For British Columbians, Remarriage Necessitates Sound Estate Planning
British Columbia residents who are entering a second or subsequent marriage may be leaving behind a contentious legacy if they don’t update their wills. According to the Estate Administration Act of 1996, if a person does not establish a new estate plan following a second marriage, the terms of the original will control at the time of death, meaning that the new spouse will not automatically inherit everything if the original will is not changed or revoked. If he or she waits to object to the contents of the will until the former spouse is deceased, it will be too late.
Drafting a new will can help blended families avoid conflict
One situation in which estate planning may become more complicated by a second marriage is where a person has children from both the prior and the current marriage or in blended families involving stepchildren. In these scenarios, there are suddenly more people claiming an entitlement to the same amount of money, which makes it important for the parent to leave instructions as to how assets should be distributed.
According to data from the 2011 Census of Population, 12.6 percent of families with children now have stepchildren. More than 5 percent of those couples were considered “complex stepfamilies,” which means that there was at least one child born to the couple and at least one child born to one parent only. As blended families and complex family structures become more common across Canada, the need for a detailed estate plan will likely become more paramount.
Decades ago, the law provided that a remarriage or divorce would void an existing will. Then, the first $65,000 of a person’s estate went to the surviving spouse with the remainder divided between the spouse and children. However, since the passage of the Estate Administration Act of 1996, divorce voids only a gift to the former spouse in an existing will rather than the entire document. The new spouse could theoretically exercise a preferential share to take a portion of the estate, and the remainder would be distributed in accordance with the terms of the will. This could cause discord with any children of the prior marriage who may think the new spouse is taking their money, and it could lead to one or more family members contesting the will in court.
Discussion is key
A financial adviser featured in a Star Phoenix piece recommends that a parent who is leaving all assets to a new spouse discuss the matter with the children in advance in order to avoid unpleasant surprises and litigation later. This discussion is especially important in blended families where children from the former and existing marriages may clash.
Important life changes such as remarriage can have a considerable impact one’s estate plan, but some individuals may nevertheless fail to update theirs. An experienced probate lawyer may be able to help you contest provisions in a will or defeat another person’s claim to vary the will.