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It’s always important to have a will. And that’s the case now more than ever. As I recently wrote, there’s been a legal change that will affect the wills of some couples who marry.

Here are some scenarios that illustrate my point.

Once upon a time, John Doe married Mary Smith. They eventually had two children, Bobby and Susie.

They were married for 20 years. They built a life together in Ontario. 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.

The unfortunate thing is that, unexpectedly, John died. Not only the shock to Mary was that John died, but he died without a will. He died “intestate”.

The fact that he died without a will, meant that his wishes for what happened to his assets was not written down in any form for anyone to follow. The fact that John has a married spouse, Mary, makes the decision of how his estate is distributed fairly straight forward.

John was a resident of Ontario and therefore, John’s estate is governed by the Ontario Succession Law Reform Act (SLRA). There were amendments to the Ontario estate laws in 2021. The Preferential share that goes to a spouse was increased from $200,000 to $350,000. Since he died after March 1, 2021, (this is when the change came into effect), Mary gets the first $350,000, which is the Preferential Share of the estate. She also gets between one third (if they have more than one child) and one half (if there is only one child) of the remaining assets and then the children equally split the balance.

There could be many other different scenarios. Here are some of the situations that could arise. It assumes John will have an estate value of $1 million after taxes and expenses.

If John and Mary had no children, Mary would be entitled to the entire $1 million estate.

If Mary had predeceased John, their two children would equally share the $1 million. They each get $500,000.

If John and Mary had three children, Mary gets the $350,000 preferential share, one-third of the $650,000 and the three children divide the remaining two-thirds equally.

If one of John and Mary’s children predeceased John, that child’s children (if any) would receive the interest that their parent would otherwise have received.

If John did not have a spouse or any children, his parents, if they are alive, inherit the estate equally.

If John has no spouse, no children and his parents are deceased, but has siblings, they would equally share the estate. If one of the siblings predeceased John, and if they have children, those children would be entitled to what the deceased sibling would have received.

If John and Mary are divorced, Mary does not get any part of John’s estate.

As a result of an amendment to the SLRA, if as of Jan. 1, 2022, John and Mary are separated (within the meaning of the SLRA), but not divorced, Mary does not inherit any part of John’s estate. Prior to Jan. 1, 2022, the separated spouse would have been entitled to a portion.

If John has a common law spouse, that person has no rights to automatically inherit anything.

If John had no spouse, no children, no parents, no siblings, no nieces or nephews, or next of kin, the estate becomes the property of the Crown.

The succession laws for each Canadian province or territory can differ from our example of the Ontario law here. It is important for you to check the laws of the province or territory you reside in. The even better thing to remember is that the moral of this saga is to have a will, even if it is handwritten.

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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