Estates & Wills & Trusts

No will means big headaches for beneficiaries

By AdvocateDaily.com Staff

Having a will in place can save the beneficiaries a great deal of time and reduce costs for the estate, Thunder Bay wills and estates lawyer Rene Larson tells AdvocateDaily.com.

The last will and testament lays out the wishes of the deceased, appoints an executor and names the beneficiaries. In the absence of that legal authority and someone to deal with the estate, survivors will have to obtain a court order appointing an estate trustee, says Larson, principal of Larson Lawyers Professional Corporation.

“Not having a will is being intestate, and that usually results in time delays and extra expenses” because a trustee has to be appointed, and there should be agreement among the family members, he explains. “So we avoid problems when people have a will.

“It’s even important when people have more debts than assets. Someone can be appointed estate trustee to deal with Canada Revenue Agency and the creditors to inform them they will not be paid because there’s no money.”

It provides the executor with the legal authority to get a bank balance, make the funeral arrangements, carry out the wishes of the deceased and close up their affairs.

Larson says there’s a list of problems that could occur when a will isn’t drafted properly.

Identity, he says, may seem straightforward, but that is often the source of frustration because people often don’t go by their birth names.

Lawyers are required to confirm the identity of their clients through photo identification and the birth certificate, Larson adds. So when it comes to dealing with the estate, any name changes — through marriage or other processes — or inconsistency in identification has already been addressed through the will-drafting process.

There is also an alternative system for probate that applies to an increasing population of First Nations members who live off the reserve. Through proper identification, the minister of Indigenous and Northern Affairs can grant probate within the Indian Act and govern their affairs if the deceased qualifies as being on reserve.

A mistake some people make is drafting the will for today, and not giving enough consideration to the future, Larson says. The will may specifically state that the assets are to be divided among three offspring, but by the time the will is executed and one has died and there are only two remaining, it might not be clear how to proceed.

“What happens to the third person’s share? Does it go to the other siblings, or is it intended that the parent wants the deceased child's share to go to the grandchildren?” asks Larson. “So having alternatives for everyone named in a will is very important.”

In the absence of alternatives, it might be necessary to seek assistance from the courts, which could cost the estate.

The difference between marital and common-law relationships becomes very apparent when one partner dies. When there is no will, the surviving spouse in a marital relationship becomes the natural heir, but the same rule doesn’t apply in a common-law union, Larson says.

“If someone is in a common-law relationship their spouse will get nothing under Ontario law from the property of the deceased,” he explains. “That common-law spouse may be entitled to support, but that would have to be gained through a court order and, oftentimes, if there are biological children, the kids end up owning their house rather than the mother or the father.

“Common law is the most dangerous situation from a marital point of view.”

If children under 18 are named as beneficiaries, an estate trustee must be involved, Larson says.

A plan must also be developed for any disabled beneficiary who is collecting disability benefits. Typically, their benefits are subject to other income, and generally, the approach is to create a Henson trust within the last will and testament, which requires the assistance of a lawyer, he says.

There is also a need to pay attention to the details. Too often Larson says he has seen those with good intentions come in to draft a will, but never follow up by signing the final document, which essentially means there is no will at all.

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