Creating a will is an essential part of estate planning, and not taking this basic step can prove extremely costly for the estate -- not only in terms of unnecessary loss of assets, but also in terms of heart-rending family conflict. Additionally, when a person dies intestate -- that is, without a will -- provincial laws determine who will be estate executor and how estate assets and debts will be distributed, and this manner of distribution is often not in the best interests of the family.
In Ontario, for example, two legislative acts provide the scheme for the distribution of assets in the absence of a will. Specifically, the Estates Act clarifies that the deceased's spouse or next of kin will serve as estate executor -- called the "estate administrator" or "estate trustee without a will" - if the deceased died intestate -- and the Succession Law Reform Act (SLRA) provides a scheme for asset distribution.
With regard to the distribution of assets, the SLRA establishes the following priorities:
- The deceased's spouse is entitled to the whole of the estate if the deceased had no children.
- If there are children, then the spouse is currently entitled to $200,000 of the estate, and the remaining amount is split between the spouse and the children.
- The estate passes to the parents of the deceased (or their survivor) if the deceased did not have a spouse or children.
- The estate is distributed to the surviving siblings of the deceased if the deceased did not have a spouse, children or surviving parents.
- Nieces and nephews are entitled to the estate if the deceased died without a surviving spouse, child, parent or siblings.
- If none of the family members mentioned here is surviving when the deceased dies, then whoever is next of kin is entitled to the estate.
Again, this scheme applies in Ontario when a person dies without a will, but in creating a will, you can specify exactly how your estate should be distributed and who should receive the assets.
For more on resolving estate-related disputes in the absence of a will, please see Hagel Lawfirm's estate litigation overview.