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Jun 25 2012

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What If You Die Without A Will

What If You Die Without A Will 

What If You Die Without A Will

What If You Die Without A Will

If you do a search for “what percentage of people don’t have a will”, you’ll find it’s well over 50%. As a certified financial planner (CFP), I remind my clients to get this important document in place and make sure to update it whenever there is a significant change in their life. So what happens if you die without a will?

Dying without a will is referred to as intestate.  In Ontario, the first $200,000 of your estate will go to your surviving spouse. This is referred to as the “preferential share”. The remaining balance of your estate will be divided between your surviving spouse and children or grandchildren and is referred to as the “distributive shares”. If you don’t have a surviving spouse or children, your assets would pass to your parents or your siblings. If you don’t have any surviving relatives, your estate would become the property of the government.  For more information, you can refer to the The Succession Law Reform Act. It governs wills and estates in Ontario. The act constitutes what  a valid will is and the laws surrounding how a will must be executed. The act also states the laws surrounding the laws of inheritance when a person dies without a will. The lines of succession or degrees of kinship are explained.

If you are living with a common-law partner, be warned that provincial intestacy legislation usually does not recognize your partner as a spouse, so if you don’t have a will, your partner could end up with nothing.

If you draft a will, you can choose your own executor or personal representative. If you die without a will, the court get to choose who administers your estate. Usually they give preference to your surviving spouse, followed by your adult children or grandchildren, your parents, and or siblings. These individuals may be great executors, but on the other hand, do you really want your assets managed by your brother whom you haven’t spoken to in the last 10 years? Without a will, it could happen!

In addition, without a will nothing can be done with your assets until the court appoints an administrator, and that takes time. If you have assets that require constant management, such as real estate, business interests or other investments, they could end up being unmanaged until the administrator is appointed. In addition, your surviving dependents would not be able to access any of your funds until an administrator is appointed, and that could leave them in financial difficulty.

There are different ways to prepare your will. You can buy a will kit and follow the instructions, do a holographic will which is done in your own handwriting or seek a lawyer to prepare it for you.

But perhaps the greatest reason for preparing a will now is to spare those you care about the anxiety associated with settling your estate at a time when they are dealing with their grief over your death. Do it for them!

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