When it comes to estate planning, many people need to pay more attention to the importance of having a will. A will is a legal document that outlines how a person’s assets should be distributed after death. Without a will, the distribution of assets is left to the law’s discretion, which can lead to unintended consequences for loved ones. This is particularly true in Alberta, where legislation dictates how a person’s assets are divided if they die without a will.
In this blog post, we will examine the three major consequences of not having a will in light of Alberta’s estate laws.
If you die without a will, you will have died “intestate”. In Alberta, the distribution of assets in the event of intestacy is governed by Part 3: Distribution of Intestate Estates in the Wills and Succession Act. Furthermore, the Estate Administration Act outlines who is entitled to administer your estate if you die intestate.
If intestate, the following consequences may arise due to the lack of a will.
The Estate Administration Act specifies that if an individual were to die intestate, there is a specific hierarchy of priority when applying for a Grant of Administration. The order of priority is as follows:
- A surviving spouse or surviving interdependent partner;
- The child(ren) of the deceased;
- The grandchild(ren) of the deceased;
- The descendent of the deceased, other than the children or grandchildren;
- The parent(s) of the deceased;
- The brother or sister of the deceased;
- The child(ren) of the deceased’s brother or sister if the child is a beneficiary;
- The next of kin determined by sections 67 and 68 of the Wills and Succession Act who are beneficiaries;
- The person who has an interest in the estate because of a relationship with the deceased;
- A claimant; and
- The government.
The legislation also gives the court the power to grant authority to administer an estate in the case of two or more individuals with an equal right i.e., siblings or parents. While it is common for individuals with equal rights to agree on who should act as administrator, if they cannot agree, litigation may result.
Therefore, as a consequence of intestate succession, the court may appoint someone you would not have chosen to administer your estate, resulting in costly litigation among your loved ones.
Intestacy has significant consequences for children under the age of 18, particularly regarding who may be appointed their guardian. A guardian is a person who has the legal authority to make decisions for a child, including decisions about the child’s health, education, and upbringing.
Under the Family Law Act, a parent is the natural guardian of their child. If you die intestate, and the other parent is surviving, then they will be the sole guardian (assuming the factors exist for guardianship under Division 1: Guardianship of the Family Law Act). However, if there is no surviving parent, the courts will be left to decide who will assume guardianship.
Family members can apply to become the child’s guardian, and in that instance, the court will consider the best interests of the child. Factors that the court may consider include the child’s physical, emotional, and psychological needs, the child’s views and preferences, and the ability of the proposed guardian to meet the child’s needs. If no family members are available or willing to act as guardians for a child, the court may appoint a non-family member as the child’s guardian. This is typically a last resort, and the court will only do so if it is in their best interests.
It is worth noting that in some cases, the government may become involved in caring for a child if no suitable guardians can be found. For example, the government may place the child in protective custody if a child is in immediate danger. Alternatively, if a child is in need of ongoing care and support, the government may become the child’s legal guardian and place the child in foster care or a group home.
Therefore, without a will specifying who is to become the guardian of a child, it will be left to the courts to decide. Despite their consideration of best interests, this could have inadvertent consequences for a child and within the family.
Property distribution becomes complicated in the case of intestacy. The Wills and Succession Act also outlines the priority of kin when dividing assets. The order of priority is as follows:
- Spouse or Adult Interdependent Partner: If you have a spouse (married or common-law) or adult interdependent partner at the time of your death, they will inherit your entire estate if you have no surviving children, parents, or siblings.
- Children: If you have children but no surviving spouse or adult interdependent partner, your estate will be divided equally among your children. If any of your children have died before you, their share of the estate will be divided among their children (your grandchildren).
- Parents: If you have no surviving spouse, adult interdependent partner, or children, your estate will be divided equally between your surviving parents.
- Siblings: If you have no surviving spouse, adult interdependent partner, children, or parents, your estate will be divided equally among your surviving siblings. If any of your siblings have died before you, their share of the estate will be divided among their own children (your nieces and nephews).
- Other Relatives: If you have no surviving spouse, adult interdependent partner, children, parents, or siblings, your estate will be divided among more distant relatives according to a specific formula set out in the law.
However, this order is often used as the starting point. In reality, relationships can be much more complicated than the scenarios captured above. In those cases, determining the lawful distribution of assets may be much more challenging. Litigation amongst family members could result, and your assets could be divided amongst unintended recipients against your preferences.
Dunphy Best Blocksom LLP is one of the most recognized estate planning practices in the province of Alberta. DBB Law also provides top-tier legal services in a full range of practice areas, including business and commercial law, civil litigation, and more. To schedule a confidential consultation with a skilled estate planning lawyer, call 403-265-7777 or reach out online.