Roughly half of Canadians don’t have a will. Why dying without one can have serious consequences

“No one really wants to talk about death and dying,” says Christine Van Cauwenberghe, IG Wealth Management’s head of financial planning. “It’s not an easy topic to discuss. It’s not urgent. It’s not something that people think they need to deal with everyday,” she says.

Many Canadians also perceive wills as expensive, Van Cauwenberghe notes, despite possibly putting a greater cost on the family if one is not in place. People just assume their family will figure out their affairs, she adds.

When parents, in particular, die without a will, the mourning process can be overshadowed by legal, financial and emotional burdens that adult children — and other family members — are left to untangle.

Here’s what your family might have to go through if you die without a will:

Finding an executor

An executor is the person appointed to carry out the deceased’s instructions. Arin Klug, co-founder of Epilogue Wills, an online platform for drafting wills, says that wills typically dictate who that person will be. While an executor can be a professional, the duty often falls upon a family member or friend.

Without someone named in a legal will, a would-be executor would have to apply to the court to be granted the certificate of appointment of estate trustee. “That’s a process that takes time and costs money,” Klug says, adding that “everything is frozen, and nothing can be done” until an executor is decided upon.

Sometimes siblings may be caught in debates over who is — or isn’t — the best person to take on the role of executor. “For a lot of families, there can be unspoken resentments and long-harboured ills toward each other,” Van Cauwenberghe says. The executor role can seem to be a position of power and control because the person can decide how to distribute an estate, such as whether or not to sell an asset or distribute it to one of the siblings as part of their equal share, she adds.

“If there’s a lack of trust or there are perceptions that one party is not very competent or capable, it can lead to arguments over who is going to be given that authority.”

While there can be rivalry over which sibling takes the job, the adult siblings can also decide to share the role, says Debbie Stanley, CEO of ETP Canada, a company offering professional estate trustee services.

In the case of three adult children, Stanley says this can look like a “three-headed dragon; they’re almost one person with three heads.” The executors have to go everywhere together to sign a cheque, or to see a lawyer and accountant, which can present challenges if they’re living far from each other, she says.

Uncertainty around inheritance

If a parent dies without a will, they miss out on choosing where all of their assets wind up, and generally speaking “it’s not what the person would have wanted,” Klug says.

Each province has its own set of rules that dictate where assets go, he adds. In Ontario, if one parent dies within a nuclear family consisting of a spouse and adult children, $350,000 comes off the top of the estate and goes directly to the spouse. Whatever is left beyond that gets divided between the spouse and adult children, Klug says. Dividing assets this way isn’t always the most tax efficient compared to leaving everything to a spouse, he adds.

A surviving spouse in Ontario is entitled to the entire estate if there are no children.

The family may also run into debates and drama if the deceased parent assumes an investment account would be left to sustain the spouse throughout their retirement, but it gets divided up instead. In the case of a common-law partner in Ontario, that individual would not be entitled to anything, Klug says.

However, in Ontario, the common-law partner could make a claim for what’s called “dependant’s relief” as a spouse if they cohabitated with the deceased for at least three years or cohabitated with the deceased in a relationship of some permanence and have a child together (natural or adopted), Klug adds. Otherwise, if there are no children in the picture, the estate would be given to the deceased’s parents. If there are no parents, the deceased’s siblings are next in line.

If no parents are in the picture, the default rule is that everything is split equally among the children, he says. Someone would still need to take on the executor role and handle the distribution of the estate.

Sibling squabbles

Dividing an inheritance equally among children can still cause problems, particularly when complicated family dynamics are at play.

Siblings may have their own interpretations or memories of what their parents said about their wishes, especially when it comes to real estate, says Drew Adamick, financial planner at Divergent Financial Planning. For instance, one sibling might say they were promised the family cottage, while another might say it should be divided equally.

Some siblings might also feel entitled to more money than the others. A child who takes on a greater caregiving role, for example, may feel they’ve earned a greater share of the inheritance, while their siblings vehemently disagree, Stanley says.

Sometimes siblings will come to their own agreement on how to disperse the money in a satisfactory way for all parties, but if the siblings don’t like each other, or work well together, it can get messy, she says.

If the situation isn’t resolved amicably, Adamick says, siblings may “lawyer up” to get a greater share of the estate.

“As much as lawyers do fantastic work, in many cases, people can’t afford to hire the lawyers, so they become dependent on the estate proceeds to pay the lawyer off and that can cause further erosion of the estate,” he says. It also means it takes longer to finalize affairs at a time when people want to grieve and move on.

Sorting out sentimental items

In many cases, the best solution for handling assets is to sell and liquidate everything, so that you get the maximum value, Van Cauwenberghe says. Then, divide by the number of siblings so that everyone gets their equal share. 

But in the case of personal effects, it can be difficult to split right down the middle because of personal attachments. “There have been lawsuits over all sorts of items, which may seem small, but in fact have a huge amount of sentimental value,” Van Cauwenberghe says. “Metal, coins, china, all sorts of very specific personal effects can cause a lot more grief than money.”

The situation can get more complicated if a parent dies prematurely or there’s a blended family — in the latter case, some siblings may feel more entitled than others.

Ideally, siblings will come to an agreement among themselves, she says. For instance, one child may receive a mother’s engagement ring while another receives her wedding ring.

If not, it will be up to the executor to make a judgment call, she adds.

“In the end, the distribution of the estate may actually have been the same as (it would have) with a will,” Van Cauwenberghe says. “But it’s the delays, the arguments and the uncertainty that can cause a lot of grief.”