Changing your relationship status?

For the first time in a long time, some of the rules of succession have changed.

Effective January 1, 2022, amendments to the Succession Law Reform Act (the “Act”) came into force.  The key changes alter who can inherit from our estates when our relationship status changes.  While some of the amendments are long overdue, the true impacts of the new rules will not be apparent until the courts have had the opportunity to interpret them.

1.     Marriage no longer revokes a will

You may have heard this long-standing rule: “marriage revokes a will”.  The basis for this rule was to protect married spouses’ rights to each other’s estates. 

Let’s say, for example, that Jane prepared a will in 2008 leaving her entire estate to her sister Sarah.  Then in 2010, Jane married Chris.  They enjoyed a happy marriage but Jane never got around to updating her will before she died in 2019.  Under the old “marriage revokes a will” rule, marrying Chris nullified Jane’s old Will so that Chris’ matrimonial rights to Jane’s estate were preserved.  Sarah would not have inherited anything.

However, in the face of the increasing prevalence of predatory marriages, this long-standing rule was repealed.  The concern centered around younger people marrying older vulnerable persons for – quite bluntly – their money.  Now, if a person makes a Will and later marries, the act of marriage will not revoke the will.

2.     Separated spouses with a will

Previously, separated spouses could still benefit from a former spouse’s will. 

Consider for example Steve and Ellen.  During their marriage, Steve and Ellen prepared mirroring Wills where they named each other as Executors of their respective estates and gifted everything to the other.  In 2017, Steve and Ellen separated, but being very busy with settling their affairs, they never updated their wills.  Then Steve died in 2021.  Because they were not then divorced but only separated, they were still married and hence, "spouses".  Ellen was therefore still entitled to act as the Executor of Steve’s estate and inherit the entirety of his estate under the mirroring wills they had prepared during their marriage.

As you might imagine, that outcome may not have been Steve’s intention.  Recognizing this and the fact that it takes time to settle a divorce, the Act now provides that, unless a will specifically states otherwise, separated spouses are no longer able to benefit under their ex-spouse’s will. 

As of January 1, 2022, if a married couple separates and one of the spouses dies, then the will is interpreted as though the surviving spouse has pre-deceased their ex.  This means that the alternate named Executor under the will, will administer the estate and the Executor must look to the alternate beneficiaries under the will.

While the amendments to the Act include a definition of what constitutes a separation, it has many lawyers scratching their heads.  Clarity as to what constitutes being "separated" will likely require clarification from the courts.

3.     Separated spouses but no will

When a married person dies without a will, the Act provides that the surviving spouse is entitled to a preferential share of the deceased’s estate before funds are distributed to anyone else.  Currently, the preferential share is $350,000.

Until this year, separated people – because still married and not divorced – were considered “spouses” and therefore entitled to the preferential share. 

With the recent amendments to the Act, separated spouses are now treated like divorced couples – the survivor of them is not entitled to the preferential share.  However, again the definition of what constitutes a separation may be unclear in certain circumstances.  It will be interesting to see how the courts interpret this term.

What should we make of all this?  As always, it is important to have an estate plan, and to review it as life circumstances change.  That way, things will unfold as hoped, expected and intended.