Dying Without a Will

January 18th, 2017

When I ask clients whether their wills and powers of attorney are current and up to date, many answer yes, some answer no and a few tell me that they have no will or POA’s.

The implications of no power of attorney for property are straightforward. For example, a joint owner of real estate cannot sell the property! Likewise, with no power of attorney for personal care you have no idea who will make decisions about your medical treatments.

A person who dies without a will (“intestate”) represents a more complex case. The rules vary by province but here in Ontario they are defined by the Succession Law Reform Act.

To get a sense of what happens without a will, you can get an overview at the Ontario Attorney General’s site which shows, for example, that if there is no spouse, no children and no next of kin, the province takes possession of the estate. I do not know about you, but the thought of Kathleen Wynn and Charles De Sousa getting their hands on my hard-earned assets is decidedly less than satisfying, to put it mildly.

I asked a professional colleague with expertise in this area to explain how inheritance works when someone dies intestate and here’s what I learned:

  • The courts determine who will be appointed to settle the estate. The Estate Act sets out the priority of who can apply to be the estate trustee and in what order. If you apply, everyone ahead of you in the line would need to complete a “renunciation”. Similarly, the court would need to be satisfied that your siblings had chosen not to apply as they would have equal status with you. You would also have to be a resident of Ontario. Otherwise a trust company would need to be retained.
  • You would need to swear an affidavit stating that you have diligently sought a will and are satisfied that there is none. This involves advertising in the newspapers. The court will require that the deceased’s safety deposit box has been searched. Banks will require a court order before allowing the family to open the box, in the presence of a bank official.
  • Wills have provisions that facilitate settling the estate. Examples include provisions for charitable gifts which would reduce taxes. Another is the power to settle debts. Without a will, any objections by any of the beneficiaries about the way the estate was settled can only be resolved by the courts.
  • The situation becomes extremely taxing (no word play intended) if minors are beneficiaries. A trustee will need to be appointed until the beneficiary reaches 18, when they are entitled to their full inheritance at age 18. It doesn’t take much imagination to think about what can (and has) happened in situations like this (Hint: fast cars and large parties).

The cost and demands on your family’s time will depend on the complexity of your personal situation. A 2010 survey of Ontario fees carried out by Canadian Lawyer magazine in 2010 found that lawyer’s fees to prepare a will varied from about $300 to $2,100 depending on complexity.

If you don’t have a will, take the time and write the cheque. You will be saving your family tens of thousands of dollars and months and years of their time during what is already a highly stressful period.