What Happens If You Die without a Will?

November 23, 2012 at 5:00 am Leave a comment

Most people think that if you die without a will, your spouse will automatically get everything, but this is not necessarily true. If you die without a will, then legally this means you died intestate.

When this happens, the decisions about who gets your estate no longer remain in your control. This could leave your loved ones without the financial support they need, not to mention, the added complexity in having a government agency, the Public Guardian and Trustee manage your children’s inheritance. And to top it all off, the Public Guardian and Trustee can pay themselves an administration fee directly out of your estate!

On death, your property is divided into two categories: jointly own assets and personally owned assets.

All jointly owned assets will automatically transfer to the surviving spouse. For the average Canadian, this usually includes your home and any joint bank accounts.

The remaining personal assets will form your estate. This would typically include items like your car, boat, prized artwork, jewellery, personal bank accounts and other investments.

From your personal assets, your spouse is entitled to the first $65,000.00 of the estate plus a 1/2 or a 1/3 share in the remainder of the estate. The other 1/2 or 2/3 portion gets shared equally by your children. While most people would not disagree with the current rules, it can produce some unforeseen results.

Let’s briefly consider the blended family scenario, where each spouse has a child from a previous relationship. What happens if both you and your spouse pass in a common disaster like a car accident and neither have executed a will? Many would agree the logical result should be your assets would go to your child, and similarly, your spouse’s assets would go to your spouse’s child.

Unfortunately, this is not what the law says will happen. So long as one spouse outlived the other spouse by a single second, that spouse will take their share from the other spouse’s estate. But what if it can’t be determined who died first? Then law deems that the younger person outlived the older person.

Once your spouse takes their share of your estate, that share forms part of your spouse’s estate. This could result in your spouse’s child getting at least 1/2 and possibly all of your estate, leaving very little to nothing left for your child!

So it is important for everyone to make sure they have properly planned for the disposition of their assets through an executed a will in order to ensure that all your loved ones will be adequately provided for after your death.

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