One of the more common reasons people tell me they don’t want a will is that it’s a “waste of money.”
But a recent ruling delivers a powerful counter-argument, demonstrating how much more wasteful the decision not to get a will can be when disputes over their estate spiral into a costly court fight.
According to the Ontario Superior Court decision, the deceased’s common-law spouse planned to save money on a will and get around the issue by adding his common-law spouse as a joint owner of his investment accounts. By the time of his 2021 death, the accounts held about $200,000 left over from the sale of a property.
What he didn’t bargain for was a landmark Supreme Court of Canada decision from 2007, which held that gifts from a deceased are presumed to be held in trust for the giver’s estate when evidence is lacking as to intentions. Anyone claiming otherwise must rebut that presumption by proving that the deceased intended for the money to go them.
Without a will in place, the man’s estranged daughter had enough room to argue that the bank accounts should flow to his estate. In addition, the daughter claimed that her father’s partner was not actually a spouse, leaving the daughter as the only beneficiary.
A judge eventually sided with the deceased man’s partner, accepting that they had lived together as spouses from 2018 until his death.
In addition, the court heard that the daughter had not received any gifts or money from her father in the last decade of his life and had no communication at all with him in the last three years.
“This would suggest that it was more likely that [the testator] intended to gift the Investment Accounts to [his widow],” the judge wrote.
Although the proceeds of the accounts ultimately ended up with the person intended by the deceased, it took more than four years after his death to settle the matter and I dread to think how much money the parties have poured into the litigation during that time – much of which may end up being paid by the estate of their loved one.
The judge encouraged the parties to come to an agreement on costs, but I’m willing to bet that both sides spent many times more than it would have cost the deceased to get a will in place.
When made in coordination with a properly executed will, beneficiary designations on things like RRSPs, life insurance policies and Tax-Free Savings Accounts are a critical part of any estate plan.
Naming someone to receive the funds from your plan or policy allows the money to flow straight to them following your death, bypassing your estate. If nobody is designated, then they could become subject to probate and the 1.5-per-cent Estate Administration Tax otherwise payable on all assets in the estate over $50,000.
Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.
