Ontario survivors could now receive more if their spouses die without a will

Ontario clients whose spouses die intestate could now inherit more of the spouse’s estate.

A surviving spouse in Ontario is now entitled to $350,000, up from $200,000, as their preferential share of their spouse’s estate if that spouse dies without a will. The change applies to deaths that occurred March 1 or later.

The Ontario government made the change on Feb. 16 to the Succession Law Reform Act (SLRA), which governs what happens in an intestacy — which is when a person dies without a valid will. Estate law in Canada is governed by the provinces and territories.

Under Ontario estate law, a surviving spouse receives all property in an estate when the married couple had no children and the deceased spouse did not have a will.

If the couple had one child, the surviving spouse would receive the preferential share of the estate (now up to $350,000) plus one-half of the rest of the property in the estate, with the other half going to the child. If the couple had two or more children, the surviving spouse would receive the preferential share, plus one-third of the remainder of the property, with the other two-thirds divided among the children equally.

When the value of property in an intestacy is less than the preferential share, the surviving spouse receives all the property in an estate whether the couple had children or not.

Common-law spouses in Ontario are not entitled to a share of a partner’s estate on an intestacy. However, they may apply to court to receive a share of the estate under dependent support provisions in the SLRA.

Under current legislation, surviving spouses would receive their legal entitlement, including the preferred share, under an intestacy if the couple were separated but still married at the time of the spouse’s death.

However, under a proposed change to estate legislation in Bill 245, tabled by the Ontario government Feb. 16, a separated surviving spouse would not be entitled to a share of the deceased’s estate in an intestacy.

Under the proposed change to the SLRA in Bill 245, a surviving spouse would be considered to be separated if the couple were living apart due to a marriage breakdown at the time of the death for three years or more; had a valid separation agreement; had a court-ordered settlement agreement; or a family arbitration award had been made.

These changes are part of a broader effort by the Ontario government at reforming estate law.

In Bill 245, Ontario proposed allowing the virtual witnessing of wills and powers of attorney on a permanent basis, as well as repealing the existing provision in the SLRA that automatically revokes a will upon marriage.

On Feb. 12, Ontario announced that a small estate in Ontario would be defined as those worth up to $150,000, up from $50,000, effective April 1. Small estates are eligible for a simplified probate process. Estate administration tax — sometimes referred to as probate fees — remains due on the portion of the estate worth more than $50,000.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.