Estate law continues to evolve and major legislative changes in Ontario have taken place that may affect your estate and wealth planning. The Ontario Government introduced Bill 245: The Accelerating Access to Justice Act on Feb. 16th, 2021 which received Royal Assent on April 19, 2021.
Separated spouses to be treated as divorced spouses
If at the testator’s death, the testator was separated from his or her spouse, the separated spouse will be treated the same as a divorced spouse. Therefore, gifts to a separated or divorced spouse in a will are construed as if the separated or divorced spouse has died before the deceased spouse and any appointment of a separated or divorced spouse as an executor under a will is revoked.
Separated spouses would also be excluded from inheriting on any intestacy. Further, separated spouses would also be precluded from making a claim under the Family Law Act (Ontario) for equalization of net family property against their deceased spouse’s estate; something a married spouse could do before, even if they were separated prior to death.
The definition of when a spouse is separated, includes:
(A) before the testator’s death:
-they lived separated and apart for three years as a result of a breakdown in marriage,
-they entered into a valid separation agreement under Part IV of the Family Law Act (Ontario),
-a 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
-a family arbitration award was made under the Arbitration Act, 1991 with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; and
(B) at the time of the testator’s death:
-they were living separate and apart as a result of the breakdown of their marriage
Extending these rules to apply to separated spouses and not only divorced spouses is significant as you do not need a formal divorce decree for them to apply.
Marriage no longer revokes a will
It has been long standing in Ontario that a will is revoked on marriage; however, this section of the Succession Law Reform Act (Ontario) will be repealed. Therefore, marriage will no longer have any legal effect on the will and spouses will need to consider updating their wills upon or in contemplation of marriage to avoid dying with an out-of-date will.
Why the change? When marriage revokes an existing will and the deceased has not signed a new will after the marriage or executed a will in contemplation of marriage the surviving spouse can benefit under the estate of the deceased spouse by way of estate distribution on an intestacy. This change will prevent a person who preys on a vulnerable person who is still able to marry from automatically being included in the estate by way of intestate distribution, commonly known as “predatory marriages”.
Another major change to estate law in Ontario, is the introduction of “substantial compliance”. Up until now, a will was only valid, if when executed, it strictly complied with the requirements of the legislation. Under these current legislative changes, if the court is satisfied a document that was not properly executed or made under the Succession Law Reform Act (Ontario) sets out the testamentary intentions of the deceased, or an intention to revoke, alter or revive a will of the deceased, the court may deem the will is valid. The legislation specifically does not expand to validate electronic wills. While this change makes it less onerous to have a valid will, the change will likely result in more litigation, as beneficiaries named in a will that does not conform to the strict requirements of Ontario law will undoubtedly seek to validate such documents and may still have a valid claim to an estate.
Remote witnessing made permanent
Due to the COVID-19 pandemic, which allowed for the remote execution of wills and powers of attorney, the temporary measures of allowing technology to execute these documents in the presence of a licensed lawyer or paralegal have now become permanent. There is a new definition for audio visual technology and “wet” signatures will still be needed by the person making the will and/or power of attorney and the witnesses. The execution of a will and powers of attorney in counterparts will now be permitted.
Increase in how much a minor can receive
Finally, a change under the Children’s Law Reform Act (Ontario) has already been made, by way of regulation, by increasing the threshold amount a minor can receive without first obtaining a court order appointing the parent(s) as legal guardian of the child’s property. This amount increases from $10,000 to $35,000. The change also allows parent(s) or a person with custody of a child to directly receive money payable to the child under a court judgement, order or an intestacy, so long as the amount is below the $35,000 threshold.
The amendments relating to the remote witnessing of wills and powers of attorney and counterpart execution are currently in effect. The remaining amendments will not come into force until a day set out by the Lieutenant Governor, which will not be earlier than Jan. 1, 2022.
Another notable change to mention in the area of estate law in Ontario is as of March 1, 2021 a surviving spouse in Ontario is now entitled to $350,000, up from $200,000 as their preferential share of their spouse’s estate if the spouse died without a will.