When someone dies without a will, we say that he or she died "intestate." It is also possible for someone to die with a will that does not dispose of all of his or her estate. If you say that half of your estate goes to your spouse, but don't say what happens to the other half, we call this a "partial intestacy."
I have heard advertisements on the radio for will kits in which the announcer says that if you do not have a will when you die, the government decides who gets your estate. I find this a little misleading. The advertisements sound as if a civil servant will arbitrarily decide what to do with your assets. That is not how it works. Rather there are rules set out in legislation for determining who gets what when there is no will.
Each province in Canada has its own laws for determining who gets what when someone does not have a will, and these laws vary significantly from province to province. In some cases the laws of more than one province may apply to the deceased’s estate; for example, the laws of both Alberta and British Columbia may apply where a resident of British Columbia who owns land in Alberta dies without leaving a will.
The rules in British Columbia are set out in the Part 10 of the Estate Administration Act, RSBC 1996, c. 122.
Under the Estate Administration Act, when a person dies without a will leaving a spouse, but no children or grandchildren or other issue (great grandchildren etc.), that person’s entire estate goes to the spouse. The word "spouse" is defined in section 1 to include a legally married spouse and a common law spouse, defined as a person who "lived and cohabited with the deceased in a marriage-like relationship, including a marriage-like relationship between persons of the same gender, for a period of at least 2 years ending not earlier than one year before the death."
If a legally married spouse was separated from the deceased for at least a year immediately prior to the deceased’s death, and they intended to live separate and apart, the spouse will not receive anything unless the spouse applies to court, in which case the court can decide on the spouse’s share.
Where a person dies without a will leaving a spouse and any issue (such as children, grandchildren and great grandchildren), the spouse receives the first $65,000 and a portion of the rest of the estate. The spouse’s portion of the rest of the estate is one-half, if the deceased left only one child, or one-third if the deceased left more than one child. But, for the purpose of determining the spouse's share, a child who has died before his or her deceased parent is counted if that child left issue who are living at the intestate parent's death. The spouse also has the right to live in the matrimonial home and use the household furnishings for the rest of the spouse’s life.
The children of a person who dies without a will share equally that part of the estate that does not go to the spouse. If there is no spouse, the children share the whole of the estate. There are exceptions where a child has died before the person who dies without a will. That deceased child’s own children share the portion of the estate that the deceased child would have inherited if he or she were still alive. (Similarly, great grandchildren and other issue stand in the place of their deceased parents.) In other words, the portion of the deceased's estate that does not go to the spouse goes to the deceased's issue per stirpes.
Where there is no spouse, children, grandchildren, or other issue, the deceased’s estate goes to his or her parents, unless both have died. If there are no parents, the estate goes to brothers and sisters (with the children of any deceased brother or sister receiving that deceased brother’s or sister’s share). There are further rules providing that the estate of a person who dies without a will goes to the next of kin where he or she does not leave a spouse, children, other lineal descendants, parents, or any brothers and sisters.
If you die without a will, someone will probably have to apply to court to be appointed to administer your affairs. Usually, the court will give preference to a spouse or next of kin.
A will is not the only way to dispose of your assets on death. If you have designated beneficiaries of your life insurance policies, Registered Retirement Savings Plans or Registered Retirement Income Funds, the proceeds may flow to the designated beneficiaries even if you do not have a will. Similarly, assets held in a joint tenancy may pass to the survivor on your death outside of your estate. You can also hold assets in a trust that provides who receives the assets on your death.
But, it still makes good sense to have a will in place when you die so that you can tailor your complete estate plan to suit your family's needs.
POWERS OF ATTORNEY AND ALTER EGO TRUSTS
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