Jonathan Chevreau, Financial Post · Jul. 12, 2011 | Last Updated: Jul. 12, 2011 4:02 PM ET
It’s not widely known that marriage results in the revocation of a will. As a result, unless a will is revised to reflect a new spouse, you can die “intestate” with your estate distributed according to set rules in each Canadian province. Maureen Daigle discovered this the hard way after her 64-year-old brother committed suicide two weeks after marrying a woman he’d known for 14 months. Because the province of Ontario considered him intestate, his new bride got the lion’s share of the estate, with little remaining for his grown daughter, his only child. Daigle, who retired recently after a 34-year career in forensics, created a blog at mosmuse.wordpress.com to spread the word and get the law changed. Now resident in Nova Scotia, she says her brother, who never suffered from mental illness, had written a will two years earlier at a time he was not contemplating remarriage. That will left his entire estate to his daughter from the first of two prior marriages.
“It came as a great surprise when we found out his will was null and void.” In the eyes of the law, “he had died without a will.”
As a result, an estate that took her brother (she prefers to withhold his name) a lifetime to amass went mostly to a wife of two weeks. That’s because in Ontario, the “preferential share” that goes to the spouse of someone who dies intestate is $200,000. After the preferential share goes to the spouse, in most provinces the remaining estate goes one-third to spouse and two-thirds to the kids. As Daigle researched the law across Canada she found marriage revokes an existing will in all provinces except Quebec. However, Alberta and British Columbia have recently repealed the law so as of next year, marriages in those two provinces will no longer revoke a will.
As things stand, the preferential share in B.C. is $65,000 and in Alberta $40,000, with the balance in both provinces split 50:50 between spouse and children. The preferential share is $50,000 in Manitoba and Nova Scotia, $75,000 in the Yukon and $100,000 in Saskatchewan. There is no preferential share in Quebec, New Brunswick, P.E.I., Newfoundland and Labrador. There, estates are split 50:50 between surviving spouse and the children. In Quebec the spouse gets one-third and the balance is split between the children.
Toronto-based wills specialist Les Kotzer says the average person who comes to Thornhill-based Fish & Associates doesn’t realize marriages nullify prior wills. “It’s not well-known,” says Kotzer, co-author of Where There’s an Inheritance. “When I tell them, people are blown away.”
Toronto-based estate planning consultant Sandy Cardy says the three big life events which need a revisiting of estate plans are marriage, divorce and separation. “Each has a different effect on a will, which people often don’t realize.”
Cardy says marriage revokes a will unless it was drawn up in contemplation of the person you’re planning to marry. This can be done in advance of the marriage. “The important point is that when you get separated, divorced or married, you need to revisit the whole package, including financial and medical powers of attorney, because your life has changed and you want to appoint different people going forward.”
With respect to Daigle’s case, “perhaps she can let the courts rule on whether there is a valid marriage here,” Cardy says. “If the testator was clinically depressed and suicidal, not of sound mind and was under significant duress from his wife to get married, perhaps the marriage isn’t valid under the eyes of the law. If that were the ruling from the courts, then the testator’s existing will could be declared valid.”
Doug Carroll, vice-president of tax and estate planning for Invesco Trimark Ltd., says all lawyers know wills are revoked upon marriage. Wills are also revoked upon divorce, although not necessarily on separation. He says the current law does make some sense: “I think revocation is the cleanest rule, although it’s not perfect.”
Another point to be aware of on marriage or divorce is the revoking of insurance beneficiary designations. There have been several cases involving separation agreements where one spouse agrees not to claim beneficiary designations against the ex-spouse’s estate but the agreement did not hold up in court. He cites one Ontario case from 2005 involving a separation agreement in which the wife released her claim to her husband’s estate and life insurance. However, he did not change the beneficiary designations with the insurer before he died a few months later. As a result, the wife’s release was determined to be non-compliant with insurance regulations, so the wife got the insurance proceeds.