Major Changes to Wills and Estates for Ontario Couples Starting January 1, 2022

Starting January 1, 2022, a number of changes to laws of Ontario relating to wills and the distribution of estates for couples are in effect. If you reside in Ontario and you are married or intend to get married, or if you separated from your spouse without being legally divorced, these changes may have a major impact on your will or the distribution of your estate.

Effect of Marriage on an Existing Will

Prior to January 1, 2022, for an Ontario resident, marriage automatically revoked the entirety of a will signed before the marriage. If one of the spouses died without having signed a new Will after getting married, the assets of the decedent’s estate were to be distributed pursuant to the statutory devolution rules (referred to as “intestacy”).

If the deceased was survived by a spouse and children, the spouse was the sole heir except if the net value of the estate was in excess of $350,000. In such case, the surviving spouse inherited a first tranche of $350,000 and the balance of the estate was to be distributed between the surviving spouse and children.

The new law marks a major shift. The marriage of an Ontario resident in 2022 or a subsequent year does not automatically revoke a will signed before the marriage date. It is therefore recommended that you review any will signed before marriage to ensure that it reflects your wishes.

Effect of Divorce and Separation on an Existing Will

Before the new Ontario rules came into effect, the divorce of a married couple did not revoke the spouses’ wills in their entirety. Instead, divorce revoked the appointment of a spouse as the estate trustee (executor) and/or beneficiary of the estate of the other spouse’s estate.

 If a married couple was separated without being legally divorced, a spouse named in the other spouse’s will retained his/her rights in the other spouse’s estate as estate trustee (executor) and/or beneficiary. In the absence of a valid will, the statutory intestacy rules continued to apply. For greater clarity, two (2) spouses are separated if they have been living separated for at least one (1) year.

With respect to common-law spouses, separation did not revoke or otherwise change their Wills. We remind the reader that if common-law spouses separate, neither spouse has an interest in the estate of the other spouse.

Starting January 1, 2022, if a married couple has been separated for at least three (3) years without being legally divorced and one of the spouses dies on or after January 1, 2022, his/her death triggers the automatic revocation of the appointment of the other spouse as an estate trustee (executor) and/or beneficiary.

Moreover, if a married couple separated in virtue of a separation agreement, and one of the spouses dies on January 1^st, 2022, or afterwards, the appointment of the surviving spouse as estate trustee (executor) and/or beneficiary is automatically revoked, even if the two (2) spouses were married for less than three (3) years prior to the first spouse’s death.

Common-law spouses are excluded from the changes to the Ontario laws governing wills and estates. If they wish to enter to an agreement governing the distribution of property in the event of the breakdown of their relationship, they may sign a “cohabitation agreement”. This is akin to a “marriage contract” (prenuptial agreement) that married couples may sign.

This article highlights a number of the intricacies of wills and the distributions of estates for Ontario resident couples. To acquire a greater understanding of these intricacies as they may apply to you, we highly recommend that you consult one of our estate planning lawyers.