New Changes to Canadian Succession Law
This past year, Ontario, Canada drastically changed its succession laws in relation to how separations and marriages affect the validity of wills and the rights of surviving spouses. Now, under the laws of Ontario, separated spouses will not inherit under their former partner’s will or from a former partner’s intestate estate provided the couple was separated on or after January 1, 2022. Furthermore, marriages on or after January 1, 2022 will no longer cause deemed revocations of the couples’ wills. The changes aim at solving what have often been perceived as substantial injustices, but in doing so new problems can and will arise.
The changes also illustrate the importance of ensuring your testamentary documents are updated for each jurisdiction in which you hold assets when your relationships or financial circumstances materially change. The effect of a marriage, separation and divorce on a spouse’s property rights and interests in one jurisdiction may be dramatically different than the impact of a marriage, separation and divorce in another. Furthermore, as exemplified by the recent changes in Ontario, even longstanding laws are subject to change.
The best way to protect your interests and ensure your estate is administered in a manner consistent with your intentions and wishes, is to periodically evaluate your estate plan with advice from qualified professionals. It is important, especially for foreign nationals or those who have personal property interests in multiple jurisdictions, to seek guidance and counsel from experienced estate planning experts well versed in the laws where the assets are situated each and every time your personal, financial, or familial circumstances materially change.
Marriages in Ontario, Canada On or After January 1, 2022 Do Not Revoke Willls
Previously in Ontario, upon a marriage any will was deemed revoked, unless the will was made in contemplation of that marriage. The general purpose behind this inheritance law, was to ensure that the new spouse was protected in the event their partner passed away and a prior will left them little to no interest in their estate. In order to avoid the application of this law, it was typically necessary to include a provision indicating that the will was made in contemplation of the marriage to the specific spouse.
Although well intentioned, the issue with this law was that it could cause an unintended intestacy, especially where the spouses in question were in a conjugal relationship before marriage, prepared wills during that conjugal relationship, and later married thinking that their prior wills remained effective. The resulting intestacy can be substantially disruptive to the surviving spouse and the decedent’s heirs, especially where the decedent is survived by a minor child, can cause the estate to be divided in a manner conflicting with the decedent’s wishes, and can have dramatic adverse tax consequences.
This year, the Ontario Succession Law Reform Act (the “Act”) was amended which removed this deemed revocation rule for any marriage after January 1, 2022. The change is not retroactive however, so any wills revoked by marriage prior to 2022 are not cured by the changes made by the Ontario government.
A Separated Spouse No Longer Inherits Under A Will Or In An Intestate Estate
Another issue that occasionally arose in Ontario was that separated yet still married spouses could inherit under a decedent’s will or from the decedent’s intestate estate. This at times led to very problematic circumstances, especially where spouses neglected to finalize their separation by a divorce. For instance, there were cases where a married spouse, despite living separate and apart from their former partner for over fifteen years, inherited the majority of their former partner’s estate upon that partner’s death to the dismay of the decedent’s children.
The Ontario government attempted to address this issue as well by amending the Succession Act to provide that except when a contrary intention appears by will, where the spouses are separated at the time of the decedent’s death, any bequest of a beneficial interest in property to the separated spouse or the appointment of the separated spouse as an executor or trustee is revoked and construed as if the separated spouse had predeceased the decedent. Similarly, in the event of an intestate estate, the separated spouse does not inherit from the estate provided the spouse was separated at the time of the decedent’s death.
When a Spouse is Considered Separated from the Deceased Person at the Time of Death Under the New Legislation
a) Before the person’s death,
i. They lived separate and apart as a result of the breakdown of their marriage for a period of three years, if the period immediately preceded the death;
ii. They entered into a valid separation agreement;
iii. The court made an order with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; or
iv. a family arbitration award was made settling their affairs arising from the breakdown of their marriage; and
b) at the time of the person’s death, they were living separate and apart as a result of the breakdown of their marriage.
This change is also not retroactive, so where a person dies with a separated, yet still married spouse, if the spouse was separated within the meaning of the Act before 2022, then that separated spouse could still inherit under the will or under the laws of intestacy.
Concluding Thoughts on the New Candadian Succession Laws
These significant developments are a reminder to all of us that laws are subject to change. The amendments to the legislation avoid the often substantially unfair circumstances that Canadian lawyers have observed in cases over the last several decades. However, there are bound to be a myriad of new issues that will arise as a result of this legislation. A clear example is that there will be cases where the date the decedent began living separate and apart from his spouse is unclear, and therefore litigation about whether these legislative changes apply will ensue.
These issues are important but can be complex. It can impact the distribution of the entirety of someone’s net worth. There is no one size fits all solution to these issues, and jurisdictions approach these problems differently. The legislation in California for instance takes a very different approach to these issues, in part because unlike Ontario, California is a Community Property jurisdiction.
The safest course of action is to regularly evaluate and if appropriate amend your estate plan, and not rely on the particular legislation in place in the jurisdiction where you reside or where your assets are situated. It is therefore important to consult with your estate planning attorney any time your financial circumstances or personal relationships materially change, especially if you have assets subject to the laws of other jurisdictions.
 Succession Law Reform Act, RSO 1990, c. S. 26, s. 17(5).: https://www.ontario.ca/laws/statute/90s26#BK19