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How changes to estate laws affect couples upon marriage, divorce

by Anita Phillips

In a significant change to Ontario’s estate laws, marriage will no longer automatically invalidate a will, and separated spouses will be treated the same as those who are divorced. With the Royal Assent of Bill 245 — Accelerating Access to Justice Act — changes to the legislation came into effect on Jan. 1, 2022, and now address estate law issues involving marriage and divorce.

Protection against predatory marriages

Before these legislative amendments, s. 16 of the Succession Law Reform Act (SLRA) provided for the revocation of a will upon marriage, except in certain circumstances. If you had a will in place before becoming married, it would become invalidated upon marriage. If you did not draft a new one, you were at risk of dying intestate — or without a will.

So, for example, if you died without a will and had a spouse and two children, your spouse would receive a lump sum payment called the “preferential share” from your estate. The preferential share was increased in the changes to the legislation from $200,000 to $350,000. The remainder of your estate would be split among your spouse and two children in equal shares, so they each received one-third of your estate. For many people, that distribution scheme is not ideal, and your surviving spouse might apply to the courts to ask for a larger share of your estate.

When the Bill was at the consulting stage, Attorney General Doug Downey framed the changes as a way to protect seniors and other vulnerable individuals against “predatory marriages.” For years, legal experts and seniors’ advocates argued Ontario’s outdated laws made widowed seniors a prime target for “predatory marriage.” 

While the circumstances of these marriages vary, they often follow a pattern involving a caregiver or acquaintance who isolates a vulnerable widow and then marries them — which invalidates any will they have. Once the elderly spouse dies, usually intestate, the new spouse is entitled to the preferential share of the estate — the first $350,000 — before anything is shared with the deceased’s children.

Although the move brings Ontario in line with many other jurisdictions, it is still a good idea to review your estate plan upon marriage. It’s also an apt time to revisit your powers of attorney for property and personal care and check your designated beneficiaries on pension funds, registered plans, tax-free savings accounts and life insurance policies. 

Again, if you got married before Jan. 1, 2022, and have not made a new will, it’s a good idea to reach out to an experienced legal professional to draft a new one.

Separation revokes gifts to spouse

Another huge change to Ontario’s estate laws deals with separating spouses, who had few protections under the previous legislation. Under the changes to the SLRA in Bill 245, a surviving spouse is considered to be separated if the couple:

  • was living apart at the time of their death due to a marriage breakdown that had occurred three years or more immediately preceding their death
  • had a valid separation agreement
  • had a court-ordered settlement order
  • had received a family arbitration award.

I have previously written about how married spouses are often surprised to learn that estate laws did not recognize the state of being separated. Before the changes to the SLRA, if you were legally married but separated, and died with a will, your will remained valid, and your spouse would be entitled to receive whatever benefits they were entitled to under your will. For most people, this would be their entire estate, as married people typically name their spouse as their sole beneficiary in the event of their death.

Dying while separated without a will is not much better than dying while separated with a will. Your surviving spouse, if separated from you for less than three years, would still be entitled to receive either all or a significant portion of your estate.

It may seem unlikely that either you or your former spouse will die during separation, but it happens — especially when a divorce drags out for months or even years. 

Under the previous legislation, spouses could be separated for a decade or longer, and still be entitled to receive all or a significant share of their former spouse’s estate upon their death. While this unexpected inheritance from the estate of their former spouse was a welcome surprise to the surviving former spouse, the deceased spouse’s family would often try to recover that inheritance, leading to a costly court battle. 

The changes to the legislation are meant to avoid these types of scenarios, but it is important to remember that a separated spouse is still entitled to benefit from their deceased spouse’s estate if their spouse dies within three years of their date of separation, or matters have been settled in a valid agreement, court order or arbitration award.

Ensuring your wishes for your estate are set down in a valid will is also very important for people who wish to benefit their separated spouse. Some of our clients remain friendly with their former spouses and want to name them as a beneficiary in their will. In these cases, it is important to include wording in your will affirming that you want your former spouse to receive this gift, notwithstanding your separation.

The takeaway for couples living in a common-law relationship, getting married or separating from a partner is that a review of your will at these critical junctures is necessary to ensure that it accurately reflects your wishes. That way, when the time comes to distribute your estate, the process is as smooth as possible.

If you have questions about your estate plan and would like to discuss your options, we would be happy to help you.

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by Anita Phillips

Anita Phillips has extensive experience as a family and estate law lawyer. She has particular expertise in negotiating and drafting domestic contracts and in developing estate plans for clients with blended families and for business owners.