DYING WITHOUT A WILL

When an individual dies without a will in ontario, the surviving spouse is entitled to the first $200,000 of the value of the estate. The remainder of the estate will be distributed as follows:

1. If the deceased had no descendants, the surviving spouse Will receive the remainder of the estate;

2. If the deceased had one child (or descend ants of a deceased child), one half will go to the surviving spouse and one half will go to the child (or their descendants); or

3. If there is a surviving spouse and more than one child (or descendants of a deceased child), one-third will go to the surviving spouse and the remaining two third will be divided between the deceased's children (or their descendants per stirpes if a child is deceased).

If a spouse has already received some property under a will, that amount will be deducted from the amount they would be entitled to under the division set out above. For these purposes, “SPOUSE” strictly means a married spouse, and does not include a common-law partner.

Common Disasters

In Ontario, where two people die simultaneously, they are deemed to have survived each other. Jointly held property is deemed to be held as tenants in common.

For an insurance policy, unless the contract provides otherwise, where a person insured, or a group person insured, and a beneficiary die at the same time or in circumstances rendering it uncertain which of them survived the other, the insurance money is payable as if the beneficiary had predeceased the person insured or group person insured.

Family Property

A surviving spouse may apply for a division of family property, or “equalization payment”, within six months of the date of death (see section 17.4.9 of chapter 17, “Family Property”, for a discussion as to which types of assets are considered family property in Ontario). if the spouse makes such an application, they will not receive anything under the will, or any distribution in the case of an intestacy.

One-half of the value of a jointly owned property will be included in the assets of the deceased person when determining the amount of the equalization payment. However, this can be problematic as the asset itself has now been transferred to the survivor, and therefore will not be available to satisfy a family property equalization payment.

The proceeds of any insurance policy or lump sum payments under a pension plan owned by the deceased and paid to the surviving spouse

will offset any equalization payment owing to that person. In fact, if there is an excess, the personal representative is allowed to recover it for the estate.

Common-law partners do not have the right to apply for an equalization payment upon relationship breakdown. However, a surviving common-law partner may be able to make an unjust enrichment claim.

In the event of death, the non-owning spouse only has a right to retain possession of the family home for 60 days after the spouse’s death. If a spouse dies owning an interest in a family home as a joint tenant with a third person and not with the other spouse, the joint tenancy will be deemed to have been severed immediately before the time of death. This means that the deceased’s interest will form part of his or her estate.

Dependent's Relief Applications

In Ontario, the following individuals will be entitled to make a claim against the estate if they w er e financially dependent upon the deceased at the time of death:

1. A spouse (which could include a former spouse);

2. Acommon-law partner, where the couple had cohabited together in a conjugal relationship continuously for at least three years;

3. A child, including, a step-child or grandchild;

4. A parent, including a step-parent or grandparent; and

5. A sibling.

For the purposes of making a dependant's relief order, the court will consider certain assets to be part of the estate, even though those assets did not form part of the estate for probate purposes. These assets will include:

1. Gifts made on the deceased’s death bed;

2. Money (and interest), in an account in the name of the deceased in trust for another;

3. Joint bank accounts held by the deceased and a third party;

4. Any other disposition of property made by a deceased whereby property is held at the date of his or her death by the deceased and anoth er as joint tenants;

5. Any disposition of property made by the deceased in trust or otherwise, [0 the extent that the deceased at the date of his or her death retained a power to revoke such disposi

tion, or a power to consume or dispose of the principal (but this clause does not affect the right of any income beneficiary to the income accrued and undistributed at the date of the death of the deceased);

6. Proceeds of any insurance policies effected on the life of the deceased and owned by him or her, notwithstanding that these proceeds are payable to a designated beneficiary;

7. Any amount payable on the death of the dece- ased under a policy of group insurance; and

8. Any amount payable under a designation of a beneficiary.

Therefore, if the deceased leaves a spouse who was financially dependent upon him or her, and the deceased had an insurance policy or an RRSP plan that was payable to children from a previous marriage, it is possible that the spouse Could make a claim against those assets.

With jointly held property, the value to the estate will be the amount of the deceased’s interest in the property. A dependant’s relief application must be made within six months from the date on which letters probate or letters of administration are granted.