Having a Will is going to save your family a lot of grief, especially if children are involved. Register file photo

What happens if I do not have a Will?

By  Amanda J. Stacey, Catholic Register Special
  • November 7, 2016

There are plenty of reasons for having a Will, especially when it comes to the role it plays in dealing with children and their future.

When a person dies without a Will, or intestate, the consequences are governed by a set of rules that impacts both the surviving spouse and any minors. In Ontario, the laws of intestacy are set out in the Succession Law Reform Act (SLRA).

It may come as surprise that where an individual is married with children and dies without a Will, the whole of his or her estate does not pass to the spouse.

The rules in the SLRA provide that the estate will be divided between a spouse and the children. The spouse will receive the first $200,000 of estate assets (called the “preferential share”). The balance of the estate will be split in proportions that depend on the number of children.

For example, if there is a surviving spouse and one child, the balance of the estate will be divided equally between the spouse and child. Where there is a spouse and two or more children surviving, the spouse will receive one-third of the estate and the surviving children will split the remaining two-thirds.

It should be noted that only married spouses can inherit in these cases. Common-law spouses are out of luck and would have to make a claim for support to receive anything from the estate.

Where an individual dies without a Will, someone will have to apply to be appointed as estate trustee to administer the estate. There are rules set out in the Estates Act that govern who will be entitled to apply to be the estate trustee. Those rules provide that the court has the discretion to grant the administration of the estate to a married or common-law spouse of the deceased, or the next of kin of the deceased, or both.

Where an individual dies leaving minor children with no surviving parent, the minor children will require a guardian. An individual will be required to apply to court for custody of the minor children.

In order to be granted authority to deal with a minor’s property, an individual would also have to apply to be the guardian for property of the minor child. It should be noted that although an individual can include a provision in a Will setting out who they wish to have custody and guardianship of a minor child, the individual named will still be required to apply to court to be granted custody and guardianship.

However, the benefit of having a Will with this type of provision is that it is good evidence of who the deceased wished to have custody and guardianship of their children, in the event of a dispute over this question.

In Ontario, an individual under the age of 18 years cannot inherit property directly — it must be held until he or she reaches the age of 18. Typically, where an individual intends to leave property to a minor, he or she will make a Will that establishes a trust for that minor. That trust will typically require that the property be held beyond the age of 18 years, since it’s generally agreed that 18 is too young an age to inherit large sums of money or valuable property.

The terms of the trust will name one or more trustees, who will be responsible for holding, investing and paying out funds from the trust in accordance with its terms. Where an individual dies intestate and leaves minor beneficiaries, the entitlement of those minor beneficiaries must be held for them until they reach the age of 18 years (and no longer than that).

Thus, where there is no Will, there are two issues: (1) the minor children will inherit everything at 18, and (2) there is no trustee for the minor’s inheritance.

There is nothing that can be done about the first issue. As for the second, where the minor does not have a court-appointed guardian for property, the Office of the Children’s Lawyer (OCL) will step in as trustee of the funds. The individual with custody of the minor child can request funds from the OCL as needed.

Alternatively, an individual can apply to be the child’s guardian for property and request transfer of the child’s funds to him or her for management until the child attains the age of 18.

Clearly, the importance of having a Will is magnified where minor children are involved. In order to have some control over who will raise minor children and manage their inheritance for them, it is imperative that an individual seek the advice of an estate planning lawyer to include the necessary clauses in their Will.

(Amanda Stacey is a member of the Social Impact Group and Private Client Services specialty groups at Miller Thomson. Stacey provides both general counsel and specialized tax advice to charities and not-for-profit organizations across Canada and abroad and provides estate planning advice to individuals and families.)

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