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May 2021

Updates in Estate Law Legislation

There have been numerous changes to Wills and Estates law that may warrant an update to your Wills and Estate plans.

When the First Spouse Dies Without a Will, the Surviving Spouse to Receive $350,000+

When a person dies without a Will, leaving behind a married spouse and a child or children, the surviving spouse is entitled to the first $350,000 of the deceased’s estate. For any amount above $350,000, the surviving spouse shares the balance with the deceased’s child or children. If the deceased’s estate is worth less than $350,000, then all of the funds flow solely to the surviving spouse, leaving nothing for the deceased’s children. This applies solely to legally married spouses where the first spouse died without a Will.

This may cause concern for spouses with children from a previous relationship, who prefer that their child(ren) receive the lion’s share of their estate, as opposed to their new spouse. Furthermore, this law only protects biological children and adopted children; stepchildren would receive nothing if the deceased died without a Will. Therefore, it is important to ensure that you have a Will, so your money can be distributed in accordance with your wishes.

Simplified Probate Process for Small Estates of $150,000.00 or Less

On April 1, 2021, a simplified probate process was introduced for “small estates,” which is defined as those with a value of $150,000.00 or less. When someone passes away, their executor might have to engage in a process that is colloquially called “probate”. The probate process is, essentially, a Court application to recognize the deceased’s Will as being, in fact, the Last (i.e. most recent) Will. Generally, banks will not release the deceased’s funds unless probate has been granted (especially when the Last Will is old, resulting in fear that the bank will be handing over funds to an executor named in an older Will).

Therefore, simplifying the probate process for small estates is a welcomed change. Previously, any estate, regardless of its size, was subject to the same time-consuming and costly process, resulting in some small estates never being claimed. Despite the simplified process, it is still recommended that legal advice is sought for smaller estates. This is because even small estates might have other complexities that require additional paperwork (for example, if there are beneficiaries who are mentally incapable or minors).

Virtual Witnessing of Wills & Powers of Attorney 

The law was recently amended to permanently allow for virtual witnessing of Wills and Powers of Attorney (“POAs”) via audio-visual communication technology. When a Will or POA is witnessed virtually, the law requires that one of the two witnesses be an Ontario-licensed lawyer or paralegal.

It should be noted that Wills and POAs still require a “wet signature” on a physical sheet of paper; electronically-signed Wills/POAs (for example, “DocuSign”) remain invalid. This is accomplished by having the Will maker and two witnesses sign separate sets of identically prepared documents while observing each other over a video conferencing platform. The multiple copies together constitute the Last Will. Consequently, it is more appropriately called a “virtual witnessing,” instead of a “virtual signing.”

This is a positive development, both from a social distancing perspective as well as for those with mobility issues. Therefore, our lawyers can certainly assist with updating Wills and/or Powers of Attorney, despite the social distancing guidelines.