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INVALID or NO WILL - Consequences of INTESTACY
There can be some very serious, and unwanted, consequences that arise from dying without a valid will, which demands your immediate attention.
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
When an individual dies without a valid will, that person is said to have died “intestate.” When a person dies leaving a will that does not fully dispose of the estate, and the part that is not dealt with by the will is not otherwise the subject of a gift, that person is said to have died “partially intestate.” In both these scenarios, the relevant jurisdiction’s statutory rules about intestacy govern who is entitled to share in that estate.
There can be some very serious, and unwanted, consequences that arise from dying without a valid will. Some of these consequences can lead to problems for the personal representative charged with administering the estate or the intestate’s successors, who may or may not be entitled to inherit some part of the deceased person’s estate (in particular, where they owned a business). Those potential consequences can include:
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The deceased person’s estate will be subject to very strict statutory legislation, with intestate succession rules tending to be highly inflexible and typically recognizing only the closest of relatives, by blood or adoption, such that the estate’s distribution is highly constrained.
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If the deceased person had children, their surviving spouse or interdependent partner may not be entitled to the deceased person’s entire estate, which may be problematic if that spouse or interdependent partner needs significant support from the estate. However, this varies between jurisdictions, given that in many jurisdictions the spouse or interdependent partner receives the entirety of the estate where the children were also the children of that spouse or interdependent partner.
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Where there is a distribution to children, the deceased person’s children could receive their portion of the estate in advance of when it might otherwise have been intended, such that an eighteen year old child could receive their entire allocation of the estate, as opposed to having it held by a trustee under specific trust conditions.
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Not establishing trust conditions for minor children can be particularly frustrating, especially where the parents tend to best understand the particular needs of their children and what arrangements would actually serve their children best if both parents are no longer capable.
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If the intestate has a successor who is a minor or is mentally incompetent, the Public Guardian and Trustee must be notified and may assume responsibility of the intestate successor’s distribution, resulting in a loss of control of the distribution and additional costs.
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Assets that can roll over to a spouse on a tax-deferred basis generally cannot roll over to children on a tax-deferred basis, which, in the case of intestacy, may result in a taxable gain and liability for tax.
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The deceased person loses the ability to select a guardian for minor children, unless the deceased person had previously done so under the applicable family law legislation.
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Beneficiaries who are receiving assistance under applicable disabilities legislation may become disentitled to benefits if they receive gifts from the estate that increase their assets past certain thresholds. This consequence can be avoided through estate planning.
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If an intestate owns real property in a jurisdiction other than where they are domiciled at death, it will be distributed according to the rules of the jurisdiction where it is located. Personal property will be distributed according to the rules of the jurisdiction where the person was domiciled.
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Without the specific gifting instructions that is set out in many wills, there is no ability to distribute family heirlooms and other prized possessions, which one might prefer going to one’s siblings or close friends, as opposed to one’s spouse or children, who have no real use of those items.
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Relying upon the selection process established by intestacy laws as to who administers a deceased person’s estate can prove unnecessarily rigid, such that a more appropriate person is incapable of being elevated to act as the Personal Representative and better facilitate the administration of the estate and distribution of its assets.
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Dying without a valid will can result in acrimonious, and very expensive, legal fights between and amongst, one’s spouse, children and/or other members of one’s immediate family, given the lack of direction and instruction from a valid will and reliance upon the Court and the jurisdiction’s intestacy laws.
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Dying without a valid will can significantly increase costs, especially legal costs, associated with administering the estate and distributing the assets, given the lack of pre-existing specificity and need for considerably greater Court approval and strict application of intestacy laws.
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Dying without a valid will, and having to proceed with a Court authorized Grant of Administration, will significantly increase the time associated with administering the estate and distributing the assets, especially where a lawyer is not engaged, given the series of approvals that need to be attained from the Court and the prospective beneficiaries, which not only takes time, but also lends itself to questions and controversy [see more on Grant of Administration].
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There are also numerous minor consequences that can arise, and can create otherwise avoidable acrimony or inconsistencies with one’s personal preferences, such as selection and procedures as to burial or cremation, dealing with one’s pets, organ donation, etc.
As such, leaving behind your inheritance without a valid will has the potential for numerous consequences, many of which could either be avoided in their entirety or significantly limited by having a valid will, which was supported by appropriate estate planning in advance of one’s death. Avoid putting your loved ones in the difficult situation of attempting to settle and administer your estate without a valid will, by putting in place the necessary estate planning documents when you are alive and capable. Contact our law firm today at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.
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