While the rest of the blog articles of this series focus on the procedural aspects of estate administration, this piece addresses a crucial yet often overlooked aspect: the fundamental principles of asset distribution in cases of intestacy (where there is no will or valid will). As an Estate Trustee, understanding these principles is essential for proper estate administration.
When someone dies without a will, their surviving spouse is entitled to a preferential share of up to $350,000 from the estate. If there are no children (known as “issue” in legal terms), the entire estate goes to the spouse.
The law makes no distinction between children born within or outside marriage. All children are entitled to equal shares of the estate. However, if a child born outside marriage cannot be located after reasonable inquiry, the Estate Trustee won’t be held liable for not distributing their share. Nevertheless, due diligence is crucial – Estate Trustees must conduct thorough searches, including checking records at the Registrar General’s office.
The All Families Are Equal Act of 2016 recognizes children conceived and born after a parent’s death. Under s.1.1 of the Succession Law Reform Act (SLRA), such children must meet specific criteria to be considered beneficiaries:
- The deceased’s spouse must provide written notice to the Estate Registrar for Ontario regarding the use of reproductive material
- The notice must use the Ministry of Attorney General’s prescribed form
- The child must be born within three years of the death
- A court declaration of parentage is required
Under s.32 of the SLRA, when someone inherits real estate through intestacy, they also inherit any associated mortgage. The estate’s other assets (personal property) cannot be used to discharge the mortgage. This principle ensures fair distribution of the estate’s overall assets.
When no specific payment timing is specified, interest on legacy payments begins to accrue one year after death. This “rule of convenience” provides a standard timeline for estate administration.
Ademption – the disappearance of a specific gift from the estate – applies similarly whether there is a will or not. A gift might remain valid if it has merely changed form rather than disappeared entirely. Under the Substitute Decisions Act, if an attorney sells a specifically bequeathed item under a power of attorney, the beneficiary can receive equivalent value from the estate’s remaining assets, though no interest is paid on this amount.
Final Important Note
This overview provides Estate Trustees with essential knowledge for administering intestate estates. However, given the complexity of estate law and the significant responsibilities involved, seeking professional legal advice is always recommended for specific situations.
