laws, and the estate laws in some countries are not as favorable as they are in Canada.
So what does happen when one dies intestate (without a Will) in Ontario?
The Succession Law Reform Act dictates how the money is distributed, and it might not be the way you want it but it does go to your next of kin.
Let us take the fictional example of “Jill” who has died without a Will in the following scenarios:
Also keep in mind that there are laws to determine a spouse, dependant (this may include a common-law spouse) and/or a child’s rights to the assets of the deceased when the deceased has not provided for them adequately in the Will, but otherwise, the Will allows you to dictate to whom your assets will go to and how.
Each estate needs to be looked at individually for what the deceased owned, how it was owned (i.e. jointly or individually) and if any assets had a beneficiary designation (i.e. the beneficiary of an RRSP).
From a parent’s perspective, a Will becomes important to establish a trust that controls the flow of money by directing when the money is to be paid to the child (i.e. 1/3 at the age of 21, 1/3 at 25 years and the rest at 30 years of age). After all, do you really want your minor children to receive your “hard earned” money all at the age of 18?
As a parent myself, the way I see handing over all the money at the relatively young age of18 is like letting a kid eat all the treats in their Halloween trick-o-treating bag the very same night. While that is my personal opinion, in my experience, most parents share this view. By establishing a trust in the Will, the funds are managed by the named trustee, and you may leave your trustee direction as to when the funds can be used for the benefit of the child while the funds are held in trust, such as for their health and education.
Since we are on the topic of children and providing for them through a Will, let’s touch on the topic of custody of your minor child after your death. The Children Law Reform Act provides that a parent has the right to appoint someone to have custody of their minor child in their Will. The custody appointment in the Will only lasts for 90 days after it takes effect, and then the appointed person must apply for permanent custody. Ultimately though, the decision of whether or not the applicant will be granted permanent custody, will be determined by the court.
That being said, the court will consider many factors including the child’s wishes and relationship with the person applying for custody. Sometimes a parent will say something to the effect of, “why does the court get to decide? It should be my choice; they’re my kid”. It is important to remember that your child is their own person and has their own rights. Also keep in mind that a parent’s stated wishes are important as it will serve as persuasive evidence. The courts ultimate goal is to determine what is in the best interest of the child, so all the evidence will be taken into account.
To keep things interesting in my professional world, I like to share absurd examples, as it helps illustrate my point. For example, how about if the individuals designated in the Will to have custody (of the child after both parents have passed away) have secretly become drug lords (thinking of the hit TV show “Breaking Bad”) and this only comes to “light” after the passing of the parents. More realistically, it is very possible the named custodian has moved across the world, does not have financial stability, or other things have transpired in their life and therefore are no longer the best choice for the child.
Children aside, the Will should cover many other important wishes of the deceased, including specific items they want to leave to specific people, cash gifts in any quantity, and the powers or limitations of the estate trustee. The Will should also discuss what happens when one of the beneficiaries have passed away, or in the case of someone who has a spouse and children, they have all passed away. Some couples will tell me if they all die, each spouse’s share should go to their respective family. As their lawyer, it is my job to explain to them what that really means and how order of death can play a role in which side of the family might end up getting everything.
A Will also allows you to designate charities as a beneficiary (either as a percentage of your entire estate or as a recipient of a specific gift) which dying intestate will not allow you. Also, if you have an intended beneficiary that is disabled, having a Will is vital to ensure this beneficiary is provided for as you have intended and in the beneficiary’s best interest.
I have touched on a few good reasons to have a Will, but there are so many more. People ask me about “Wills kits” and my response is, “would you use a “kit” or YouTube to rewire your entire home electrical, panel and all, if you had no previous experience?”. Probably not. A “kit” will not talk you through the “grey” areas that you have not thought through because “you don’t know, what you don’t know”, nor can it give you advice on how to estate plan going forward.
Now that we have considered the importance of having a Will, let’s jump into the Living Will. Most people know that a Will comes into effect when one dies. So what does a Living Will do and when can it be used?
The term Living Will is otherwise known as an “advanced health care directive” or, simply, “advanced directive”. Essentially, it is a document that addresses wishes about your future care with respect to your health if you become mentally incapacitated. It can cover everything from forbidding the use of medical treatments to receiving experimental treatments. In other countries, such as our neighbours to the south, a Living Will is a legal document. In Ontario, it is not legally binding and whether it may be enforceable is uncertain. However, there have been couple of legal cases where the courts have enforced the advanced directive.
The Living Will should not be confused with the Power of Attorney for Personal Care. The Substitutions Decisions Act allows you to appoint someone you trust to make decisions for you in the event you become mentally incapacitated. This appointment is done in a document called the “Power of Attorney for Personal Care”, and is a legally binding document. The decisions your appointed attorney will be making for your personal care may include health care, nutrition, shelter, clothing, hygiene and safety.
The “advanced directive” can form part of your Power of Attorney for Personal Care to give your attorney guidance regarding your wishes, but it does not need to. I encourage you to speak with the person you have appointed or want to appoint as Power of Attorney for Personal Care and ensure this individual knows your wishes. There is no right or wrong answer as to who you appoint, but ideally, someone who can respect your wishes, is easily reachable, and is “level headed” to make tough decisions during emotional moments.
Make the time — better late than never!
Talking about what should be stated in your legal documents pertaining to your wealth and health is often not fun and is therefore very often put off; but if you consult a lawyer to get legal advice and guidance, and you will find that with the help of a professional the task will not be as overwhelming and the results will be a clear and coherent Will and Power of Attorneys. I ask my clients lots of personal questions regarding their personal lives (their relationship with their selected estate trustee and power of attorney, and beneficiaries and loved ones excluded from the Will or Power of Attorney) and financial life to ensure I have the “full picture” and have provided advise and guidance in the appropriate areas.
Leave your loved ones with a peace of mind, and not costly complications and/or emotional anguish.
Disclaimer: Information contained in this article is intended to convey general information only. The information contained in this article is not legal advice or replacement for legal advice.
This blog posts written by guest blogger, Safiyya Vankalwala. Safiyya runs a practice focusing on Wills & Estates, Corporate, Commercial Leasing, Real Estate, and Family law at Korman & Company Professional Corporation since 2006.
