A Will. The final testament of everyone who has lived. The final word. The final say. Sacrosanct. Unchangeable. To be respected. Right?
Not quite. A Will can be ignored for a number of reasons. Among them, perhaps the most eyebrow-raising is that a spouse can opt to ignore the contents of a Will!
Gimme 50
Following the death of a husband or wife, there is a 6 month period within which the surviving spouse can either accept the contents of the Will, or elect to receive a 50% share of the “net family property”. So, the surviving spouse can simply assess which option would deliver a greater portion (or all) of the assets available.
This ability is similar to the rights of a spouse following a divorce - in which the “net family property”, the assets accumulated over the course of the marriage, is divided pretty much 50/50. It is based on the same law - Section 6 of Ontario’s Family Law Act.
The ability is referred to as a “spousal election.”
What if the spouse died without a Will? Well, in that event, the law (Part II of the Succession Law Reform Act) sets out a formula for the distribution of the assets of persons that die “intestate” - that is the legal jargon for dying without a Will. According to that formula, the surviving spouse is entitled to the first $200,000 of the deceased’s estate, with any remainder to be divided up based on whether or not the deceased had children, and if so the number of children. This is called the “entitlement”. Here is where it gets interesting - the surviving spouse can still choose between this entitlement and a 50% share of the net family property!
You Can’t Pick Cherries
It should be noted that this is strictly “either / or”. The surviving spouse can’t opt for a spousal election partly, and for the Will partly; or opt for the entitlement partly, and for the Will partly. In essence, there is no cherry picking. There is an exception to this rule though - the Will of the deceased can specifically state that the surviving spouse’s entitlement in the Will is to be added to the amount the surviving spouse is entitled to under spousal election.
More on that “Net Family Property”
To clarify the amount of money a surviving spouse may be entitled to under spousal election, Section 5(2) of Ontario’s Family Law Act states that “if the net family property of the deceased spouse exceeds the net family property of the surviving spouse, the surviving spouse is entitled to one-half the difference between them.”
To provide an example of what this might mean, let us assume that Samantha passes away with a net family property of $1,300,000. Her surviving husband, Mario, has a net family property of $500,000. The difference between them is $800,000. They live in Ottawa, so Ontario Wills & Estates Law applies. Mario would be entitled to a claim against Samantha’s estate for $400,000. This is also referred to as an equalization payment because the net family property of both Samatha and Mario would be $900,000 following the payment.
The net family property, for each spouse, is the amount accumulated over the course of the marriage minus the amount brought into the marriage, and minus any debts. It gets quirky though. A number of assets are excluded from the calculation, such as gifts and inheritances, insurance proceeds and some court settlements.
So, a surviving spouse can ignore a Will, and opt for a spousal election instead, but doing so can get pretty labyrinthine pretty fast. Think this might be your situation now or some day? Best to retain a Wills and Estates lawyer before you make the decision - the lawyer can help calculate your net family property and determine the best choice in your particular situation.
About That Deadline
You noticed the bit about the 6 months, eh? Well, it is a rigid deadline, until it isn’t. In essence, a judge can move the deadline if there is a valid reason to do so. For example, if the execution of the estate was delayed and that was not the fault of the surviving spouse. After all, how can you decide between two options if you have no clue about one of the options?
Two fairly recent cases in Ontario reinforce this possibility. They are Mischuk v. Mischuk, 2013 ONSC 4122 and Aquilina v. Aquilina, 2018 ONSC 3607. In both cases, the application for an extension was heard within the 6 month time period following the passing of the deceased and was granted.
There is also a more recent court case in Ontario - Lundy v. Lundy, 2017 ONSC 2101 - which demonstrates that an extension of the period within which a living spouse may seek a division of net family property will not be granted when the application is made outside of the initial 6 month period.