Review your estate plan upon marriage, divorce or separation
By Kirsten McMahon, Associate Editor
If a person fails to update their will and powers of attorney in the event of a change in marital status, there could be unintended consequences, Barrie-area litigator Steve Rastin tells AdvocateDaily.com.
He points to a survey conducted earlier this year which showed that only 35 per cent of Canadians say they have a will that is up to date, which is surprising to Rastin, managing partner with Rastin & Associates.
“People should be updating their wills every four or five years, but the stats from this survey and others show that’s not the case. Even worse, almost half of Canadians don’t have a will at all,” he says.
He says even if someone isn’t giving their estate plan a tune-up every four to five years, at the very least they should be reviewing it with a lawyer upon marriage, divorce or separation.
“You're seeing people remarry later in life, even in nursing homes, and they don't realize if they had a will prior to marriage, it is automatically revoked,” Rastin says. “So then under the Succession Law Reform Act (SLRA), without a valid will, that person you married 18 months ago is entitled to a good portion of your estate — even if you have children.”
Under the SLRA, "your legal spouse is given the first $200,000, and the remaining balance is divided between your spouse and children,” he says.
If someone gets separated or divorced, only the portions of their will dealing with the ex-spouse would be revoked. However, he says people often fail to review and update their beneficiary designations and powers of attorney for personal care or property.
“One of the scenarios that frequently happens — and I hear this from my friends and colleagues — is somebody gets in an accident or has a serious progressive disease, and the hospital looks to the separated spouse for consent rather than person’s current common-law partner.”
“Do you want your ex-spouse to decide when to pull the plug?” he says.
Rastin says a reputable estates lawyer can draw reciprocal wills and powers of attorney for about $800 to $1,000 — an investment that could avoid pain and confusion for surviving family members.
“There are two huge advantages to having a lawyer update your will," he says. "One, you get to distribute your money the way you want. And two, a will that has been properly prepared to a reputable lawyer who takes steps to satisfy him or herself with respect to capacity, etc., is much more likely to survive a challenge."