You can include anyone you want in your will in Ontario. But can you exclude an abusive spouse? For the sake of peace in the family, being generous to a spouse can be in your best interests. Because if you’re stingy, your spouse can still get justice.
Ontario Family Law and Your Will
You decide to punish a disliked spouse by leaving them next to nothing in your personal will. Under the Ontario Family Law Act, your spouse can take whatever you leave them. Or they can elect to take what they would have received if they had divorced you immediately before you died.
Treating Your Spouse Fairly After Death
How does that work? Ontario Probate Court aims for fair treatment. When your final will is withholding, your spouse can demand an equalization payment. That payment is equal to half of the difference between your two estates, less any debts you had. A wills and estates lawyer calculates the amount.
Calculating Spousal Equalization Payments
Equalization is the division of net family property after family breakdown. As marriage in Ontario is an economic partnership, what’s yours before marriage is yours. What you acquired after you married is split (called property division). The value of your net family property is calculated as of the day before a divorce or death and you each receive an “equal” share. Unless a divorce court orders otherwise, your net worth on the day you married is deducted, as is certain property such as gifts from family members meant for you alone.
Electing for an Equalization Payment in Ontario
Gerald and Tara are a prime example. Other than real estate, Gerald’s net worth was $175,000 when he died. His spouse Tara had net property valued at $100,000. The difference between Gerald’s and Tara’s valuations was $75,000. Since Gerald’s estate was worth more than Tara’s, she could elect for an equalization payment to even out their assets. That meant she was owed half of what was left after his debts were paid. Gerald had lived frugally all his life and died owing only $15,000 for a newish Ford F-150 truck. Tara’s share after his debts was $30,000 (50% of $75,000 minus $15,000). Tara had the choice of taking that or a $10,000 gift in his will.
What Happens to Other Heirs’ Share?
Gerald’s kids were disgusted. Their stepmother was verbally abusive and unfaithful. The couple hadn’t lived together for years. Giving Tara half his net property wasn’t what Gerald had intended. Worse yet, the equalization payment reduced their inheritance by $30,000. The probate court deducted it from their share.
Spitting the Matrimonial Home in Ontario
To compound the kids’ grief, Gerald and Tara had owned a bungalow and Gerald had inherited his parents’ cottage in Haliburton. The kids got the cottage, since it was willed to Gerald alone. But with no separation agreement stating Tara couldn’t use the matrimonial home, she moved back into the bungalow with her stepkids, who were by now in college. It was up to their lawyer to go to court to force Tara out for being abusive, sell the home and share the proceeds 50/50.
Divorce and Property Division After Death in Ontario
Too bad Gerald hadn’t divorced Tara. That $75,000 gap between their valuations would have entitled Tara to an immediate equalization payment upon divorce, squaring the difference between their marital assets. The divorce would have automatically struck Tara from Gerald’s will. Gerald could have kept the matrimonial home, paying Tara her share of its value when they divorced. Even if the home’s value had gone up, Tara wouldn’t have been entitled to any of his newfound wealth.
Wills and Common Law Spouses in Ontario
A common law relationship would also have protected Gerald’s assets. Common law spouses in Ontario are not entitled to equalization payments after death or family breakdown. They can only share in the value of assets they bought together. Tara would have been stuck with the $10,000 in Gerald’s will. Since she didn’t buy the bungalow jointly with Gerald, she would have been out of luck there too. Unless…
Unjust Enrichment and Common Law Couples
A less quarrelsome couple might have shared their housing expenses. The bungalow was in Gerald’s name and he had bought it. But if Tara had paid for significant renovations or upkeep, she might have made a case for unjust enrichment. Tara could have argued their common law marriage was a joint family venture and Gerald’s estate was keeping a disproportionate share of the profits from it. But that’s another story.
Talk to a Wills and Estates Lawyer About Spousal Inheritances
Axess Law’s wills and estate lawyers in Greater Toronto or our Ottawa law firm can size up your situation and give you practical advice. Book an appointment by calling toll free to 1-877-552-9377 or 647-479-0118 in Toronto or using our online booking form. Legal advice is available 7 days a week, at times convenient for you, by video conference or in person. Our flat fee rates are affordable and start at $199 to make a personal will.
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