The Benefits of a Will
How your estate should be administered and distributed.
A will is a legal document that takes effect when you pass away, setting out how your estate should be administered and distributed. If you do not have a will, you are like most people in Toronto (63%) you do not have a signed will, and your estate will be distributed according to the rules of Intestacy.
Who inherits if you do not have a Will?
Part II of Ontario’s Succession Law Reform Act, RSO 1990 contains rules for how estates are to be distributed under intestacy.
The way your estate will be distributed depends on your family structure. If you have a spouse through marriage and no children, your spouse will receive everything. If you have a spouse and children, your spouse will receive the first $200,000 of the value of your estate and the balance will then be divided among your spouse and children.
If you do not have children or a surviving spouse, your entire estate will go to your parents, whom failing, your siblings.
Who administers your estate if there is no Will?
The Court will appoint an “Administrator” of your estate, or (as it is now called) an “Estate Trustee without a Will.” Normally, the Court appoints someone whom the survivors agree is best able to administer the estate. If the survivors cannot agree, then the Court will likely appoint your spouse, whom failing, your child, parent, or sibling.
In most cases, and before being appointed, the Administrator will be required to post with the Court a bond at twice the estimated value of your estate. Once appointed, he or she is entitled to compensation, at around 5% of the value of your estate. The administrator will then sell your assets and pay your debts, including taxes and funeral expenses. The administrator will then divide the remainder of your estate to your beneficiaries. He or she must account to the beneficiaries, for all receipts and disbursements.
Some of your survivors may have special needs, which are best addressed by a will. A child or dependant may require a special fund or trust. Someone who is ill or incapable may need a trustee to manage his or her funds.
Some of your assets are special, to be planned for by will: Is there someone who is to take over the family business, who needs special financing? Should your home be sold or should someone be permitted to live there for a period of time? Are there any other special assets, like a family cottage?
Who will look after your children?
In Ontario, the paramount concern is the best interests of the child, as determined by the Court. You can appoint someone to have custody of your child or be the guardian of your child’s property, but this will only be effective for 90 days following your death.
However, your expression of your child’s best interest, as documented in your Will, can have a very important effect on the Court. It tells the Judge what you think—often it prevents any dispute or misunderstanding within your family.
Consider including a clause in your will about who is to look after the children, especially if they are young.