Tel: 416 767-CASS (2277)
Fax: 416-491-0273

Garry Cass, ext.207
Assistant: Josie Dobosz, ext. 277

The Government will Sort Out My Estate

Some people seem to believe, “If I don’t have a Will when I die, my spouse will get it all; the government will take care of everything.” Not to put too fine a point on it, but when was the last time the government handled a problem the way you would like to see it done? So …, do you really trust the government to wind up your estate the way you would?

The government’s response to intestacy is cookie-cutter. For those parts of the estate where a beneficiary has been declared, assets like  insurance policies and RRSPs/RRIFs, the government will see the beneficiary inherits. For most other parts, they will follow a formula that divides your assets among legally defined family members, with rules that deal with minors.

You may have heard the joke where 2 spouses are talking and one says to the other, “what’s mine is mine and what’s yours is mine too.” You may even believe that when it comes to your estate, the government will follow that practice, so that even if no beneficiary has been named, they “know” to give it all to the spouse.

While some assets that the two of you own jointly will go to your partner should you die, there are circumstances where assets placed in your name alone, will not pass automatically to your spouse.

The Succession Law Reform Act

In the absence of a Will, assets are distributed according to a scheme for intestate distribution set out in a statute called the Succession Law Reform Act.

If a person dies intestate (without a Will) and has  children, then the surviving spouse gets the first $200,000 plus 1/3 of the balance. The remainder goes to the children.

If the children are under eighteen years old, the money will be held in trust for them, usually by a  government office called the Children’s lawyer and the money is not available to help raise them.  In addition each child gets his/her share as soon as he/she turns eighteen years old. This is what the government gives you.

Extra Costs

If you thought that having the government intercede, you would lower your costs, administering an intestate estate can be significantly more expensive because the Court may have additional requirement before they are willing to let a Trustee proceed, such as administration bonds from an insurance company.

Situations that Don’t Fit the Statutes

If you know anyone whose marriage has broken down, you probably know that an  equalization payment is made by the person who has more assets than the other so that a couple ends up more or less equal coming out of a marriage (this is a very simple explanation). When a spouse dies, the surviving spouse also has a chance to equalize.

If there is a Will and it has been properly prepared, this should not be an issue. If there is no Will and the surviving spouse has a lower net worth than the spouse who died, this can become an issue if the surviving spouse does not get along with the kids or it is a second (or more) marriage with no marriage contract. There is likely to be tension between all concerned.


Also, a Trustee in a Will can start working right away, while a Trustee in an intestacy can only really start to work after he has received his/her appointment from the Court. But, what if there are competing candidates for the job? Time and expense and idleness. Is that what you really want?

© Garry Cass - 2010 - 2015
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