Updates in Estate Law Legislation - Part II
We march closer to the end of 2021, another long and strange year. Big changes have taken place in modernizing Estates law, and some of these changes will be taking effect in the new year. The Accelerating Access to Justice Act 2021 (“AAJA”) is a major piece of legislation that has made changes to many different areas of law; including a number of significant changes to Wills and Estates law. My colleague, Brittany Zigmond, wrote about some of these in an earlier post: [https://www.sorbaralaw.com/resources/knowledge-centre/publication/updates-in-estate-law-legislation].
The following will provide some information about further changes to Estates law brought by the AAJA which also relate to family law.
Change in Treatment of Separated Spouses
Among these major changes is a change to the rights of spouses in Estates. Currently, separated spouses are generally treated the same as married spouses in Estates law. In the absence of a separation agreement, if you are separated from your spouse but are still legally married at the time of your spouse’s death, you could still have a right to their Estate if you are named in the deceased spouse’s Will, or pursuant to the applicable laws where there is no Will (also known as “intestacy”), or pursuant to applicable family law. The AAJA has changed this: rather than treating them like married spouses, separated spouses will instead be considered more like divorced spouses. Effective January 1, 2022, in testate Estates (meaning where the Deceased left a valid Will), the Will will be interpreted as if the separated spouse has predeceased the deceased spouse, unless the Will specifically addresses the separated status of the spouse and still gifts something to them despite the separation. Similarly, in an intestacy, a separated spouse will no longer inherit in accordance with the succession laws outlined in the Succession Law Reform Act. It is always prudent to check in with a Wills and Estates lawyer if you are going through a major life transition, such as a separation, to ensure that you understand and protect your rights.
Marriage Will No Longer Revoke a Will
Another significant change that will take effect in the new year is that marriage will no longer revoke a Will. Presently, a Will is revoked automatically by marriage, unless the Will specifically addresses upcoming nuptials. Effective January 1, 2022, the law will change such that marriage will no longer automatically revoke a Will. This change will not mean that spouses are in the clear. A Will should always be updated to reflect someone’s marital status, especially if there is a new change in status. Upon the death of a spouse, the surviving spouse could still bring a claim against the Estate under the Family Law Act, especially if the Will does not include the new spouse or does not provide sufficient funds to the spouse. A spouse cannot “disinherit” or exclude their spouse from their Will without the potential for such a claim against the Estate (unless there was a domestic/marriage contract). Furthermore, the surviving spouse could bring a dependent support claim, if the deceased spouse was financially supporting the surviving spouse immediately before death. Therefore, if a spouse decides to exclude their spouse from their Will and Estate plan, there are several avenues for the surviving spouse to commence a claim against the Estate for more than they have been given in the Will.
Payment to Parents in Trust for Minors Increased to $35,000
The AAJA has also brought a change to the amount of money that may be paid to the parent of a minor child. Parents and guardians are often surprised to learn that they are not automatically the guardian of their minor child’s property. A parent does not automatically have the legal authority to deal with their child’s property unless they are appointed by the Court to do so. There are, of course, exceptions to this rule. The Children’s Law Reform Act currently allows for a maximum of $10,000 to be paid to a parent or person with lawful custody on the child’s behalf. If the amount paid to the minor exceeds $10,000, the parent must either be appointed by the Court to be the guardian of the minor’s property, or the funds must be paid to the Accountant of the Superior Court of Justice, who holds the funds in trust until the minor reaches the age of majority (18 years old). Effective April 19, 2021, the maximum amount that a parent or legal guardian may hold on behalf of a minor is now $35,000. In the context of an Estate, an Estate Trustee may now pay up to $35,000 to a parent on behalf of a minor beneficiary without requiring the Court’s participation in one of the two ways mentioned above.
There is a great deal of overlap between family law and estates law. With every new life change, including marriage, separation, divorce or children, it is advisable to seek legal advice to ensure that your Estate plans are as up to date as possible and to ensure that you and your loved ones are taken care of after your death.