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New Legislation For Wills

June 24, 2014

Tax Question:

What are the new rules for wills and why do I need a will?

Facts:

The new Wills and Estates Succession Act (WESA) came into effect on March 31, 2014. There are major changes for those people that do not have a will. There are only minor changes for those who currently have a will.

Discussion:

Everyone should have a will to facilitate the distribution of their possessions and assets upon death. A will is also important for the following reasons:

  • Appointing a guardian for any of your children under the age of 19
  • Appointing a representative to look after your affairs, which is called the executor
  • Designating a certain age for your beneficiaries to receive their inheritance
  • Avoiding the provincial laws if you die without a will such as the government appointing a public guardian and trustee for your children
  • Reducing the cost of administering your estate
  • Business succession planning
 

Here is a list of major changes as per the WESA for a person who dies without a will:

  • The spouse is entitled to $300,000 if all the children are shared with the deceased (previous spousal share was $65,000). The spouse only gets $150,000 if the deceased’s children are from another relationship
  • The spouse receives 50% of the balance of the estate not including the matrimonial home (previous spousal share was split equally with the children)
  • The children will get the remainder of the estate to split equally (the previous share split equally with a spouse)
  • The spouse does not get a life interest in the home (previously the spouse did have a life interest in the home). The spouse will have a right to purchase the matrimonial home or elect to have it considered to be part of the estate
  • Different distribution rules for those who do not have a spouse or child. The new rules will be based on closeness to a parent rather than just blood relations
  • New probate rules and forms are required to be sent to all beneficiaries and heirs
 

A will should be reviewed when there is a major change in your life such as a birth, death, marriage or marital breakdown in your family. You may also want to change the will if you have a substantial change in assets/liabilities or if there is a change in tax laws.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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