I have recently been concerned by the number of people that assume that their spouse will receive their entire estate should they die without a will (also called dying “intestate”). However, as we will briefly explore here, that will not necessarily be the outcome.
Ontario legislation dictates that the surviving spouse of a person who dies without a will is entitled to a “preferential share” of the deceased’s estate. Currently, the preferential share is $200,000. It is calculated only on the assets in the deceased’s name alone and excludes any jointly owned assets or assets that pass to a beneficiary by contract (e.g., life insurance or RRSP’s). The preferential share itself is calculated only after any debts and liabilities have been deducted from the estate.
Therefore, where there is no will, a surviving spouse would only be entitled to the entire estate in two cases: (1) if the deceased had no surviving lineal descendants (also called “issue”); or (2) if the net value of the estate is less than the preferential share.
Where the net value of the estate is greater than the preferential share, the surviving spouse is entitled to the preferential share plus: (a) one half of the net estate over and above the preferential share if there is only one surviving child and the remaining one half is for the child; or (b) one third of the net estate over and above the preferential share and the balance is for the surviving children, if there is more than one child.
One should note that the statutory definition of “spouse” for estate distribution purposes is limited to a legally married spouse. Thus a common law spouse will not share in a deceased’s estate if there is no will stating otherwise.
Of course, these statutory provisions will not apply if a will is validly prepared and executed. Thus the importance of having a will cannot be overemphasized.
Download the PDF: Concepts Newsletter – Spring 2010
Download the PDF: Ontario Funeral Service Association – June 2011