Importance of Having a Will; If You Are in a Common Law Relationship

Question: Why is having a Will crucial for common law couples in Ontario?

Answer: In Ontario, common law partners have no entitlement to inherit under the Succession Law Reform Act, R.S.O. 1990, c. S.26 if one partner dies without a Will. This means that even long-term partners could be left with nothing unless a Will or estate plan is in place. To safeguard your partner's future and ensure your assets are distributed according to your wishes, it's essential to create a comprehensive estate plan. Consult our legal team today to secure peace of mind for you and your loved ones.

Ideally, everyone should have an estate plan prepared, which includes a Last Will and Testament, but this is especially true for couples living together in a common law relationship, as unmarried spouses.

In Ontario, if a person dies without a Will, then they are considered to be intestate and their estate is divided in accordance with the Succession Law Reform Act.  This Act sets out an order of inheritance based on a deceased’s blood lineage. Section 45 of the SLRA states that if a person dies with a married spouse and children, but no Will, then that married spouse is entitled to the first $200,000 of the estate.  This is called the preferential share. Anything over and above this amount is then divided equally between the spouse and the deceased’s surviving children.

For instance, if a person dies with a spouse and two children and their estate is worth $320,000.  The spouse will inherit $240,000, and each child will receive $40,000.  These amounts are determined by giving the spouse their $200,000 preferential share, and then dividing the remaining $120,000 equally by three between the spouse and both children.

Preparing a Will allows a person to direct how their estate is to be distributed on their death, in any manner that is different from the distribution under the SLRA.  A Will allows a person to give everything to their spouse, or give one child more than the other, donate funds to charity, or a myriad of other possibilities.  It also can provide strong tax saving measures and ensure that estates are distributed in accordance with each person’s wishes.  The benefit of the SLRA, is that if a person does pass away without a Will, it provides a “fair” mechanism for the deceased’s immediate family to receive an inheritance under the estate.

Considerations for Unmarried Couples

One huge problem with the above provisions in the SLRA, however, are that these intestacy rules do not apply to unmarried couples. The definition of spouse in that Act specifically states that a couple must be legally married.  The definition in the SLRA of a spouse matches the definition in the Family Law Act, when discussing how property will be divided upon divorce.

The important lesson to take from this is that even if a couple has lived together for 50 years, if they never legally married there is no entitlement to any inheritance under the Succession Law Reform Act, if one person dies intestate.  While both Canada and Ontario recognize common law couples, they do not do so in the same way.  The federal government allows common law couples to file their taxes together and raise their children together as if they were spouses.  The Ontario government allows the same, as well as the ability to apply for spousal support on divorce.  However, neither allows for any property rights on either divorce or death of the other, unless by a binding contract or a Will was made by the decedent.

There are some ways that a common law spouse can receive property on the death of the other, such as if both spouse’s names were on title to property, or if a common law spouse was named beneficiary on a pension or registered retirement accounts, but these are the exception and not the rule.  If one person with a common law spouse dies without a Will, the SLRA will treat the deceased as if they had no spouse.  That means that, in accordance with Sections 47, the deceased’s estate will be divided equally amongst their children, or if they do not have any children, then to their parents, and if their parents are not living, then to their siblings.  The common law spouse will receive no share of property.  This is why it is extremely important to have an estate plan and a Will created, especially if you are in a common law relationship.  Your spouse could be left with nothing even after you have built a life together.

Need for Legal Advice

If you want to make sure your spouse will be protected after you pass, or if you simply have any questions about preparing a Will or an Estate Plan, legal experts would be happy to assist.  Please contact us today by calling, emailing, or clicking the Contact Us link on our website.

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