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Friday, February 12, 2010

What if husband and wife are both killed in accident?

Because married couples live together, travel together and generally spend time together, there is a risk that they could both be killed in an accident at the same time. People often wonder what happens in terms of their estates if there is an accident that kills both of them. We know that Wills are phrased so that someone is the beneficiary of the estate if that person survives the testator. But what if by the time rescue crews arrive, both people have passed away? How do we know who survived who?

The law has that question covered. In Alberta it's the Survivorship Act. The general rule is that if two people pass away in circumstances where it isn't clear who died first, the younger person is legally deemed to have outlived the older person.

Let's look at an example. Alice, 31, and Omar, 34, are married. They appoint each other as first choice of executors in their wills. Alice's second choice is her sister, Julie. Omar's second choice is his cousin, John. Alice and Omar are involved in a car accident and have both died by the time the paramedics arrive. Nobody knows who died first. Omar is older so he is deemed to have died first. Julie becomes the executor of Alice's estate. All of Alice and Omar's assets are now going through Alice's estate.

When I'm doing estate planning for married couples, I encourage the customers to make Wills that agree on the major points, such as the appointment of the guardian for minor children. If the Wills match on those major points, the estate is much less likely to get bogged down in a discussion of who survived the longest, as the effect of either husband or wife surviving would be the same.

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