Intestacy
‘Intestate’ is the word used to describe a person who died without having a will. In Ontario, if you die without a will, the intestacy rules will determine what happens to your ‘estate’, which includes your money, personal belongings, investments, real estate, other property, and debts. If you have a spouse and no children, your estate will go to them. If you have a spouse and children, some of your estate will go to your spouse, and some may go to your children, depending on the value of your estate. If you have children, but no spouse, your estate will go to your children. If you do not have a spouse and you do not have any children, your estate will go to your closest living relatives. If you have no living relatives, your estate will go to the Ontario government.
The person who is responsible for dealing with your estate when you die is called an ‘estate trustee’ (also known as the ‘executor’, ‘representative’, or ‘administrator’). A will specifies who is to be the estate trustee(s). If you die without a will, someone will have to apply to the court to be appointed your estate trustee, which can involve a lot of time and money. Until someone is appointed estate trustee, nothing can happen to your estate. Your debts cannot be paid and your loved ones will not receive anything until an estate trustee has been appointed by the court.
If you die without a will, the intestacy laws will not give any of your estate to your common-law partner or step-children that were not formally adopted. However, a common-law partner or step-child may be considered a dependant and may be able to make a support claim against your estate. However, this requires an application to the court for such a determination to be made, which may be costly and cause delay.
If you die without a will and have a child under the age of 18 and/or an adult child with a disability, the other parent likely will receive ‘decision-making responsibility’ (which used to be called ‘custody’). If you do not have a will and the other parent is not able or dies with you, someone will have to apply to the court to get ‘decision-making responsibility’ for your minor child or adult child with a disability. If you have a will, you can create a trust for your minor child and/or child with a disability, which will attach conditions to your child receiving your estate and appoint a person (called the ‘trustee’) to manage the trust in accordance with your wishes. The trust will provide your instructions for the trustee, which can include that the estate is to be used to pay for the costs of keeping the family home, that the child receives money gradually over time, and/or that estate funds be used to pay for the child’s hobbies and extracurricular activities. If you have an adult child with a disability who is receiving government benefits and they receive property from your estate, they might not be eligible to continue to receive government benefits. Setting up a ‘Henson trust’ as part of an estate plan may permit an adult child with a disability to receive property from the estate and continue to be eligible for government benefits.
For these reasons, it is important to have a will, and any applicable trusts, to ensure that your wishes are communicated as to who will be your estate trustee; who will be your beneficiaries; how your estate is to be divided; and how your minor children or adult children with a disability are cared for and financially supported. By making a will, your loved ones (including common-law partners and step-children), friends, neighbours, and/or charities will receive your estate in accordance with your wishes.
If you wish to prepare your will for the first time, or change your current estate plan, I can help. I offer a free 20-minute phone consultation where you can inform me of your wishes and concerns, ask questions, and determine next steps. I look forward to hearing from you!
