Effective from January 1, 2022, substantial modifications in estate planning laws have been implemented. Notably, these alterations impact individuals who are planning to marry, currently in a common-law relationship, or separated from their spouses in 2022, in the province of Ontario.
Previously, the Ontario legislation about wills and estate distribution in the absence of a will consisted of four key elements:
- An existing will was invalidated by marriage, leaving the individual without a legitimate will.
- A separated, but not divorced, spouse retained the right to a share in an estate if named in a will or in the case of intestacy.
- Divorce did not invalidate a will, but it implied that a divorced spouse listed as an estate trustee or beneficiary was considered deceased prior to the testator.
- Common-law spouses had no automatic entitlements to each other’s estates.
Commencing January 1, 2022, two significant shifts occur in these circumstances:
- Marriage taking place on or after January 1, 2022, does not nullify an existing will.
- Spouses separated for at least three years prior to a death after December 31, 2021, or those with a separation agreement, are now treated like divorced spouses. This implies that a separated spouse named as an estate trustee or beneficiary in a will forfeits their entitlement to benefits under the will. In the absence of a will, they have no rights to the estate.
An encouraging development from these changes is that couples living together who decide to marry or those who have comprehensive estate planning arrangements need not amend their wills immediately upon marriage. Wills drafted just before marriage need not state that they were made “in contemplation of marriage.”
It is important to note that these legal changes are not retroactive. Individuals who married before January 1, 2022, remain subject to the preceding laws and thus do not possess a will unless a new one was made post-marriage or pre-marriage specifically contemplating marriage.
For those marrying in 2022 with an existing will, the will persists. If there are no stipulations for the new spouse, they will remain without provisions.
For separated spouses, the change could lessen the urgency to draft a new will post-separation. If there is a valid reason for the separated spouse to remain the estate trustee or receive benefits, the will must explicitly state it. These modifications do not impact beneficiary designations on life insurance or registered plans like RRSP and RRIF accounts. Changes must still be made in these designations if the separated spouse is to be excluded.
Separated but not divorced individuals entering a common-law relationship must still review their estate planning documents. While the separated spouse won’t share in the estate, the common-law partner doesn’t acquire new rights. None of these modifications validate the often misconceived notion that living together for three years equates to marriage.
In conclusion, individuals getting married, separating, or in long-term common-law relationships must continue to seek competent estate planning advice to ensure suitable provisions are made for each other and other family members.
Note:
The information provided herein is for educational purposes only and does not constitute legal advice. While efforts have been made to ensure accuracy, completeness, and timeliness of the content, it should not be relied upon as a substitute for professional legal advice. Readers are encouraged to consult with a qualified attorney regarding their specific legal issues and questions.
