For many spouses, their wills are meaningless until the second of them passes away.
I will explain how that bizarre statement can be a reality by identifying the various things you might own and how your will could have no impact on those assets on your death.
The highest value asset most of us own is our home.
A common way for spouses to own their home is as joint tenants, with both of their names listed on title along with the words 鈥渁s joint tenants鈥�.
Each joint tenant has something called a right of survivorship.
The right of survivorship has been referred to as the 鈥渦ltimate gamble鈥�, i.e. the ultimate owner of the property will depend on the uncertainty of who will die first.
On the death of one joint tenant, their interest in the property is extinguished, leaving ownership in the hands of the surviving joint tenant.
It is a simple administrative matter to change title to the property to remove the deceased鈥檚 name.
The Land Title and Survey Authority provides online instructions about how to do that at this link here (). The process can be done entirely online, it appears, without the assistance of a lawyer.
It doesn鈥檛 matter what your will says. Your will could name anyone as beneficiary. Or you might not have a will at all. If you are a joint tenant owner of real estate, your ownership ends on your death, leaving the property in the hands of the surviving joint tenant.
The next highest value assets are often registered investments like RRSPs and TFSAs.
Spouses commonly name each other as beneficiary of their registered investments.
If a beneficiary has been named, the proceeds of registered investments will go directly to the named beneficiary on your death, regardless of what your will says.
Unregistered financial assets like savings, chequing and investment accounts can be held in the same kind of joint tenancy as real estate.
Jointly owned bank and investment accounts work the same as jointly owned real estate. It doesn鈥檛 matter what your will says. Those accounts become solely owned by the survivor.
Vehicles can be owned jointly as well, passing to the surviving joint owner on your death regardless of what your will says.
Your will determines what happens to your estate.
Joint tenancy ownership and the naming of beneficiaries for registered investments cause assets to pass outside of your estate, directly to your intended beneficiaries.
If nothing ends up in your estate, there are no assets for your will to have an impact on.
You might ask why you and your spouse would go to the expense of making wills if you have arranged your affairs to eliminate an estate. You might consider waiting to make a will until one of you has passed away.
I recommend that you make your wills while you both have the capacity to do so, as useless as the wills might be when the first of you passes away.
One reason is that you might fail to be consistently mindful over the years to ensure your affairs continue to eliminate an estate. Out of inadvertence, an asset might be acquired solely in only one of your names. Or a significant asset might be gifted, from an estate or otherwise, to only one of you and it might not occur to you to rectify the ownership to be joint.
Another reason is that by the time one of you does pass away, the other of you might no longer have the cognitive capacity to make a will.
And as unlikely as it might be, the two of you might meet an untimely death at the same time.
Dying intestate (without a will) is not necessarily a problem, but it certainly can be. I鈥檝e written previously about what happens if you die without a will. E-mail me if you would like a link to that previous column.
Arranging affairs so that everything goes to your spouse outside a will can seem to be a brilliant bit of estate planning. But the brilliance falls apart with blended families which I鈥檝e also discussed in previous columns.
The nutshell problem with blended families is that an estate plan that leaves all assets in the sole ownership and control of one spouse can result in the other spouse鈥檚 children being completely eliminated from sharing in their parent鈥檚 estate.
And there can be other reasons why such an arrangement would not be optimal. I will always recommend that legal and estate tax accounting advice be sought to assist with estate planning.
I will end with a caution that transferring assets into joint tenancy does not, in itself, automatically result in a right of survivorship. In fact, there is a presumption that a gratuitous transfer of property into joint names does not. An example of a gratuitous transfer is a parent transferring an asset from their name alone into their and their child鈥檚 name, without compensation.
As with all things legal, there are nuances in the law and a consultation with a lawyer can be invaluable.
I welcome e-mails (paul@hlaw.ca) about end-of-life topics that would interest you. Please don鈥檛 hesitate to reach out.
Paul Hergott
Lawyer Paul Hergott began writing as a columnist in January 2007. Achieving Justice, based on Paul鈥檚 personal injury practice at the time, focused on injury claims and road safety. It was published weekly for 13 陆 years until July 2020, when his busy legal practice no longer left time for writing.
Paul was able to pick up writing again in January 2024, After transitioning his practice to estate administration and management.
Paul鈥檚 intention is to write primarily about end of life and estate related matters, but he is very easily distracted by other topics.
You are encouraged to contact Paul directly at paul@hlaw.ca with legal questions and issues you would like him to write about.
