Spouse's Election on Death: Equalization or the Will in Ontario

When your spouse dies, the will may leave you less than you would receive if the family property were divided the way it would be on a separation. Ontario law gives a surviving married spouse a choice, and the choice has a firm time limit.

This article explains the options, the form and deadline, what happens if you do nothing, a separate claim for support, and some tax points to raise. Your situation may turn on details such as the size of the estate and how property was held, so a lawyer can confirm how this applies to you.

The choice you have as a surviving spouse

When a married spouse dies, the survivor can claim half the difference in net family property under the Family Law Act, take what the will gives, or, if there is no will, take their share under the Succession Law Reform Act.

These are alternatives. In general you cannot simply collect the best of both, which is why the effect of the election matters so much.

How an equalization claim is worked out

In the standard equalization calculation, each spouse values the property they owned on the separation date, less debts and excluded property, then subtracts the net property owned on the marriage date. The spouse with the larger net family property pays half the difference, and a negative share counts as zero. How the valuation applies when a spouse has died is worth confirming with a lawyer.

• Gifts or inheritances (other than the family home), life insurance proceeds received because someone died, personal injury money, and property excluded by agreement are not shared.
• The full value of the family home is shared even if it was owned before marriage, gifted or inherited.

A court can divide the family home differently only in very special situations where an equal split would be extremely unfair. Comparing the equalization number with what the will leaves you is the heart of the decision. A lawyer or accountant can help value assets such as a business, a pension or a cottage.

The form and the six-month deadline

To claim equalization, the survivor must file the Election of Surviving Spouse form with the Estate Registrar for Ontario (c/o Toronto Estates Office, Superior Court of Justice) no later than six months from the spouse's death.

If no election is filed, the survivor is deemed to take under the will or the intestacy rules. Missing the date can therefore lock you into the will, even if equalization would have been worth more.

What the election does to the will

• If you elect equalization, gifts to you in the will are deemed revoked unless the will expressly says the gifts are in addition.
• The estate cannot be distributed within six months of death without your written consent or court authorization.

Check carefully whether the will says anything about gifts being in addition. That wording can change the result of the choice.

Tax points to raise with an accountant

At death, a person is deemed to have disposed of capital property at fair market value immediately before death. If capital property passes to a surviving spouse or common-law partner resident in Canada, or to a testamentary spousal trust, the deceased is instead deemed to sell at adjusted cost base, so the capital gain on the final return is zero and the survivor takes over the deceased's cost.

• For this rollover, the property must be locked in for the spouse or trust no later than 36 months after death, and a written extension request can be made to the Tax Services Office before the 36 months end.
• The legal representative can elect in the final return, property by property, to transfer at fair market value instead of using the rollover.
• For an unmatured RRSP, the deceased is generally considered to have received its fair market value at death, unless the spouse or common-law partner is the sole beneficiary and all the RRSP property is transferred to a plan for the spouse by December 31 of the year after death.

A surviving spouse or common-law partner can defer tax on a refund of premiums by transferring it to their own RRSP, PRPP, SPP, RRIF or eligible annuity, within the year received or within 60 days after the end of that year. To transfer into an RRSP, the survivor must be 71 or younger at the end of the year of transfer, and older survivors can use a RRIF or annuity instead. How this fits with your election depends on the facts, so confirm it with an accountant or lawyer.

Support claims and what to do next

Separately from the election, if the deceased did not make adequate provision for the proper support of dependants, a court may order adequate support out of the estate, with or without a will. A six-month limitation period applies to that claim. The point at which that period starts is something a lawyer should confirm.

• Note the date of death and ask a lawyer promptly to confirm which deadlines apply to you.
• Get a copy of the will and a list of the assets and debts on the date of death and on the marriage date.
• Ask an accountant or lawyer to estimate the equalization amount and compare it with the will.
• Do not agree to distributions before you understand the effect of your choice.
• Speak with a lawyer before filing the election, because it affects the will.

Frequently asked questions