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New Year, New Estate Laws Are Here

OThere have been a lot of great songs written about change. Like a broken heart, it’s a universal theme, and an essential part of our human experience. One of my favourites is “Video Killed the Radio Star” by The Buggles. (Fun fact – this was the first music video to be played on MTV in 1981.)

Changes to Ontario estate law  

On April 19, 2021, the Accelerating Access to Justice Act, 2021 came into law in Ontario. Effective January 1st, 2022, this legislation makes the following changes to Ontario estate law:

Continued validity of a Will after marriage and invalidity of gifts, appointments in a Will and inheritance on an intestacy after separation

  • Marriage no longer revokes a Will.
  • Gifts to a married separated spouse in a Will, any appointment of a married separated spouse as an executor under a Will, and the right of a separated spouse to inherit on an intestacy (dying without a Will) are all revoked. These rules already applied to divorced spouses but not to married separated spouses. The new rules provide a definition for separated spouses, which includes:
    • spouses who, before the death of one of the spouses, have been living separate and apart for three years as a result of the breakdown of their marriage;
    • spouses who have been living separate and apart and who enter into a valid separation agreement;
    • spouses who have been living separate and apart and regarding whom a court made an order with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage.

No equalization of net family property rights on death if separated

  • Married separated spouses (with the same definition of separation) are precluded from making a claim under the Family Law Act (Ontario) for equalization of net family property against their deceased spouse’s estate. Up to now, married spouses could do so even if separated prior to death.

New substantial compliance rule 

  • A Will can be found to be valid by a Judge if it substantially complies with the execution requirements of Ontario law, rather than needing to be in strict compliance with the rules, if the Judge is satisfied the document meets certain criteria. The new rule specifically excludes the possibility of recognizing an “electronic will” in Ontario, however.

What about common law spouses?

The law regarding how common law spouses’ estates are dealt with has not changed. All of the rules discussed above regarding spouses apply to married spouses only.

So, what can we expect with these new rules?

The law regarding how common law spouses’ estates are dealt with has not changed. All of the rules discussed above regarding spouses apply to married spouses only.

The effect of these changes is likely to be an initial increase in litigation to determine how the legislative changes will be interpreted by the Ontario Court in individual circumstances. How far the concept of “substantial compliance” can be pushed under the new legislative provisions remains uncertain.

Certainly, other provinces which have substantial compliance rules have seen litigation to determine what will be accepted by the Court. For example, in Alberta, two yellow sticky notes (Post-It™ notes) regarding changes to an existing Will were found to be a valid new Will, and in B.C. a note on a computer was found to be a valid Will.

We also anticipate seeing more claims by spouses in circumstances where a deceased spouse did not make a new Will after marriage, and claims involving the question of whether or not the spouses were separated pursuant to the new definition for the purposes of inheritances.

We may also see additional attempts to litigate the issue of beneficiary designations for life insurance or retirement plans (RRSPs, RRIFs and TFSAs, for example) which were not changed by a person after separation or divorce.

Separation and divorce also do not affect appointments under powers of attorney.

“We can’t rewind, we’ve gone too far.” Recognizing and accepting change is important moving forward in life, and is also important for our mental health. The beginning of the New Year is a good time to consider the changes in your life, what the future may hold, and goals for 2022, including finishing projects that you’ve been putting off. Reviewing and if necessary updating your Will and Powers of Attorney is one more for your list, including for some to avoid the negative effects litigation of your estate might otherwise have.

Embrace change and may it create resilience and joy for you in 2022!

— Susannah Roth

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.
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