Spouse's Rights to the Estate and Equalization in Ontario

When your spouse dies, you may assume you simply receive what the will says. In Ontario, a married surviving spouse often has a choice, and the choice has a firm deadline.

This article explains the two options, how the election works, and what the estate trustee must wait for. If you and the deceased were not married, the rules are quite different, and that is covered below.

The two options

A surviving spouse must elect either to take under the will (or on intestacy) or to receive the equalization entitlement under section 5 of the Family Law Act. If the deceased's net family property was greater than yours, equalization entitles you to one-half of the difference.

If you elect equalization, the gifts to you in the will are revoked, unless the will expressly says they are in addition to the equalization entitlement. That is why you need to compare the two before filing.

The deadline and how to elect

The election is made on Form 1, Election of Surviving Spouse, and must be filed with the Estate Registrar for Ontario within six months after the spouse's death. If no election is filed in time, you are deemed to have elected to take under the will or the Succession Law Reform Act, unless the court orders otherwise on application.

Because a missed deadline can lock in the lower choice, treat the six-month date as firm and calculate it early. Getting the figures needed to compare the options, such as asset values and debts on both sides, can take time.

Tax filings run alongside the election. A final T1 return must be filed for every person who dies. If death occurs between January 1 and October 31, it is due April 30 of the following year, and if death occurs between November 1 and December 31, it is due 6 months after the death. Different dates apply if the deceased, or a spouse or common-law partner living with them, was carrying on a business.

At death, a taxpayer is deemed to have disposed of each capital property immediately before death for proceeds equal to its fair market value. That deemed disposition is deferred if the property passes to a spouse or common-law partner resident in Canada, or to a qualifying Canadian-resident trust created by the will. How this applies to your situation is worth confirming with an accountant or lawyer.

If there is no will

On an intestacy, a married spouse receives a preferential share set by regulation, which is $350,000 for deaths on or after March 1, 2021. The spouse also gets one-half of the residue if there is one child, or one-third if there is more than one. These intestacy rules do not apply if the spouses were separated at the time of death, as defined in the Succession Law Reform Act.

You still have the election in an intestacy: you can take the intestacy share or choose equalization.

What the estate trustee must wait for

The estate trustee must not distribute within six months after the spouse's death unless the surviving spouse consents in writing or the court authorizes it. Once the personal representative has notice of an application under Part I of the Family Law Act, distribution is also barred. Reasonable advances to the deceased's dependants for their support are still allowed.

Before distributing property, a legal representative must obtain a clearance certificate from the Minister, and distributing without one makes the representative personally liable for unpaid tax, up to the value of the property distributed. A certificate is not needed before each distribution as long as enough property is kept to pay any liability to the CRA.

• If you are the spouse, expect distribution to wait until the six months have passed, unless you consent in writing or the court authorizes earlier distribution.
• If you are the estate trustee, do not distribute early without written consent or a court order.
• If dependants need support in the meantime, reasonable advances are permitted.

Unmarried partners and what to do next

Equalization under Part I of the Family Law Act is available only to married spouses. A common-law partner has no share of an intestate estate. However, an unmarried partner who cohabited for at least three years, or in a relationship of some permanence and are parents of a child, can apply for dependant support if the deceased did not make adequate provision. That application must be made within six months from the grant of letters probate or administration, though the court may allow a late application for any portion still undistributed. A common-law partner can also apply to be estate trustee.

• Note the date of death and calculate the six-month deadline.
• Get a copy of the will, if there is one.
• List assets and debts for both spouses to compare net family properties.
• Ask a lawyer to compare the will gift with the equalization amount.
• File Form 1 with the Estate Registrar for Ontario before the deadline.

Frequently asked questions