What Happens If I Don’t Make a Will Or I Leave Behind An Outdated Will?
Planning for the future is one of the most important things that you can do for your family and loved ones. A major component of this is taking steps to prepare and execute a will that reflects your intentions when you pass. A will is a legal document which outlines your wishes about distribution of assets and, if applicable, the care of any minor children. Without a properly drafted will that reflects your wishes when you die, you may subject your loved ones to unnecessary conflict and financial difficulty. Below are some issues to consider if you fail to make a will or if you leave an outdated will.
Who May Administer the Estate?
If you die without creating a will (which expresses who you would like to act as your executor) or you do not update your will if an executor has predeceased you, the choice of estate administrator will be made by the court. Dying without a named executor can be risky as the court may select someone who would not have been your choice for the role.
Distributing Your Assets
The distribution of an estate can be complex if there is no will or if there is a partial intestacy. In Manitoba, if there is no will or a gift fails, the assets may be distributed in accordance with the Intestate Succession Act, CCSM c I85. The order of priority may vary depending on the family structure. Some common scenarios include:
• Leaving behind a surviving spouse or common-law partner and no issue, then the estate goes to the surviving spouse or common-law partner;
• Leaving behind a surviving spouse or common-law partner and issue, and all of the issue are also issue of the spouse or common-law partner, the estate goes to the surviving spouse or common-law partner;
• Leaving behind a spouse or common law partner and issue, and if one or more issue is not the issue of the surviving spouse or common-law partner, then the estate distribution is:
a) $50,000 or one-half of the estate (whichever is greater) to the surviving spouse or common-law partner; and
b) One-half of any remainder of the estate beyond the amount set out above to the surviving spouse or common-law partner
• Leaving behind no spouse or common-law partner, but surviving issue, then the estate is divided equally amongst the issue.
If there is no surviving spouse or common-law partner or children of the deceased, the order of priority is to surviving successors in the nearest degree of kinship to the estate and deceased persons in the same degree who left issue surviving the intestate, as follows;
• Parents of the deceased
• Grandparents of the deceased
• Nieces and Nephews of the deceased
• Uncles and Aunts of the deceased
• Great-Grandparents of the deceased
• Other remote relatives
The above are simplified scenarios; the legislation should be consulted for individual circumstances, including if there is a separation or divorce involved or a successor dies within 15 days of the person in question. If there are no surviving family members, the estate is eventually given to the Manitoba government after a fixed period.
Assets Could End Up Being Donated to the Government
As mentioned above, provisions are in place in the event that no one steps up to claim your assets. In Manitoba, unclaimed estates are governed by the Escheats Act and the Vacant Property Act. These acts deal with personal property, money, and securities in the province. If unclaimed after 12 years, the province may claim these assets. However, the Bank of Canada is considered the ultimate legal custodian of dormant bank accounts and financial instruments. This means that these items generally fall under federal rules. In these cases, accounts may lie dormant for 10 years before becoming payable to the Bank of Canada.
What If You Make a Will But Then Fail To Update It?
Sometimes, leaving a will that is not current can lead to disputes or to partial intestacy. Family dynamic changes, such as the passing of an executor or beneficiary or if you have a divorce, re-marry, or have new children can affect the way your will is applied.
In Penner v. Brandon et al., 2016 MBQB 64 (CanLII), for example, the wording of the will was somewhat imprecise and it was not updated to reflect the fact that the testator’s spouse had predeceased him. This meant that it was unclear whether the portion of the will which was intended for the spouse should go to the children or grandchildren of the testator. This technical issue was decided by courts, which applied the rules of the Intestate Succession Act.
Let Us Help You Prepare or Update Your Will
The issues mentioned here are only some of those which your loved ones may encounter if you do not create a will or if you leave an outdated will. Get started today in making your passing easier on your family by planning your estate distribution. We can meet with you to create a will that meets your needs or update your existing will with a codicil. We can also help to guide you through the decision-making process for choosing an estate trustee, distributing your assets, and making smart financial decisions. To arrange your consultation with a wills and estates lawyer in Winnipeg, call Cassidy Ramsay today at 204-943-7454.