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Monday, March 22, 2010

Does the government get my assets if I die without a Will?

This is another question that I am asked a lot, and which I'm glad to get the chance to discuss. As is often the case, the answer is "maybe".

If you die in Alberta without a Will, statutes called "The Intestate Succession Act" and "The Ultimate Heir Act" set out who will receive your assets (dying without a Will is known as "dying intestate"). Here are the basics:

If you are married or living in a common law relationship, your spouse gets the first $40,000 of the net assets. Notice that we are talking about net assets, meaning that taxes and expenses are paid first before the spouse.

If you are married/common law and have one child, everything above the first $40,000 is divided equally between the spouse and the child. The word "child" includes biological children (even if illegitimate) both minors and adults, and adopted children, but does not include step-children. If there is more than one child, the spouse gets the first $40,000 and one-third of the rest, and the remaining two-thirds is divided equally among the children.

If you don't have a spouse, your estate is divided among your biological and adopted children.

If you don't have a spouse or children, your estate will be divided equally between your father and mother, or to the survivor of them.

If you don't have a spouse, children or parents alive, your estate will be divided equally among your brothers and sisters. If any brother or sister died before you, the share that sibling would have received if alive will be divided among that sibling's children.

If you don't have any of the above people, your estate will be divided equally among your nieces and nephews.

If there is a need to go further to find beneficiaries, the Intestate Succession Act provides for that, stating that your next of kin will inherit.

If the person who is administering your estate can't find ANY next of kin whatsoever within two years of your death, the Ultimate Heir Act says that your assets will be paid to the government.

As you can see, it's possible that your estate could go to the government if you die without a Will, but only if nobody related to you by blood can be found. Even if you have no family, if you would prefer that your estate go to a charity or church rather than the government, you should make a Will to make sure your wishes are carried out.


  1. In Ontario can a child receive his/her inheritance will the parent is still living? If monies were left to each child by the deceased father, and the mother has all the assets? Can my husband receive what his father left to him now? Will he pay taxes on this money?

  2. To know the answer in your particular case, I'd have to read your father-in-law's Will to look at specific language, and ask a few questions about the estate and the mother. But I can at least give you the general rules.

    I'm not sure whether "the mother has all the assets" means that she is holding onto them as executor, or whether she is claiming them all for herself. So we'll look at both.

    If the father left money directly to his son, it should go to the son even if the mother is alive.

    If the mother is the executor of the Will, it could be that she is willing to give the money to the son but is simply taking a long time with the estate. This happens a lot, in part because most people don't really know how to be an executor and have to move slowly and carefully. It could be that she is waiting for the CRA tax clearance certificate, which takes months to get. It could be that she is waiting for investments to mature so that the estate gets the maximum amount of interest. There could be a claim against the estate that needs to be dealt with before money can be paid out.

    If, on the other hand, she has the assets and is saying they belong to her personally, the language in the Will becomes vitally important. Is there anything in the Will that says, or suggests, that the money goes to the mother first? For example, in the majority of Wills signed by married people, they leave everything to their spouse, but go on to say that if the spouse dies before them, the money goes to the children instead.

    If the Will says it goes to her first, there is nothing you or your husband can do about it.

    If the Will says that the money goes right to the son, the son has a right to receive that money within a reasonable time. What is reasonable is open to interpretation of course, as every estate is different. Your husband is within his rights to ask for the money to be paid, or at the very least get an explanation as to the delay and a commitment as to when it will be paid.

    If the mother is ignoring provisions in the Will and is just keeping the money herself for no legal reason, your husband can hire a lawyer. Hopefully it won't come to that.

    As for paying taxes, if your husband inherits a sum of money, there is no tax on that. However, he can still be affected by tax. Some assets owned by his father will be taxable, such as RRSPs and real estate other than the father's principal residence. The tax is payable by the estate, but if your husband is a residuary beneficiary, it still means that he receives a smaller gift because of the tax owing.

    Without more detail, I can't be more specific, but I hope this answers at least part of your question.


  3. Thank you. We are looking into this. My husband's brother is one of the exectors of the Mother's will, and I do believe it will involve my husband just asking his mother for money from the estate.

  4. I haven't filed for probate on my father's will yet, but I have a joint account with a substantial amount of money in it. There are 5 beneficiaries to whom is bequeathed a few thousand dollars in total. I could easily pay these beneficiaries out of the joint account now.
    Do I have to wait til the will is probated?

  5. I'm making a few assumptions in answering this question. First, I'm assuming that the joint account is owned by you and your father, and nobody else. I'm also assuming that the Will you've referred to is a valid Will that isn't being disputed by anyone.

    Obviously if a Will is in dispute you don't want to pay anything out until the dispute is resolved, because you might be paying the wrong people. And trust me, it's hard to get money back if you've paid it out!

    I'm also assuming that you are the only executor, or that any co-executors acting with you are in agreement with your idea to pay the bequests this way.

    If the facts are actually as I understand them, then my opinion is that you do not need to wait until a Grant of Probate has been issued. Your authority as executor arises from the Will itself.

    A couple of things to keep in mind. First, make sure that ALL debts and expenses are paid, or that there is enough money in the estate to pay them, before you give any money to beneficiaries. Keep taxes in mind, as we don't usually know the tax bill amount right away. Should you distribute the estate before taxes and liabilities are paid, you could be held personally liable to pay them out of your own money.

    Also, get written Releases from all of the beneficiaries. This will protect you from any beneficiary claiming later that you didn't pay them, or didn't pay the right amount, or some other issue. Make sure you get Releases from all of them before you pay anyone.

  6. are the Canadian legal will kits valid ?

  7. Yes, will kits are valid. If you are going to use one because you believe that your financial and family affairs are simple enough to allow that, then I recommend that you do some research about things like taxation.

    I'd also like to point out something that I've noticed about Wills made with Will kits. People make one serious error in the signing of Wills, and it has to do with witnessing. If the Will is not 100% in your own handwriting, you should sign your Will in front of 2 witnesses, who will then sign in front of you and in front of each other. Do not treat a Will kit - or a form you download or anything where you fill in blanks - as a fully handwritten Will. Make sure you get those witnesses or your Will could be held to be invalid.


  8. My husband and I have been married for 9 years. When we met my husband was living in his parents house. His mother passed I had never meet her.
    But his father was alive to see us get married. Passed a few months after we married. We don't have a will. But I found one his mother left. It says the house will go to his dad. And my father in law passed Then my husband and if my husband passes. It goes to his son. My stepson. In 9 years I have seen him a handful of times. He never comes around. Because my husband has no will. Does this mean our home is passed to my husbands son. I also have been paying off the house. And have 4 daughters from my first marrage. My husband says we don't need a will. Our home will go to me/his wife.
    I feel like his mothers will is finally say if we don't do our own will. So if my husband were to pass. I would loose our home. Thank you


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