Intestate Meaning and its Rules in Ontario

What is Intestacy?

The meaning of “intestate” or “intestacy” is that someone died without a Will.  This happens if a valid Will was never made or was revoked.  An otherwise invalid Will may be validated on Application to the Court by section 21.1 of the Succession Law Reform Act.

Intestacy Rules in Ontario for Inheritance (Succession Law Reform Act)

The following rules in Ontario for intestate succession only apply to deaths after March 1, 2021. 

Under the laws of intestacy in Ontario, if a person dies with a spouse but no children, the entire Estate goes to the spouse.  The surviving spouse also receives the entire estate if it is worth less than $350,000, which is called the “preferential share”. 

If the deceased died with a spouse and children, the spouse receives the first $350,000.00 as a preferential share.  Any amount over the preferential share is split between the spouse and children equally if there are one or two children.  If there are three or more children of the deceased, the spouse inherits the preferential share and 1/3 of any additional assets, while the children split the remaining 2/3 equally between them. 

If there are children and no spouse, the children inherit equally.  In the scenarios above, siblings, parents, and cousins inherit nothing.  Grandchildren also inherit nothing, except that children can inherit the share of their predeceased parent. 

Example:  Adam died intestate in Ontario and had two children; Bob, who survived Adam, and Charles, who died before Adam.  Charles had two children who were alive at the time of Adam’s death.  Charles’ children inherit Charles’ share equally.  Bob’s children inherit nothing from Adam’s estate because Bob is still alive. 

If a person dies with no spouse and no children, the surviving parents or parent will receive the estate.  If there is no surviving spouse, children, or parent, the estate assets are inherited equally between surviving siblings of the deceased, and the children of a predeceased sibling (nieces or nephews of the Deceased) share the deceased siblings’ share equally. 

The next level is nephews and nieces.  Finally, “next of kin of equal degree of consanguinity”, which means the closest surviving relative that can be found.  Shares at these levels are not inherited by the surviving children of a predeceased family member. 

Complications on Intestacy for Relatives of the Deceased

Intestacy matters become more complex the more distant the surviving relations.  It is critical to consider whether a predeceased relative’s share is inherited by their children as this affects who is served with a probate application and the amounts that are inherited.  An improper distribution of estate assets can result in personal liability to the estate trustee. 

Where a person dies intestate and has no surviving relatives, the government is entitled to the assets.  This means that friends cannot claim the assets from a intestate deceased person, even in the absence of relatives.

Who is Entitled to Apply to be Estate Trustee for an Intestate Estate?

The Estates Act provides the priority for who can apply on intestacy, which is:

(a)  the person to whom the deceased was married immediately before the death of the deceased or person with whom the deceased was living in a conjugal relationship outside marriage immediately before the death;

(b)  the next of kin of the deceased; or

(c)  the person mentioned in clause (a) and the next of kin,

The next of kin who have an equal right to apply must agree on who should administer the estate, which will require either a joint probate application or signed renunciation and consent forms. 

Example: If a mother died without a spouse survived by two children, the child who wants to apply must obtain a signed renunciation form from the other. 

If the closes level of surviving kin of the deceased cannot agree on who should act, the hopeful estate trustee will have to apply to court for an order.  

Generally, individuals residing out of Ontario are not entitled to become estate trustees on intestacy.

Third Parties as Estate Trustees on Intestacy

Beneficiaries can agree on a third party acting as estate trustee.  This is common when the beneficiaries all reside out of province and professional estate trustees like lawyers or trust companies are often used.  Katzman Estate Law provides professional estate trustee services. 

What Kinds of Problems Can Arise in Probating an Intestacy?

If a person who is entitled to apply to be an Estate Trustee refuses to consent to the appointment of an Estate Trustee, refuses to communicate about Estate matters, or brings a rival application to be appointed estate trustee, this can cause significant delay and expense. The courts of Ontario have broad discretion to approve or deny the appointment of estate trustees to protect the best interests of an estate’s beneficiaries. Even if there are multiple applications to be appointed estate trustee, the court has no obligation to appoint a specific person.

If an intestate estate (or any estate) sits without an Estate Trustee for too long, it can incur significant tax penalties.

Read our article on probate or estate administration bonds here