Last fall the Ontario government took steps to simplify the province’s estate laws. The changes took effect as of January 1, 2022, and are aimed to make the probate process more accessible.
The good news: the number of forms has been reduced from 58 to 23. The forms are easier to understand and complete alongside a new explanatory notice which explains to the beneficiary the reason they are receiving the application, their right to object and potential outcomes.
Although helpful, the complexities of administering an estate and the fiduciary responsibilities have not been simplified or reduced. Seeking the advice of a specialized lawyer is still the recommended first step for anyone taking on the role.
With the new estate form changes, comes amendments to the statutes governing them (Succession Law Reform Act). In some ways, these amendments reflect a modernization in attitude that is more consistent with current societal views.
Summary:
- A Will made before marriage is no longer revoked by the act of marriage.
- A spouse of a person who has died without a Will (on or after March 1, 2021) is now entitled to a larger “preferential” share of $350,000 (from $200,000).
- The pre-January 1, 2022 entitlement of a surviving spouse to this preferential share does not apply if at the time of death the deceased and surviving spouse satisfy the definition of “separated spouses”.
- If a married person dies with a Will that is dated before their divorce Judgment the gift in that Will is considered revoked as if the former spouse had predeceased. Now this rule will apply to married persons who were separated but not yet divorced at the time of death.
- To qualify as “separated” these specific requirements must be met:
- the couple must have lived separate and apart due to a marriage breakdown for three years or more immediately preceding the testator’s death; or
- the couple must have dealt with their rights on the breakdown of the marriage by way of a separation agreement, court order, or family arbitration award; and
- the couple were living separate and apart due to a marriage breakdown at the time of the testator’s death.
- A new simplified process for probating a “small” estate defined as one with less than $150,000 in assets has been introduced.
- The courts are now authorized to order that a document or writing is a valid Will even if the statutory formalities or witnessing have not been met if the court is satisfied the instrument sets out the testamentary intentions of the deceased (or the intention of the deceased to revoke, alter or revive an existing Will).
- But this authority of the court to validate testamentary documents is to not allow the court to declare a document or writing valid if that document or writing bears an electronic signature. Original signatures are still required.
Analysis:
While we cannot underestimate the importance of having a valid will or wills in place to ensure that your assets are distributed in a manner that is appropriate in your circumstances and in accordance with your wishes, the increase in the value of the preferential share is a welcome and probably overdue change that will be comforting to the surviving spouses of individuals who pass away without a valid will in place.
Although the intention behind these legislative and regulatory changes may be to assist with the administration of estates of individuals with fewer means, the new process may also prove convenient and of assistance to those administering the estate of more moderately wealthy individuals, who may, because of the nature of their estate planning, have very few assets that pass through their estate. It is noted that the rules providing for the Small Estate application are permissive rather than mandatory. An executor of an estate with a value under $150,000 can therefore still proceed with the traditional process if they so choose. This may be a wise choice if they are uncertain as to whether they have a full picture of the deceased’s assets.
While it will take some time to understand the extent of the impact of the new Small Estate process, it certainly brings hope that, as with the recent introduction of electronic filing of probate applications, this new process will help ease the strain on the estate’s courts and reduce the waiting time for the processing of all probate applications.
These amendments relating to married but separated spouses would be a welcome change to many as they are likely to be viewed as facilitating an estate distribution that more accurately reflects the intentions of most deceased individuals. However, they do introduce a challenge with respect to the factual determination of whether or not spouses are considered to be separated for the purposes of the legislation. While there will be situations that will be clear, there are also likely to be many situations that are not as clear. Unfortunately, this may increase the risk of conflict amongst potential beneficiaries and could result in costly litigation.
It would certainly make it even more important for individuals to update (or at least revoke) their existing wills if they are getting married and if their existing wills were not executed in contemplation of marriage and do not provide for their future spouse.
This is a marked departure from the existing power of the court, which does not permit the court any discretion in determining whether a “will” satisfies the strict legislative requirements to constitute a valid will. Several provinces have already enacted similar legislation and the Ontario court is likely to look to the decisions of the courts in those provinces when considering the application of this new power if passed.
As you can see, there are plenty of changes in the legislation relating to wills and estates. Should you have any questions or concerns regarding the impact of these changes or on your own estate planning or on an estate with which you are involved as executor, beneficiary or otherwise, please do not hesitate to reach out to us.
Bill 245 addresses this problem by extending the limitation to separated spouses that is currently only available to divorced spouses. As of January 1, 2022, there will be new subsections added to the SLRA that will restrict any claims by separated spouses.
Together, these reforms will hopefully assist Ontario residents in many aspects of their estate planning process and support families who are going through the difficulties of losing a loved one.
Jasmine Sweatman
Owner & Principal at Sweatman Law
