Don’t Have a Will? Estate Law Changes for Spouses Are In Force March 1, 2021
If you have a spouse, but don’t have a Will, take note: As of March 1, 2021 there has been a big change to the law of Estates that could affect you. And if you are married but separated (with divorce on the horizon) then you should pay extra attention, because your spouse may end up with more of your post-death assets than you may realize.
In Ontario, the Succession Law Reform Act is the legislation setting out the regime for what happens to your Estate if you die intestate (i.e. without a Will). If at the time of your death you are married (which includes a same-sex marriage, as well as married-but-separated status) then in view of your intestacy your surviving spouse is entitled to receive a “preferential share” of your Estate. It goes like this:
- If you had no children together, then upon your death your spouse simply gets the preferential share “off the top” of your Estate.
- If you and your spouse had one child together, then your spouse gets the preferential share plus one-half of the balance of your Estate.
- If you had more than one child, it’s the preferential share plus one-third of the balance.
Up until March 1, 2021, the amount of the preferential share was set at $200,000. But under recent changes to that Act’s regulations that $200,000 has been raised to $350,000. This increase applies only to the Estates of those who die intestate on or after March 1, 2021. (For those who died without a Will prior to that date, the preferential share remains at $200,000).
It’s a hefty jump – and one that has been a long time in the coming. The last time the preferential share was increased was back in 1995, when it was raised from $75,000 to $200,000.
No matter what your marital status, having a Will is a good idea. But if you are married and separated from your spouse, it’s a particularly risky time to ignore the need for a comprehensive Will to deal with your assets. If you die before divorcing, your spouse could walk away with a very hefty and unintended “parting gift” from the failed marriage.