A common (and troubling) statistic is that approximately 50% of adult Canadians do not have a valid Will. The reasons why people haven’t yet prepared their Wills are varied but I’ll suggest one of the more important is that they don’t understand the consequences of dying without one.
A properly executed ‘Last Will & Testament’ is the legally binding document where you choose who will distribute your assets (belongings, land, money), and who they will distribute them to.
If you die without a legal Will, you are considered ‘Intestate’ and a piece of legislation called the Intestate Succession Act (ISA) will kick in to determine how your assets get distributed. If you are married (common law doesn’t count) and have no children, your spouse gets everything. If you have children and no legal spouse, the children will divide the value of your estate evenly. If you have a spouse and children, your spouse will get a large chunk and the children must divide the rest evenly. And if you have no spouse or children then your assets will be divided equally among your nearest blood relatives.
However, in many cases those scenarios are not remotely close to how people would like their assets distributed. In rare cases there is some wiggle room to apply to the court for an alternate distribution, but in most cases, you’re stuck with the rules under the ISA.
Now, the ISA determines who gets your assets, but your beneficiaries (the name for the people who will get your assets) aren’t automatically entitled to them upon your death. In most cases, your estate will have to be Probated. That’s the process of running your estate through the court system to legally determine who your beneficiaries are and who will be in charge of distributing the assets.
There are a number of things to understand about Probating an estate. First, it’s not free. Your beneficiaries will have to apply to the court for Probate. It’s also a legal process, so most people hire a lawyer to help them navigate the process. Your entire estate will be subject to Probate Tax which is a percentage of the value of the estate. It takes a number of months to complete and once Probate is open, your beneficiaries and the entire contents of your estate become pubic record.
If this situation sounds like something you’d prefer to avoid, the simple solution is to have your estate planning taken care of. It doesn’t hurt, promise.
If you're looking for guidance on your estate planning we'd be happy to help. You can call us at (902) 826-3070 to set up a meeting or contact us online. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
By: Dianna M. Rievaj, MBA, LLB - Managing Lawyer
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