Area of Law: Wills, Estates and Powers of Attorney
Answer # 142
Rights of spouses and dependants
Region: Ontario Answer # 142Although the main purpose of a Will is to allow people to decide who gets their property when they die, the law establishes restrictions to protect the rights of spouses and dependants, even where they are not included in the Will, or are to receive less than the law requires.
To properly draft a Will or Power of Attorney; or if you are involved in an estate dispute and need help, ask a lawyer now.
Rights of spouses
The Family Law Act protects the rights of spouses. When a person dies, a surviving spouse has a choice. They can choose to inherit whatever you left them in your Will, or they can choose to receive what is called an equalization payment.
An equalization payment means that a calculation is made of what each spouse owns and what their debts are as of the date the one spouse died. The spouse with the greater property value total then pays the other spouse half of the difference. For example, if the total for the husband was $100,000 and the total for the wife was $60,000, then the difference between them is $40,000. If the husband died, the wife would be entitled to half of that difference, which is $20,000, even if she was not given anything in the Will. By choosing an equalization payment instead of an inheritance under the provisions of the Will, the Will is not cancelled, but gifts to other people will be reduced as a result of the payment.
Special rules apply to several different types of property when calculating the property of each spouse, and the calculation is usually complicated. Equalization payments are normally calculated by a lawyer.
Rights of dependants
The second type of person who may have rights to part of an estate, even if they are not included in a Will, is a “dependant.” The Succession Law Reform Act (SLRA) and the Family Law Act list certain people who you might have to provide for if they are determined to be “dependants.” These include your spouse, common-law spouse, parent, grandparent, child, grandchild, brother and sister.
Who is a dependant?
To be a dependant, a person has to show that they were receiving financial support from you, or that they had a legal right to receive financial support from you before you died. A dependant may have to prove this in court. If the court decides that the person is a dependant and that person can show a need for financial support, then the court may order a certain amount of money to be paid to them out of the estate.
Changes to the SLRA and property rights of separated spouses
Bill 245 Accelerating Access to Justice Act, 2021 came into effect January 1, 2022, making a number of changes to the Succession Law Reform Act (SLRA).
As of January 1, 2022, spouses that have been separated, but not divorced, for at least 3 years, or have a valid separation agreement or court order, are treated the same as divorced spouses. This means that a separated spouse who has been designated as an estate trustee or a beneficiary in a Will is not entitled to the benefits under the Will. Previously, in this situation, unless the spouses had a separation agreement with specific provisions for property rights, the ex-spouse could apply for part of the estate under family law.
Getting the legal help you need
Wills are extremely important documents and relatively inexpensive to have prepared professionally. If you think that you may be entitled to more from an estate than the amount; or if you are involved in an estate dispute or have an issue with your estate trustee and need help, ask a lawyer now.
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