Everybody should have an estate plan – namely, a Will and powers of attorney, at least.
What happens to your existing plan if you marry or separate/divorce?
If you marry, you will (perhaps unwittingly) revoke your Will automatically in Ontario, unless your existing Will specifically says that you made it “in contemplation of marriage”. Therefore, if you marry (and, ideally, before you marry), you should review your estate plan and make any changes that are necessary because of your marriage, especially if you plan to have children, for example.
If you separate from your married spouse, it does not automatically revoke your Will. Spouses are considered “separated” under the Ontario Family Law Act when they live separate and apart with no reasonable prospect that they will resume cohabitation. Separated spouses may share common accommodation as long as they live independent lives.
A separation will not impact your Will. If you are separated when you die, your spouse may still benefit from your Will, unless it is changed after you separate. Your surviving spouse will maintain his or her entitlement under your Will and other estate planning
after a separation, unless you make changes to your estate plan.
Therefore, if you separate (and if your separated spouse is your named beneficiary in your Will), you will need to promptly review your estate plan on or before you separate, or you may experience something you did not plan if you unexpectedly die.
If you have no Will when you separate, your separated spouse will likely fall within the definition of “spouse” legally and be entitled to share in your estate based on Ontario’s laws for intestacy (the Succession Law Reform Act) – another reason you should review your estate plan as of your separation. In Ontario, your surviving, married spouse will be entitled to your entire estate absolutely if you have no children. If you and your separated spouse do have children, your surviving spouse is entitled to a preferential share ($200,000) of your estate (off the top) and an equal portion of
the balance of your estate.
Not only should you review your estate plan on separation, but you should also enter a separation agreement as soon as possible, including addressing what, if any, rights each spouse is to have on the death of the other.
A “divorce” legally ends the marriage and permits former married spouses to remarry (unlike a “separation”). Many married spouses resolved their relationship breakdown issues by negotiating a separation agreement, rather than a Family Court proceeding. However, you must ask the Court to grant a divorce order – only the Court can do so.
A divorce does not automatically revoke your Will. Rather, a divorce will only automatically revoke the parts of your Will that address your former spouse. All other provisions in your Will or other estate planning that do not relate to your former spouse will remain the same and in effect after your divorce. Your Will will be treated legally as though your former spouse died before you.
Effectively, this law is meant to invalidate any gifts made by you to your former (divorced) spouse, just in case you did not properly update your estate plan after you separated and divorced. Any specific gifts you made to your spouse will instead be directed to the residue of your estate. If your former spouse is entitled to the residue of your estate (the assets left over after the debts are paid and other specific gifts distributed), that benefit will alternatively be directed to the alternate beneficiary. If no alternate is named, then intestacy will result and your estate assets will be distributed according to the Succession Law Reform Act of Ontario.
In addition, if you named your (divorced) spouse as your estate trustee in your Will, a divorce will automatically revoke the appointment – more protection for you. Instead, the alternate will be appointed and, if no alternate is named, intestacy will occur for your estate. However, if no alternate is named in your Will, the rules of intestacy will govern. Your estate will be treated as though there was no will. Generally, a next-of-kin will need to apply to the Court to be appointed estate trustee.
Therefore, it is very important that you review your estate plan, particularly your Will and powers of attorney, if:
a) you plan to marry;
b) you separate; and/or
c) you divorce.
There are other matters you should be considering, too, as part of your overall plan on separation or divorce. These relate to your other assets that may not be addressed by your Will (or not addressed properly), such as RRSP and pension designations, life insurance beneficiary designations and other assets for which you can designate a beneficiary, for example.
Therefore, when you marry, separate or divorce, you should review:
1) your beneficiary designations, such as RRSPs, pensions, RRIFs, TFSAs and insurance policies;
2) your jointly-held property, unless you own it as “tenants-in-common”, to ensure that your separated or divorced spouse does not take that property automatically by operation of law on your death; and
3) your guardianship provisions in your estate plan, so you address your intention for the care of your child(ren) if you die, particularly if both you and your separated/divorced spouse are no longer living.
This WARDSPC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.
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