Regardless of age or personal wealth, there are many Canadians who do not have a Will. Although the thought of preparing a Will may seem to be premature or too burdensome for some, the consequences of dying without a Will can be severe.
If you die without a Will (this is referred to as dying “intestate”), the following complications/challenges will arise:
- You lose the opportunity to appoint who you want to act as the executor of your estate. Section 29 of the Estates Act provides the Court with discretion to appoint the spouse or common-law partner, the next-of-kin, or both as the estate trustee(s). Section 29 does not confer a priority on either to be appointed.
- You lose the opportunity to appoint legal guardians for your children or others who lack capacity. A Will typically stipulates who you would like to care for you children after your death. If you do not prepare a Will, you will lose this opportunity and the Office of the Public Guardian and Trustee (OPGT) may become involved in the lives of your children.
- You lose the opportunity to have a Power of Attorney for Property (POA for Property) and a Power of Attorney for Personal Care (POA for Personal Care) prepared. Usually, the lawyer drafting your Will will discuss POAs with you. A POA provides someone with the power to make decisions with respect to your personal care and your property if you become incapacitated.
- You lose the opportunity to provide your burial preferences. The deceased’s instructions to the estate trustee with respect to their burial wishes are not binding on the estate trustee. The estate trustee’s authority to make such decisions is restricted only by the legal duty to dispose of the remains in a dignified manner. However, providing your wishes in your Will may avoid future conflict and acrimony among loved ones. Your loved ones may have competing ideas with respect to what to do with your remains. Moreover, the expression of your wishes may relieve them of a stressful decision.
- Your children may receive assets before you intended. If a child inherits from you, they will receive their entire bequest upon attaining the age of majority. If you have a sizable estate, this may be more money than you want to leave an 18-year-old. If you prepare a Will, your lawyer will likely arrange a trust for young children so that they receive the money in smaller amounts over a specified period of time.
- Assets, which you may otherwise want to keep in your family, may have to be sold to pay taxes or other debts. If you do not have sufficient assets to pay taxes or other debts, the lawyer you retain to assist in preparing your Will may discuss purchasing life insurance with you. Proper life insurance may provide cash to pay debts on your death, which would relieve executors from having to sell estate assets.
- Your assets will be distributed pursuant to the intestacy rules, which may not reflect your intentions. Sections 44 through 47 of the Succession Law Reform Act (SLRA) provides how assets are distributed upon death when the deceased does not have a Will. If you are survived by only your spouse, the spouse will be entitled to the whole estate. If you are survived by your spouse and one child, the spouse takes the first $200,000 (their “preferential share”) and then the remainder is split between the spouse and child equally. If there are two or more children, one-third of the estate goes to the spouse (after they take their preferential share) and the rest will be divided equally among the children.
- If a common-law spouse dies without a Will, the other spouse has no entitlement as a beneficiary of the partner’s estate. The SLRA defines “spouse” as a married spouse and not a common-law partner. Individuals are increasingly living as common law and not marrying.
- You will increase your estate’s exposure to estate administration tax. A carefully drafted estate plan will usually involve two Wills—a Primary Will, which must be probated and on which estate tax must be paid; and a Secondary Will, which does not have to be probated and on which no estate tax must be paid. This has the potential to reduce your estate’s exposure to the estate administration tax, resulting in a greater percentage of your assets flowing to your beneficiaries. Learn more about probate.
- You lose the ability to explain your wishes. It is typically recommended that individuals discuss the wishes in their Will with their loved ones and future beneficiaries. By doing so, there is less likely to be conflict in the future among the beneficiaries and less likely to be resentment towards the deceased. This is particularly true if the assets of the estate are not being divided equally among children or the assets are not being transferred to a surviving spouse.
 Courts generally give spouse’s priority when determining who should administer an intestate’s estate, however, Courts are not bound to do so.