DEATH IN THE FAMILY

Wills

A will is an important legal document which sets out who will receive (inherit) a person’s property upon his or her death.

Naming an Executor

A will should appoint an executor to deal with the property (estate). The executor must look after paying the person’s debts and other expenses of the estate, out of the estate. The executor is responsible for distributing the estate as set out in the will. There are laws, however, that can affect whether a person’s property is inherited as directed in a will. These are discussed below. There are also laws that set out what an executor can and cannot do with the deceased person’s estate.

When naming an executor, it is important to check and confirm the person is willing and able to assume the responsibilities involved. 

Naming a Guardian

If a person has children under 18, his or her will should appoint a guardian to be responsible for the children’s care in the event both parents die. The guardian may also be appointed to look after the children’s financial affairs.

Naming a guardian in a will does not guarantee that person will be chosen if there is a dispute among friends and/or relatives who want to care for the children. Naming a guardian in a will does, however, give the court a clear indication of the parent’s wishes and can carry substantial weight as the court decides who should be the children’s guardian.

When naming someone as a guardian of children in a will, it is important to check and confirm the person is willing and able to assume the responsibilities involved. 

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Requirements for a Valid Will

Three requirements must be met before a will is valid in Manitoba:

1. The maker of the will must ordinarily be at least 18 years old. In a very few cases, the person may be younger.
2. The will must be in writing.
3. The signature of the maker of the will must be witnessed by at least two people unless:

• the will is made by a member of the armed forces on active service or a sailor at sea
• the will is written entirely in the handwriting of the person making it, and is signed and dated by that person – a holograph will.

The Wills Act of Manitoba permits a person to ask a court for an order declaring that a particular document is a valid will even though it does not meet these legal requirements. Before making such an order, a judge must be satisfied by the evidence that the document contains the true wishes of the will-maker. To avoid the expense and difficulties involved in this type of court hearing, it is best to meet all the legal requirements when drawing up a will.

Usually, a person who witnesses the signing of a will (witness) cannot receive any benefits under the will. The witness’s spouse or common-law partner cannot benefit from the will either. A person who is left a gift (bequest) in a will is known as a beneficiary.

A witness to a will can ask a court for an order that a gift to that witness or their spouse or common-law partner under the will is a valid gift.

Before such an order is made, a judge must be satisfied that neither the witness nor their spouse or common-law partner improperly influenced or pressured the person making the will to make this gift. Under these provisions of The Wills Act, common-law partners are considered to be any couples who are living together and have either registered their relationship with the Vital Statistics Agency or who are cohabiting in a conjugal relationship of some permanence. To avoid unnecessary problems, it is a good idea if the witnesses to the will are people who do not benefit from the will in any way.  

If a person cannot read or sign his or her will, it can be read aloud, or signed on his or her behalf by another person or it can be signed with a mark. At least two other people must witness the signature or mark on the will. 

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Changing or Revoking a Will

After a will is made, it can be changed or invalidated in a number of ways.

If a person wants to make many changes to his or her will, it could be easiest to simply prepare a new will. If only a minor change is involved, such as naming a new person to act as executor, a simple document, known as a codicil, can be prepared. Like a will, a codicil must be witnessed by two or more people, unless it is entirely in the person’s own handwriting and is signed and dated by that person (a holograph codicil).

When a will is invalidated or no longer of any effect, it is revoked. A will is revoked if the will-maker:

• prepares a new will
• destroys the original copy
• in writing, indicates an intention to revoke the will, with witnesses
• in all but a few cases, marries after preparing it

A will is almost always invalid if the will-maker marries after it is signed. It is essential to have a new will prepared after marriage. Unlike marriage, entering into a common-law relationship after making a will does not affect the validity of that will.

If the maker of a will divorces after it is prepared, the document will be interpreted as if their former spouse died before them. Similarly, if the will-maker’s common-law relationship is terminated after the will is made, it will be interpreted as if their former common-law partner died before them. This means that even if the person left property to their now former spouse or common-law partner in the will, the former spouse or partner will not receive it. If a will-maker  wishes to leave property to a spouse or common-law partner despite any future divorce or end of the common-law relationship, their will must clearly say so.  Under this part of The Wills Act, termination of a common-law relationship means, for couples who have registered their relationship with the Vital Statistics Agency, that the end of the relationship has been similarly registered.  For couples who have not registered, termination happens after they have lived separate and apart for at least three years.

It is important to know wills are not interpreted in this way when spouses separate, even if they have been separated for many years or are involved in divorce proceedings when one spouse dies. The separated spouse can still receive any bequests left to him or her in the other spouse’s will. Separated spouses must take steps to revise or revoke their wills if they want to limit the extent to which their spouse can inherit from their estate. 

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Assets outside an estate

Jointly Owned Property

People can jointly own real estate (real property), such as their family home, in two different ways: as tenants-in-common or as joint tenants. The way property is owned affects what happens to it when one of the owners dies.

Most spouses own their family home as joint tenants.  Many common-law partners do as well.  If one owner (joint tenant) dies, the survivor automatically becomes the sole owner of the property. This occurs regardless of any provisions in a will. Certain documents must be filed with the local Land Titles Office to change the certificate of title for jointly owned property from the names of both joint tenants to the name of the survivor.

Property can also be jointly owned as tenants-in-common. When property is owned this way, each owner (tenant-in-common) can state in a will what to do with his or her share. If an owner dies with no will, on death his or her share of the property becomes part of the estate and will be distributed according to law. His or her share of the property does not automatically go to the other joint owner. A surviving spouse or common-law partner may still, however, have the right under The Homesteads Act to live in the family home for life (See Property Rights On Death on page 94).

Spouses or common-law partners may jointly own other assets, such as bank accounts or term deposits. As with a home owned as joint tenants, when one spouse or common-law partner dies, the survivor becomes the owner of the entire asset.

Most assets jointly owned by spouses or common-law partners automatically become the property of the survivor when one of them dies. As a result, the assets never form part of the deceased’s estate and so cannot be left to someone else through a will. Any provision in a will doing so is of no effect. A will can only direct who receives assets that form part of a deceased person’s estate. 

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Other Assets Outside an Estate

Another type of asset that often does not fall into an estate is death benefits under a life insurance policy. When benefits are payable to a named beneficiary, the benefits do not form part of the estate. Only if the beneficiary of the policy is the deceased person’s estate do the death benefits go to the estate and form part of the assets dealt with in the will.

Many people also sign forms naming beneficiaries for registered retirement savings plans (RRSP) (designation of beneficiary forms). Unlike wills, these designation of beneficiary forms are not automatically revoked or cancelled by a future marriage, divorce or common-law relationship. A lawyer should be consulted to determine if the will should provide how RRSPs are to be distributed. 

Property Rights on Death

A number of pieces of legislation become important to a family once a spouse or common-law partner has died, even if there is a will. This section outlines the legislation that will affect property rights when a death occurs. 

The Homesteads Act

The Homesteads Act gives the surviving spouse or common-law partner who has homestead rights, the right to live in the family home (homestead) for the rest of his or her life, even if the property was owned only by the deceased spouse or partner.  To qualify as a common-law partner under The Homesteads Act, the couple must have either registered their relationship with the Vital Statistics Agency or they must have cohabited in a conjugal relationship for at least three years.  In the case of a family farm, the homestead includes not only the farm dwelling, but also up to 320 acres of land. This is known as a life estate in the home, and exists no matter what the will of the deceased person provides. This protection remains in place even if the will of the deceased spouse or common-law partner leaves little or nothing to the survivor. The claims of creditors, however, can affect this right.  It is important to know that only one spouse or common-law partner at a time can have homestead rights in a particular home, and a second spouse or partner will not acquire these rights until the homestead rights of a previous spouse or common-law partner are properly dealt with, for example by the first spouse or common-law partner signing a written release of their rights.  

The Family Property Act

The Family Property Act sets out the rules for dividing the value of family property between spouses or common-law partners when they separate, as well as when one spouse or partner dies. To qualify as common-law partners under this act, a couple must have either registered their relationship with the Vital Statistics Agency or have cohabited in a conjugal relationship for at least three years. Generally speaking, family property is any property that the couple acquired while they were married or cohabiting and living together, regardless of which member of the couple owns the property.

Both spouses or common-law partners have the right to an equal share of the value of their family property. If a spouse or common-law partner is unhappy with the assets left to them in the other’s will, he or she may wish to consider asking the court for an accounting and equalization of family property. An accounting involves preparing a complete list of each spouse’s or partner’s  assets (including their value) and debts. The court will determine the total value of the assets each spouse or common-law partner must account for, and how much the spouse or partner with more assets will have to pay the other so each will have an equal share of family property. This is called an equalization payment.

The survivor’s share and any equalization payment owing will be calculated in much the same way as when spouses or common-law partners separate (See Chapter 9, Property). If the spouses or common-law partners were separated when one died, the family property calculations will be as of the date of separation. If the spouses or common-law partners were not separated, then the date of death of the deceased spouse or partner will be used.

Unlike an accounting and equalization on breakdown of the marriage or common-law relationship, a court has no discretion to order that the value of assets be shared unequally on death. As well, a surviving spouse or common-law partner does not have to account for or share certain assets with the estate of the deceased spouse or partner, even if these assets would have been divided had they been separating. For example, if spouses owned their home in joint tenancy, the surviving spouse will become the sole owner of the home on the death of the other spouse. They will not have to account for the value of the home, and will be entitled to own the home over and above their entitlement to half of the value of their family property. Similarly, a surviving spouse or common-law partner will receive any pension survivor’s benefits or, if the beneficiary, life insurance proceeds payable on the death of the other spouse or partner, without having the funds taken into account in the family property calculation.

If there are insufficient assets in an estate to meet an equalization payment owed to the surviving spouse or common-law partner, other beneficiaries of the estate may have to contribute to make up the shortfall. This may also apply to persons who received certain benefits from the deceased person outside their will (such as a named beneficiary under a life insurance policy).

An application for an accounting and equalization of family property after the death of one spouse or common-law partner must be made (with limited exceptions) within six months of the granting of letters probate of the deceased’s will, or if the deceased left no will, the granting of letters of administration. If the surviving spouse or common-law partner had already applied to court for an accounting and equalization of family property when the other spouse or partner died, they need not re-apply.  

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Inheritance where there is no will

The Intestate Succession Act sets out how the property or estate of a person who dies without a will (intestate) must be distributed.

If there is no will, the surviving spouse widow or widower, or the surviving common-law partner will usually receive the entire estate. This occurs if:

• the deceased left no descendants such as children or grandchildren
• all the deceased’s descendants are also descendants of the surviving spouse or common-law partner
• the estate is worth $50,000 or less

To qualify as common-law partners under The Intestate Succession Act, a couple must have either registered their common-law relationship with the Vital Statistics Agency or they must have cohabited in a conjugal relationship for either at least three years or at least one year and they have a child together.  If a person dies leaving both a spouse and one or more common-law partners, the one whose relationship with the deceased was most recent will have priority over any others.  However, this priority cannot stop another spouse or common-law partner from applying for an accounting and equalization of assets under The Family Property Act, as described above.   

If there are descendants who are not also descendants of the surviving spouse or common-law partner (such as children from another marriage), the whole estate does not automatically go to the surviving spouse or partner. In those cases, the surviving spouse or partner will receive the first $50,000 or half of the estate, whichever is worth more, and half of the remainder. This means a surviving spouse or partner will always receive at least 75 per cent of the estate.

If the entire estate is not going to the surviving spouse or common-law partner because the deceased left children from another relationship, all of the deceased’s children will share the rest of the estate equally. At most, the deceased’s children will share 25 per cent of the estate.

If the deceased left no spouse or common-law partner, his or her children will share the estate equally. If a person dies without a spouse, common-law partner or descendants, his or her estate will be distributed to the closest relatives. For someone to receive part of an estate where there is no will, he or she must live 15 days longer than the person who died.

The Intestate Succession Act also provides that if spouses or common-law partners are separated and

• in the case of married spouses, either has applied to court for a divorce
• in the case of common-law partners who had registered their relationship with the Vital Statistics Agency, either or both had registered the end of the relationship before one of them died
• in the case of common-law partners who had not registered their relationship with the Vital Statistics Agency, they had lived separate and apart for at least three years
• they have already made a final division of their property

the surviving spouse or common-law partner will not receive a share under the act. In these circumstances, the survivor may still be entitled to apply for an accounting and equalization of assets under The Family Property Act (if property matters have not already been dealt with) and may also have rights under The Homesteads Act.

Unless a person leaves a valid will, his or her estate will be dealt with under The Intestate Succession Act. It is important to remember that through a will a person can leave parts of an estate to a common-law partner or to more distant relatives who would not inherit under that act, or to charities, churches, friends and so on.

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Financial Support from the Estate for Dependants

The Dependants Relief Act protects family members of a deceased person who were dependent upon him or her for support.

The court can be asked to make a maintenance order if the will does not provide enough support for dependent family members or in cases where there is no will.

The deceased’s spouse, common-law partner, children, parents, grandparents, brothers, sisters, or children to whom the deceased acted as a parent, and former spouses or common-law partners with maintenance orders or agreements can claim support from the estate under the act.  To qualify as common-law partners under The Dependants Relief Act, a couple must either have registered their common-law relationship with the Vital Statistics Agency or they must have cohabited in a conjugal relationship either for at least three years or for one year and they have a child together. The court has the power to change the terms of a will to allow for support of the family members who were financially dependent on the deceased.

Adult children, parents, brothers, sisters, grandparents and grandchildren of a deceased person must be able to show that they were substantially dependent on that person for financial support. The act allows people in financial need to apply for maintenance. It does not provide a way for financially independent family members who think they should have been left money or property by a deceased relative to ask the court for part of the estate.

The maintenance for dependent family members that a judge orders be paid from an estate may be in the form of regular (periodic) payments (such as monthly), a lump sum payment or a transfer of property. 

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Rights of Surviving Family Members under The Fatal Accidents Act

If someone has been killed in an accident because of the wrongful or negligent act of a third party, that third party can be sued in court. The party may be ordered to pay compensation to the person’s surviving spouse or common-law partner, children, grandchildren, parents, sister or brother.  To qualify as common-law partners under The Fatal Accidents Act, a couple must either have registered their common-law relationship with the Vital Statistics Agency or they must have cohabited in a conjugal relationship either for at least three years or for one year and they have a child together.  In any case, the couple must have been cohabiting immediately before the one partner’s death.

The Fatal Accidents Act also makes it clear that the term “parents” includes grandparents, step-parents and people who stood in place of a parent (in loco parentis) to the deceased person. The term “child” includes a step-child and one to whom the deceased person stood in place of a parent.

The Workers Compensation Act and The Manitoba Public Insurance Corporation Act each provide for compensation payments to dependant family members of a person who has died under circumstances covered by that act. 

Pension Benefits on Death

Canada Pension Plan

Spouses, common-law partners and dependent children may be eligible for survivor’s pension benefits under the Canada Pension Plan on the death of a spouse or parent where the deceased contributed to the plan for at least three years after turning 18. A single lump sum death benefit payment may also be made to the estate of the deceased.

The method of determining eligibility for benefits is complicated. For more information about benefits and what is needed to qualify for Canada Pension Plan death benefits, contact Social Development Canada in one of the following ways:

• In person

Winnipeg:
391 York Avenue
1122 Henderson Highway
1031 Autumnwood Drive
3338 Portage Avenue

Brandon:
1039 Princess Avenue

• By telephone:

1-800-277-9914 toll free (English)
1-800-277-9915 toll free (French)
1-800-255-4786 toll free (TTY)

• By mail:

Social Development Canada
Income Security Programs
P.O. Box 818 Stn. Main
Winnipeg, MB  R3C 2N4

• Through the Internet:

www.sdc.gc.ca

Canada Pension Plan death benefits should be applied for as soon as possible. Waiting may result in a loss of benefits.

Pension Benefits Legislation

The Pension Benefits Act 

The Pension Benefits Act of Manitoba applies to pension plans sponsored by an employer for employees in Manitoba. It does not apply to the Canada Pension Plan, to federal government employees, to federally regulated pension plans or to personal retirement savings (such as an RRSP).