On behalf of Osuji & Smith posted in Wills and Estate on Tuesday, October 28, 2018.
What do you want to happen when you die? Who will inherit your home and pension plan funds, and who gets your collection of art or hobbies, or cars?
Dying without a Will can leave a trail of unpaid bills, taxes and courtroom battles behind you for those who survive you. Not to mention that you don’t get a say in who gets what.
These are some examples of what could happen:
1) Death freezes your assets:
That means that when you pass away no one is in charge of your estate. Your estate includes what you own, as well as your debts — and getting to both will be a headache for your survivors. Meanwhile, interest keeps piling onto your unpaid credit card bills, and there’s no one to pay off that debt. A judge will have to appoint an executor, someone who will manage your estate.
2) Your spouse and children may have to move out of the family home
If you didn’t decide how you want your possessions distributed, the government will do so for you according to a standard formula set by provincial laws.
3) Your partner may get nothing
If you’re in a common-law relationship, your surviving partner may or may not be entitled to a share of your estate. In several provinces, only married spouses are automatically granted a claim to your inheritance.
4) The government becomes involved in your children’s personal and financial lives
If you don’t name a guardian for your minor children, the state will act as one. The government will also manage their money until they reach the age of majority, a service that may come with steep fees.
5) A steep tax bill
A will — and the legal advice that usually goes with it — can help you avoid a lot of taxes.
When you die, your legal representative has to file your final tax return to the Canada Revenue Agency (CRA) and pay any tax owed up until the point of death. This includes taxes on some of the assets you owe, such as your car, your cottage and certain types of investments. (You principal residence is a notable exception to this tax.)
The government will tax you as if you’d sold all those assets at market value just before dying. If those assets have increased in market value since you bought them, you’ll be taxed on 50 percent of that value increase, called capital gain.
However, those taxes are deferred if the assets pass on to a surviving spouse.
6) Your death may spark a family feud
Any will can be challenged in court. But if you don’t have one, family feuds are almost guaranteed. “No one knows who knows what to do, or who gets what. They run to lawyers for advice.”
7) All your possessions may go to someone you barely know
If you have no immediate family surviving you, provincial law may dictate that your estate go to distant relatives — someone you barely knew or possibly estranged family.
In the Wills and Succession Act, Province of Alberta, Statutes of Alberta, 2010, Chapter W-12.2, you can find detailed information on the matter or contact Osuji and Smith Law Firm for guidance.
- 7 Bad things can happen if you don’t have a Will [Erica Alini] Global News https://globalnews.ca/news/4557041/will-estatement-canada-online
- Wills in Alberta https://www.alberta.ca/wills-in-alberta.aspx
- Province of Alberta, Wills and Succession Act, Statutes of Alberta, 2010, Chapter W-12.2, Alberta Queen’s Printer www.qp.alberta.ca/documents/Acts/W12P2.pdf