Marriage & Wills 101
Is a spouse entitled to inheritance money in Canada?
If you’re married or in a common-law relationship in Canada, you and your significant other probably own a lot of things together (and some things separately too). And maybe you’ve wondered what happens with all of those things when one of you passes. Does your partner automatically get everything? Do they get anything? Does it make a difference if you have a Will? After all, if your partner will receive your entire inheritance, do you even need a Will?
These are all good questions to ask.
Many people think their partner will automatically inherit all their assets, but the truth is, that might not be the case. It’s not always a given that your spouse receives everything you owned, including your real estate, home, and investments.
There are a few factors that determine your significant other’s inheritance is after you die. Among them:
Whether or not you have a Will
The legal status of your marriage
What province you live in
Your family situation (e.g. If you have children with multiple spouses.)
How you own your assets and property
Your partner’s inheritance with and without a Will
Here is some information about the potential division of your property based on various scenarios and what inheritance your partner might automatically receive.
If you have a Will
When you write your Will, you decide who inherits your property after you die. If you have a Will and name your partner as a beneficiary, they will inherit what is left to them in your Will.
If anyone challenges your Will, and the court finds the challenge valid, the division of assets might change.
If you have a Will and haven’t left your partner anything, they often still have some rights under something called “dependant’s relief” (which might go by a different name based on your province).
Generally speaking, dependant’s relief exists to protect dependants who rely on you for support while you’re alive but don’t stand to inherit sufficient assets after you die. In many parts of Canada, if you provide support for someone while you’re alive, you’re expected to provide support after your death. If dependants are excluded from your Will, they may still have a legal claim.
Who qualifies as a spouse under a Dependant’s Relief claim?
In Ontario, a spouse is a person who:
Is legally married to you, or
Is not in a marriage with you who you have cohabitated with continuously for a period at least three years; or
someone you’re in a relationship of some permanence and have a child together (natural or adopted)
If you don’t have a Will
If you don’t have a Will, it’s called dying intestate. That means that you haven’t left instructions on how to distribute your property.
When you die without a Will, provincial law dictates how your property is distributed to your surviving relatives. Your partner’s inheritance depends on the province you lived in, your marital status, and your family status.
If you’re legally married in Ontario
If you live in Ontario and you die without a Will, your property is divided based on the following:
A spouse and no children: Your spouse inherits your full assets
A spouse and one child: Your spouse inherits the first $200,000; the rest is split between your spouse and child
A spouse and multiple children: Your spouse inherits the first $200,000; the rest is split between your spouse and your descendants.
Update: As of March 1, 2021, if someone’s spouse dies without a will and they have children together, the surviving spouse now receives $350,000 of the estate, with the rest split among the spouse and children.
If you’re legally married in BC
If you live in British Columbia and all your children are also your spouse’s, your spouse’s entitlement is $300,000, and then a share of the remainder.
If any of your descendants are not your spouse’s—for example, they’re from a previous marriage—your current spouse’s entitlement is $150,000 and a share of the remainder.
If you had no children, your spouse’s inheritance includes the full estate. If there are two or more spouses who have a claim to a share–for example, in the case of a separation or divorce–they can agree amongst themselves as to how to share the spousal portion. If they cannot agree, then the court will determine how the spousal portion will be divided.
If you’re legally married in Alberta
If you live in Alberta, the full inheritance goes to your spouse if every child is in common (or if you had none.)
If you had any children with someone else, your spouse receives either 50% of the estate’s net value or $150,000, whichever is greater.
In other provinces, the amount your partner automatically inherits when there are descendants varies.
If you’re common-law
In Ontario, a common-law spouse is not considered a legal spouse if you die without a Will. That means they have no automatic claim to anything. The laws are different across the provinces.
In Alberta, British Columbia, Manitoba, or Saskatchewan if you die without a Will, your common-law likely qualifies as a spouse based on the definition of “spouse” in your province. How much your common-law partner receives depends on the rules of your province.
If you live in a province where your common-law partner isn’t considered to be a “spouse” under the laws dealing with estates, it’s that much more important to have a Will. Otherwise, they will need to make a claim in court to be considered a dependant—a process that is time-consuming, costly, and stressful.
Many factors determine how much your common-law partner can receive through a Dependant Relief claim.
In Ontario, for example, the court considers the following information about your common-law partner:
Their current assets and ability to support themself,
Their age and health,
Any agreement you had with them,
Any claims made by any other dependants; and
The length of time you two lived together.
Type of ownership affects how assets are inherited
The assets that make up your estate take many forms, including real estate, bank accounts, and investments.
How you own each asset determines whether your partner automatically receives it after you die. If you own assets that don’t name your spouse as joint owner—real estate or an investment account for example—then they might not automatically inherit it.
If you and your partner own real property together, for example, your matrimonial home, you likely own it either as “joint tenants” or as “tenants-in-common.” Only if you own the property as joint-tenants will there be a right of survivorship. This means that if one of you dies, the other (surviving owner) automatically inherits the entire property. That property goes directly to the joint owner.
Similarly, if you own a joint account with money in it at the bank, that money goes to the surviving joint bank account owner, meaning the second-to-die. The funds don’t have to be used to pay off your debts or face an estate administration tax.
Owning real estate as “tenants-in-common” means that you each legally own your own share of the property. The law views each of you as being separate owners and you are free to leave your portion of the property to whomever you wish. In this scenario, either of you has the right to name anyone as the beneficiary of your share of the property.
What are spouses automatically entitled to?
As we discussed, there are some cases where your partner will automatically inherit your full estate. But, it’s not always the case. There are many factors that determine whether that will be so. Those factors will determine how much your partner receives and what (or how much) any of your other dependants receive.
It’s important to understand that if you don’t have a Will, you don’t have an executor. So even if your significant other stands to inherit everything, they won’t be able to access that money or start receiving your property until someone applies to court to be named the executor. It will likely take longer for your spouse to start receiving any distribution of assets from your estate.
Common-law spouses or spouses in situations where there are descendants involved do not automatically inherit everything. The province you live in and your family situation are important factors in deciding how much your spouse automatically inherits, and in some cases, your common-law partner might not have a claim to your assets.
If you have any concerns that your assets might not go to your spouse, consider writing a Will to make sure that your assets get distributed according to your wishes.