Once upon a time, John Doe married Mary Smith. They eventually had two children, Bobby and Susie.
They were married for 20 years, and built a life together. They had a house, two cars and a dog, Rover. They were smart financial savers who built up savings for retirement and eventually paid off their mortgage. They had life insurance and a will.
Both John’s will and Mary’s will said that they left all their assets to each other and if their spouse was no longer alive, their estate would go equally to their children.
Their financial lives were solid and their estate plans were pretty straightforward.
Then, their lives changed. John and Mary decided to get a divorce. They had grown apart and no longer felt they should remain married. It was as amicable a divorce as one could ask for. Assets were split down the middle, an equal 50/50 split.
Fast forward a couple of years and John decides to remarry. If his marriage occurs before Jan. 1, 2022, his existing will is no longer considered valid. If he were to die, his estate would be considered “intestate,” meaning without a will to give direction as to what happens to his assets. (This is a whole other issue and the subject of a future column; in the meantime, check with your local legal professional.) This is also assuming that there was no premarital agreement in place.
If his marriage occurs in the new year, it’s a whole new story. As of Jan. 1, a new law comes into effect in Ontario that says the old will is not considered invalid. It is to be treated as though John’s former wife is no longer in the picture. It is as if she has passed away. Therefore, if John has not written and signed a new will after his new marriage, his estate would pass to Bobby and Susie. Nothing would go to his new wife.
As for Mary, nothing changes unless she writes a new will.
Many people did not know that by getting married – either a first, second or subsequent marriage – that their existing will becomes invalid. Changes in the legislation under Schedule 9 to Bill 245 are designed to help protect vulnerable seniors from “predatory marriages” – where there is a hidden agenda by a new spouse that preys on the vulnerability of the other spouse. This change stops the automatic revocation of wills, which may not be the intention of the testator (writer of the will). A new will can always be signed if the testator has the required level of mental capacity needed to make a new will. If it is John’s wishes to still leave his estate to his children, Bobby and Susie, and some to his new wife (or whatever his wishes), it will be set out in a brand new will.
The bottom line is, regularly have your will reviewed to reflect your current situation even if you don’t think there are any changes to be made. Laws are ever-evolving and you don’t want your intended wishes for your estate to be questioned.
This change effective Jan. 1 is for Ontario legislation only. British Columbia and Alberta have already implemented this change; other provinces and territories may be proposing this as well. Please check with your respective legal representative in your jurisdiction to see whether your local laws are being changed.
Never make assumptions when it comes to what will happen with your estate. It is always good to review your will every couple of years or when a material change has happened in your life situation.
Nancy Woods is a senior portfolio manager and investment adviser with RBC Dominion Securities. Nick Esterbauer is a lawyer at Hull & Hull LLP.
Send any questions or comments to asknancy@RBC.com
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