What happens to one’s assets after death?

In Canada, we have the ability to determine who receives our property after death and we can express our “testamentary wishes” in a Will.  We are also able to designate beneficiaries for other assets as well including, for instance, insurance policies, pension benefits, death benefits and registered and non-registered accounts. If a person does not have a Will, then there are certain rules by which his or her property gets distributed (see below “Does the government inherit a person’s estate if a person dies without a Will?”).

Not exactly – there are certain limits to testamentary freedom in Ontario. If a deceased was legally married (not common-law), his surviving spouse can either accept the property left to him under the deceased spouse’s Will, or claim an equalization payment.

Secondly, in the event that the deceased did not provide adequate financial support to his or her dependant(s) (either through his Will or by way of other assets passing outside of his estate), the deceased’s dependant(s) can ask a court to intervene and make an order that adequate support be provided from the deceased’s estate, pursuant to the provisions of Part V of Ontario’s Succession Law Reform Act.

In Ontario, a deceased’s dependants may include a spouse (common law, legally married or divorced/declared a nullity), parent, child (including a grandchild or a person whom the deceased has demonstrated a “settled intention to treat as a child of his or her family”), brother or sister.

However, in addition to fitting into one of these categories, the deceased must have been either (1) actually providing financial support to the individual immediately prior to the deceased’s death; or (2) the deceased has to have been under a legal obligation to provide support to the individual immediately prior to the deceased’s death.

If a person dies without a Will, this is referred to as an “intestacy” or “dying intestate”. In Ontario, the intestate’s estate will be distributed in accordance with Part II of the Succession Law Reform Act (“SLRA”)

The SLRA sets out certain rules for the distribution of an intestate’s estate to the deceased’s legally married spouse and relatives, if any exist, in a particular order.

In the event that the deceased does not have any surviving next-of-kin, then the deceased’s estate “escheats” to the Crown.  In practical terms this means that the Ministry of the Attorney General’s Office of the Public Guardian and Trustee is entitled to possess the property on behalf of the Crown and in accordance with the provisions of the Escheats Act.

The options available to the surviving spouse or partner depend on whether he or she was legally married to the deceased, or whether they were common law spouse or partners.

A legally married spouse of a person who dies without a Will (called an “intestacy” or “dying intestate”) can choose whether to claim an equalization payment, or to inherit a share of the deceased’s estate in accordance with the intestacy rules.

A common law partner or spouse of the deceased does not automatically share in the deceased’s estate at all.  However, the surviving common law partner or spouse may be entitled to a portion of the deceased’s estate through a dependant’s support claim (see above).

In determining who inherits the assets in the joint account, what’s important is the intention of the parties at the time of the transfer to the joint account – particularly the intention of the person who transferred the assets. A court will look at whether there is evidence that the transferor wanted to gift the assets in the joint account to the surviving account holder.

If the parties’ intentions cannot be determined on the evidence, then there is a presumption that the adult child holds the funds “in trust” for the deceased parent’s estate (called “presumption of resulting trust”). The assets form part of the deceased parent’s estate, or “result back” to the deceased parent’s estate. However, the presumption of resulting trust may be rebutted by evidence that the deceased parent wanted to gift the funds to the adult child.