How does the death of a spouse impact your separation? What rights do the estate and the separated spouse have in Ontario?

man with lawyer illustrating separated but not divorced and spouse dies in ontario

Disclaimer: This article discusses estate law.  It is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

In a perfect world, life would happen at the pace we need it to, and the timing of big life events would be in a certain order.  Unfortunately, that is not always the case. 

In some rare instances, you may be separating from your spouse when they pass away. What happens in that instance? And how can you make sure your estate plan is ready for anything?

In this article, we will talk about what happens if your spouse dies while you are in the middle of a separation. We will answer these questions: 

  • What is property equalization in family law?
  • Can a surviving spouse make a claim against the estate for equalization? 
  • Can the estate make a claim against the surviving spouse for equalization? 

If you want to learn more about how separated spouses are treated under the Succession Law Reform Act, please note that there have been changes that came into effect January 1, 2022 that impact what you may inherit. For example, marriage no longer legally revokes a previous will. We have an article on the subject here.  

A note for common-law spouses: property equalization only applies to married spouses  

This article only applies to married spouses. The property equalization portions of The Family Law Act do not apply to common law spouses. 

What is property equalization during a divorce? 

Property equalization is a fundamental principle in family law that aims to ensure fairness in the division of marital assets between spouses. It is based on the idea that each spouse is entitled to a fair portion of the property and assets that were acquired during the marriage. 

How is property equalization calculated under Ontario’s family law? 

Calculating an equalization payment involves two main steps. First, each spouse determines their individual net family property (NFP). This means assessing the value of their assets minus any debts as of the separation date and subtracting the value of assets minus debts as of the marriage date. If any property is jointly owned, such as the family home, each spouse includes half of its value in their NFP calculation.

Let’s use Spouse A and Spouse B as examples. First, each spouse calculates their individual net family property.

Spouse ASpouse B
Assets minus debts at date of marriage$20,000Assets minus debts at date of marriage$25,000
Assets minus debts at date of separation$100,000Assets minus debts at date of separation$45,000
Individual net family property$80,000Individual net family property$20,000

Next, the spouse with the higher NFP compensates the spouse with the lower NFP with half the difference. This is the equalization payment. 

In our example, the difference is $60,000. So Spouse A would pay Spouse B half of the difference (or $30,000). The courts may order an amount different from this calculation in certain circumstances, but this is the general principle. 

Now, imagine one of the spouses dies before this process begins. If you are the surviving spouse, what rights do you have to a share of your spouse’s property? 

Can claims be made against estates to protect the property rights of separated spouses?  

Short answer: yes.

Let’s consider our example above. Say Spouse A passed away before Spouse B filed a claim for their equalization payment. Spouse B can still file a claim, even though their former spouse has passed away. 

Even if the equalization process had not begun before the spouse’s passing, the surviving spouse retains the right to claim against the estate for their fair share of marital assets.

Can the estate make a claim against the surviving spouse for equalization?

Short answer: no.

In our example above, let’s say that Spouse B passed away. Can that spouse’s estate file a claim for equalization? It cannot. 

The estate cannot make a claim for equalization against the surviving spouse. It can continue an application that has already been filed, but it cannot bring a new application. The estate is at a disadvantage if an application for equalization has not begun. 

How does this impact Ontario families? 

If you are separating and in poor health, you should commence a court action to have your property divided sooner rather than later. That way, your estate can continue the action, and you can protect your property rights for your children or other beneficiaries. 

Comprehensive Legal Advice with Beeksma Law: Contact us today!

Navigating the intersection of family law and estate law requires expertise and insight into the nuances of Ontario’s legal framework.

At Beeksma Law, we understand the complexities and sensitivities involved in matters of separation, divorce, and estate planning. We understand how The Succession Law Reform Act affects other areas of law. Our experienced team is dedicated to providing comprehensive legal guidance tailored to your unique circumstances.

Whatever your situation, having a strategic advocate in your corner to create a strong estate plan can make a world of difference. Our compassionate and thoughtful approach ensures that your interests are safeguarded every step of the way.

Reach out to our team today for assistance with all things estate law. This includes succession law, intestacy (or if you spouse dies without a will), property outside Canada, and more! 

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