Recently there have been some major legislative changes to estates practice in British Columbia. The Wills, Estates and Succession Act, S.B.C. 2009, c. 13("WESA") came into force on March 31, 2014. So what does this mean for separating families?
There are too many changes to mention them all here, but as a Collaborative family lawyer and an estate planner, I, Catherine Brink, wanted to touch on one of the major changes that effects separating couples. The new law - WESA - says that once parties have separated, they are no longer considered "spouses" for estate planning purposes and they will no longer benefit from gifts given under the will of their former spouse.
So say George and Amal had each previously signed a will that gave their respective estates to the other upon their death, and to their young children in the alternative if the other was not then alive. Down the road, George and Amal decide that their marriage is not working and they are separating. Once they have decided to separate (even though there is no divorce order and no separation agreement), the gift to the other in their respective wills is revoked. This means that if George dies shortly after separation, his estate goes to the children managed by an appointed trustee and not to Amal. This may (or may not) be what the couple wants to happen.
That said, the surviving spouse still has a claim under the Family Law Act to family property owned by the other, but the gift in the will is no longer valid. This is a major change from before. Previously, the separated former spouse would still have a claim against the estate as a "spouse" until a divorce order was made (for married spouses at least).
WESA does not change what happens to assets that fall outside of your estate - like property subject to a beneficiary designation (such as RRSP, TFSA and insurance designations), or to real property in joint tenancy. Each situation is different, and it is important to figure out what the effect of separation has on your estate plan. It is also important to make sure that you are protected if something happens to your ex-spouse - especially if there are support claims. In that case you want to make sure there are insurance or other designations in place right from the start.
There is always a lot to think about when separating - and it can all seem overwhelming at times. You want to do what is best for your children; you want to make sure that if something happens to you or your spouse, your family is taken care of. The best thing to do is ask your Collaborative divorce lawyer if your situation is one in which you should think about your estate plan early on in the separation process. If your Collaborative lawyer does not practice in this area, he or she can refer you to someone who does. Sometimes it just takes a few important changes to make sure your family is protected.
Collaborative Divorce Vancouver is a team of professional family lawyers, divorce coaches, child specialists, and financial experts who will be happy to speak with you and answer your questions. Contact one of us today!