ARE YOU SEPARATED?
YOU SHOULD KNOW THIS INFORMATION ABOUT WILLS AND ESTATES

Introduction
If you die tomorrow, are you happy with the arrangements that you have made regarding your financial affairs?

Basic rules
There are several fundamental legal principles which apply. These principles:
• assist us in giving you advice
• assist you in understanding your rights and obligations
• assist you in ordering your affairs in the manner that you desire.

1. A person who has a Will is called a "testator". A person who has grants a Power of Attorney to another to manage his/her personal or financial affairs is called a "donor".
2. Separation does not affect your Will or your Powers of Attorney. These documents continue to be valid even after separation. If the testator dies, or the donor becomes incompetent, these documents continue to govern.
3. Divorce does affect the Will. After a divorce, the Will is interpreted as if the divorced spouse had died before the testator, even if the divorced spouse is very much alive.
4. Wills and Powers of Attorney are only valid if properly signed. This means that they must be signed by the testator/donor in the presence of two independent witnesses, and both witnesses must sign the document at the same time in the presence of the testator or donor. If the Will is not been properly signed, it is considered invalid and it will not govern the distribution of the estate. There is no law in Ontario that can "fix up" an improperly executed Will.
5. A Holograph Will is one that is completely in the handwriting of the testator and signed by him or her. In this case, no witnesses are required. It is not sufficient for someone to prepare a document intended as a Will on a word processor, print it out, and then sign it. If it is not completely in the handwriting of the testator, then two witnesses are required for the document to be a valid Will.
6. Marriage automatically revokes any prior Will, unless there is a declaration in the Will that the Will is made "in contemplation of marriage", or unless the surviving spouse of the marriage elects to take under the Will following the testator's death.
7. Beneficiary designations under life insurance policies and retirement savings plans are not affected by separation or by divorce. Beneficiary designations can be made in a Will and if the plan or policies referred to has sufficient particularity, such designations will be effective to revoke any previous designations made.
8. Assets are sometimes held in joint tenancy (i.e. real estate, bank accounts, etc.). This means that, on the death of one of the owners, the asset will automatically go to the surviving owner. Separation or divorce do not affect a joint tenancy.
9. Problems can arise by naming a person under the age of 18 as a beneficiary on a life insurance policy. If you die, your life insurance company will either hold the policy proceeds in trust until the beneficiary reaches the age of 18 (at which time he/she will be entitled to receive the entire amount plus accrued interest) or the life insurance company will pay the money to the Court. In either situation the child will not easily have money available to him or her during a time when money may be needed.

General Advice on Separation, Remarriage and Common-law Relationships
Having reviewed these rules, we offer you the following advice on the topic of separation:
• Review your Wills and Powers of Attorney very carefully. Are you satisfied with the current appointment of your executor and attorney? Are the Wills and Powers of Attorney still satisfactory in light of recent changes in your life? If not, new documents should be prepared and signed.
• Before and at the end of the separation or divorce proceedings your Will should again be reviewed to ensure that its terms are consistent with your obligations under a court judgment or a separation agreement.
• If you are entering a marriage contract, you should prepare a new Will. The marriage contract is not a Will even though one of the spouses may give up any claim against the property or estate of the other.
• The current definition of "spouse" in the Succession Law Reform Act does not include persons who are not legally married, and it applies to heterosexual couples only. A person who is in a common-law relationship or a same-sex relationship does not have a claim against the estate of a deceased partner unless named in the Will of the deceased partner. If you are in a common-law relationship or a same-sex relationship and you wish to benefit your partner, a Will including these provisions must be prepared and signed.
• Consider the beneficiary designation that you have made under life insurance policies and retirement savings plans. If you are not happy with the designations and if there are changes to be made, it can be done either on forms provided by the insurer or trustee of the retirement plan or in a new Will.
• Life insurance benefits payable to a designated beneficiary are not part of the estate of the deceased. They are not taxable in the estate or in the hands of the beneficiary. They are not available to satisfy the claims of creditors.
• If a deceased person has not made adequate provision for the support of a dependent (i.e. spouse, child, etc.) in his or her Will, that dependent may have a claim for relief under the Succession Law Reform Act. If a dependent advances such a claim, then the amount of the insurance proceeds may be brought back into the value of the estate for purposes of determining a proper support award.
• If the purpose of the life insurance policy is to benefit the child, you should consider naming your estate as beneficiary and setting up a specific trust in your Will to be controlled by the executor that you choose and subject to whatever conditions you choose.
• On separating, some thought should also be given as to whether property is owned as a joint tenant and whether any joint tenancy with the estranged spouse should be severed.
• A surviving spouse has the opportunity to elect between the benefits given to him or her under the deceased's Will or an equalization payment calculated under the Family Law Act. If the deceased spouse died without a Will, then the election is between the entitlement on intestacy under the Succession Law Reform or an equalization payment under the Family Law Act. The election must be exercised within six months of the deceased death by filing a prescribed form. If no election is made within the six months then the surviving spouses deemed to have elected to take under the Will or under an intestacy is the case may be.

If you have questions about any of the issues described in this pamphlet, you should speak to us regarding your individual circumstances. Your choice of legal counsel is a critical and personal decision. The firm you select should be committed to your business and personal needs.

Revision Date: April 13, 2001

Since 1922, Pavey, Law, Wannop & Witteveen LLP has been providing its clients - large and small - with quality legal advice and services. Our purpose as a firm is twofold - to assist our business clients in the successful performance of their business, and to provide our individual clients with peace of mind through sound, understandable advice and advocacy.

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NOTE: This brochure provides general information and is not intended to be a legal opinion. Readers are cautioned not to rely on this information without obtaining legal advice with respect to their own circumstances.