Dying without a will, also known as intestacy or dying intestate, can have significant implications, particularly when there are minor children involved. In Ontario, the provincial Succession Law Reform Act governs how an estate is distributed when a person dies without a valid will. Therefore, understanding the potential consequences of dying intestate is crucial for parents and caregivers to ensure the protection of their children’s best interests.

This blog post will dive into the consequences of dying intestate in Ontario, with a focus on what happens when minor children are involved.

Dying Without a Will in Ontario

If you die without a will in Ontario, you are considered to have died “intestate.” This situation takes away your decision-making power and leaves it in the hands of the state. In the case of dying intestate, Ontario’s Succession Law Reform Act steps in to dictate how the estate will be distributed.

The Role of the Succession Law Reform Act

The law prioritizes the protection of minor children, but the specific distribution depends on the circumstances of the deceased. Depending on who survives the deceased, the law aims to provide an equitable distribution of the estates among the closest relatives of the deceased:

• Surviving spouse but no children: The entire estate passes to the spouse.
• Surviving Spouse and Children: If the deceased leaves behind a spouse and children, the spouse receives a preferential share of the estate (the first $350,000), with the remainder of the estate to be divided equally between the spouse and children.
• Surviving children but no spouse: If there is no surviving spouse, the estate is divided equally among the deceased’s living children.
• No children, spouse, or parents: In the absence of a surviving spouse, child, or parent, the estate passes to the deceased’s siblings equally.
• No surviving spouse, children, parents, or siblings: Nieces and nephews will divide the estate equally.
• No next of kin: If the deceased does not have a surviving next of kin, the estate “escheats” to the province (i.e. the estate assets become the provincial government’s property).

Common Law Spouses

It is important to note that the above provisions do not apply to common law spouses. A common law spouse is not entitled to a share of the estate if there is no will providing for such. Instead, the deceased’s children will be recognized as the sole beneficiaries of the estate. A common law spouse may, however, still receive assets for which they are the designated beneficiary or that they are entitled to through right of survivorship.

The Impact of Intestacy on Minors

One of the most critical concerns when a parent dies intestate is the guardianship and custody of minor children. In these cases, the court will appoint a guardian to care for the minor child(ren). Several factors will be considered by the court before appointing a guardian, including but not limited to:

• The relationship between the potential guardians and the children;
• The ability of the potential guardians to provide a suitable home environment;
• The financial resources of the potential guardians; and
• The wishes of the deceased, if expressed in writing.

What Happens to a Minor’s Inheritance?

Funds and property cannot be paid or transferred to a minor until they reach the age of majority in Ontario. This restriction applies to estates, including gifts and proceeds payable from a life insurance policy or other registered plan, regardless of whether a will was in place or not.

If a deceased is contemplating a minor’s inheritance, their will should contain a provision that provides the minor’s share to be held in trust by a named trustee. This provision should also set out specific terms of the trust regarding what payments may be made for the benefit of the minor. In some cases, the trust may continue even after the minor beneficiary attains the age of majority to ensure that the individual is financially mature enough to manage any inheritance funds.

However, in cases where an individual dies intestate and a trust for a minor beneficiary has not been set up, limited options are available.

Inheritance Under $35,000

If you die without a will and your minor children are entitled to a share of your estate totaling less than $35,000, the funds can be paid to the minor’s parent or guardian. If this occurs, the estate trustee is no longer liable for what happens to the funds.

Inheritance Over $35,000

However, if the amount is greater than $35,000, the minor’s inheritance may be paid into the court and held by the Accountant of the Superior Court of Justice until the child reaches the age of majority. If the minor requires funds before they reach the age of 18, they may make a request to the Accountant for consideration, with approval from the Office of the Children’s Lawyer.

Alternatively, an individual may apply to the court to be appointed as the minor’s guardian of property and can receive the minor’s inheritance on their behalf. Guardianship applications require a court application and management plan. It is also important to note that a minor’s parent is not automatically assumed to be the guardian of their property. Once the guardian is appointed, the guardian must follow the approved management plan and may only spend the minor’s money as directed by the court or approved plan.

In cases of intestacy, regardless of which option is pursued, once the minor reaches 18 years of age, their inheritance or reminder of it will be paid in full to them without further protective trust provisions.

Key Takeaways About Intestacy in Ontario

Dying intestate can create issues whether or not minor beneficiaries are involved. As such, proper estate planning is crucial to ensure that the financial safety of your loved ones is properly structured. By working with an experienced estate planning lawyer, you can ensure that your will and accompanying estate planning documents contemplate various scenarios and contain protective provisions to avoid financial disputes, particularly where minor children are involved.

Contact the Wills and Estates Lawyers at Bader Law for Guidance with Estate Planning

At Bader Law, our knowledgeable team of wills and estates lawyers help clients at every stage of the estate planning and administration process. Whether you are looking to draft your first will, amend an existing estate plan, or are the executor of an estate dealing with probate matters, our team is ready to help. With offices located in Mississauga and Oakville, our firm proudly represents clients across Ontario. To speak with one of our team members about your estate planning needs, contact us online or call us at (289) 652-9092.