Have you recently gotten engaged, married or started living together with someone? Conversely, has a romantic relationship recently ended?
Whenever a significant relationship begins or ends, it is always a good idea to review your estate plan. Do you need to update your Will and Powers of Attorney? Should you change ownership of an asset? What about your beneficiary designations for life insurance policies and registered accounts? These conversations should be had not only with your family lawyer (for example, life insurance policies are often used to secure child support obligations), but also with your estate planning lawyer.
Relying on the default rules under the Succession Law Reform Act (SLRA), which will be amended on January 1, 2022, can be problematic, even with the new changes that are coming.
Legal Marriage Will No Longer Revoke a Will
After the end of December 2021, legal marriage will no longer automatically revoke an existing Will in Ontario. Interestingly, entering into a so-called “common law” relationship has never automatically revoked an existing Will in Ontario.
This was a very old rule and it always amazed me how little known it was among the general population! The removal of this rule brings Ontario in accordance with most other Canadian provinces and likely also with most people’s expectations.
This change was enacted, in part, as a response to so-called “predatory marriages,” some of which made the news. Under a typical predatory marriage, an older man, often a recent widower and suffering from health problems, would marry his much-younger caregiver. Upon his death, the new wife stood to inherit the “preferential share” of his estate, set aside for legally married spouses under the “rules of intestacy” (dying without a Will). Not surprisingly, this usually greatly distressed the children from the deceased’s first marriage, who would often see their inheritances greatly diminished.
Please note that if you get legally married in Ontario BEFORE December 31, 2021 and if your Will is NOT a special kind of Will called a “Will made in contemplation of marriage”, then it will be subject to automatic revocation and you will have no Will until you make a new one. There is currently NO provision for the automatic “re-animation” of Wills which were or are revoked by legal marriage prior to December 31, 2021.
If you want to include your new partner – whether or not you ever intend to get legally married to each other – it is a very good idea to review your existing Will and to see if it still makes sense, or if it should be updated to take into account your new relationship.
Separation Will Soon Be Similar to Divorce
While separation often leads to divorce, separation and divorce are two different concepts and should not be conflated! However, after the end of December 2021, if you become separated from your spouse to whom you are legally married, then your former spouse will generally no longer be entitled to receive from your estate under your Will or under the rules of intestacy. In this regard, separation will soon be similar to divorce, in that divorced spouses are already generally disentitled from receiving anything under a Will or under intestacy (with limited exceptions).
The new wording under the SLRA will read as follows:
A spouse is considered to be separated from the testator at the time of the testator’s death…if before the testator’s death,
(i) they lived separate and apart as a result of the breakdown of their marriage for a period of three years, if the period immediately preceded the death,
(ii) they entered into an agreement that is a valid separation agreement under Part IV of the Family Law Act,
(iii) a court made an order with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage, or
(iv) a family arbitration award was made under the Arbitration Act, 1991 with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; and
at the time of the testator’s death, they were living separate and apart as a result of the breakdown of their marriage.
The legislation goes on to note that if you separated PRIOR TO January 1, 2022 that this provision may not apply. As such, if you have already started living separate and apart from your spouse to whom you are legally married, or if you are contemplating doing so, then additional steps may need to be taken to remove that person as a beneficiary or potential beneficiary (i.e. update your Will or create a new one!).
Reminder: Intestacy Still Only Includes Legally Married Spouses!
One thing that is NOT currently set to change is that under the rules of intestacy, the term “spouse” still only refers to legally married spouses. As such, if you die without a Will, your “common law” partner may be excluded as a beneficiary of your estate. In this regard, legally married spouses and “common law” partners are still treated differently in Ontario.
Your loved one may still be entitled to receive something from your estate if he or she brings a successful “dependant’s relief” or trust claim, but is it really fair to put him or her in such a position, where litigation may be necessary? This undesirable situation can often be easily avoided by creating a valid Will which fulfills any obligations you may have to your financial dependants, like a spouse (legal or “common law”) or minor children.
If you would like to review your estate plan, please contact our Wills & Estates team to schedule an appointment.