If you and your partner are married or in a common-law relationship, you are considered to be spouses, though this may vary depending on legislature from province to province. But what does this mean when talking about estate planning?
In this article, we’ll guide you through some estate planning tips for couples in Canada, including key legal information for married estate planning, joint wills, spousal estate management, the necessity of making a will if you’re in a common-law relationship, and the benefits of digital inheritance planning.
- Naming your spouse in your will, whether you are a married couple or common-law partners, ensures they receive what you want them to receive from your estate
- Assets that are jointly owned will continue to be managed by the surviving owner(s) even if one owner passes away
- Unless you make a joint will, each spouse needs to create their own separate will document
- Making a will protects your assets, your dependants, your legacy, and your loved ones
Introduction to Estate Planning for Spouses
When estate planning, one of the most important things to consider is what you want to leave behind, and to whom.
Jointly Owned Assets
It’s very common for spouses to jointly own things such as bank accounts, investments, or property, but you don’t have to consider these types of assets in your will because they aren’t part of your estate. If someone with joint ownership of an asset passes away, the asset remains under the ownership of the surviving member(s).
If there are no surviving owners of a jointly owned asset, it becomes solely owned and can be gifted in the will of the surviving owner.
Joint Tenancy for Property vs Tenants-in-Common
Joint tenancy means co-ownership between two or more individuals. If you and your spouse have a joint tenancy and you pass away, your spouse will become the sole owner of the property. Most spouses fall into this category, but if you’re unsure you can always check the title of your property to know for certain.
Tenants-in-Common is a bit different. Let’s say you and your spouse buy a property in a tenants-in-common agreement where you own 40%, and your spouse owns 60%. If you were to pass away, your 60% share would become part of your estate instead of going to your spouse.
If you wanted your spouse to inherit your share, you would need to add them as a beneficiary of the asset in your will.
Solely Owned Assets
Your estate is made up of all your solely owned assets and liabilities. These can be both tangible and intangible assets like real estate, vehicles, jewelry, cash, bank accounts, investments, and patents.
Your will, then, is where you decide who gets what from your estate.
How do I leave everything to my spouse?
To leave your entire estate to your spouse, all you need to do is list them as the sole beneficiary in your will.
You can also name your spouse as executor of your estate so that they are responsible for managing and administering it. This is often easier than having someone else take the role, as your spouse is generally more familiar with your assets and debts already. Especially if you’ve been together for a long time.
Naming your spouse as executor does not mean they cannot be a beneficiary, or vice versa.
Spouses are also commonly appointed as attorneys for personal care and property. If you’d like your spouse to take care of your needs if you lack capacity, or your responsibilities, such as paying bills, if you need someone to help you manage them, appointing them as your attorney can really help give you both peace of mind for the future.
Does a spouse automatically inherit everything in Canada?
In many provinces in Canada, if you pass away without a will and have a surviving married spouse and no children, your spouse inherits your entire estate.
In that case, you may ask, why make a will at all? Here are a few situations where a will can be helpful:
- You have a spouse and children but want to leave everything for your spouse
- You may or may not want to name your spouse as your executor
- You want to specify when your children inherit your estate
- You want to specify exactly what amount each family member receives from your estate
- You’d like to leave a legacy gift to a charity in addition to leave everything else to your spouse
- You want to appoint a backup guardian for your children that is not your spouse
Understanding Joint Wills and Separate Wills
Legally, a person cannot make the will of someone else, even if you are their spouse. Think of it like taxes. Even if you file taxes as a married couple, you each have your own tax returns. Likewise, usually each person needs to make their own will themselves.
The only exceptions to this are joint wills, also known as mutual wills, which allow two people to make their wills together. These types of wills are not very common because they can cause issues for estate settlement down the line and in Quebec, they aren’t legally recognized.
A joint will, or mutual will, is a single will created by two people, usually created between spouses. It is signed by both parties and can also have an irrevocable clause. This kind of clause on a joint will means that even if one spouse passes away, the surviving spouse cannot change the will or create a new one.
While Willful does not offer joint wills, it’s easy for couples to create their estate plans together with our Premium Coverage x2 plan. This plan includes two complete estate plans, including wills, power of attorney documents, and assets for your spouse and multiple loved ones at a discounted price. Each member can then make their own decisions in their documents and notify beneficiaries and executors of their roles when they are finished.
Mirror wills are another type of will commonly used among spouses in Canada. For these wills, each spouse does their own will but they essentially say the same thing. The only difference is that each person names the other as their executor and primary beneficiary. If the couple has children, each spouse names the other spouse as the guardian and usually names their children as alternate beneficiaries.
A typical will is created by one person for that same person. It allows the testator or creator of the will to make their own decision about how to distribute their estate. Wills can be updated at any time. If your relationship status changes and you want to update your beneficiaries or executors, you can do that.
How can you and your spouse make regular legal wills?
There are multiple different ways to create a will, and wills are often not one size fits all (or one size fits two).
The most common ways to make a will in Canada include will kits, handwritten wills, online will platforms, and lawyer-drafted wills. Here’s a breakdown of each type:
- Will kits are fill-in-the-blank documents that allow you to fill in key information about your estate like who you are, who your executor would be, who would be guardians for your dependents, and any beneficiaries. They’re a bit like Mad Libs, but for estate planning. If you make a will with a will kit, just remember that it isn’t legal until you've signed it, and witnesses have signed it as well, in accordance with the law.
- Handwritten wills, more commonly known as holographic wills in Canada, are wills created with only the testator, a pen, and paper. When making a holographic will you cannot use any kind of machinery like a computer, typewriter, or phone. And like most wills in Canada, holographic wills also need to be signed to be legal.
- Online will platforms An online will is a document that you create using the help of an online platform. At Willful, we help you create your customized will and estate planning documents by asking you relevant questions about your life situation. Then, once you’ve inputted all the information about your end-of-life wishes, we create your legal last will and testament. Unless you live in a province where digital wills are legal, like BC, you’ll need to print out your online will once it’s complete and sign it and have witnesses sign it as well in accordance with the law.
- Lawyer-drafted wills are wills created with the help of a lawyer. This type of will is often the most expensive, often costing you hundreds of dollars and taking a large amount of time between consulting with your lawyer, possibly commuting to the law office, and outlining all your wishes.
Create your online will today →
Legal Considerations in Estate Planning For Your Spouse
If you’re estate planning with your spouse in mind, the most important thing to keep in mind is whether you are legally married or not. If you have a common-law spouse, making sure there are spouse beneficiary arrangements in your will is essential if you want them to inherit anything.
Another aspect to consider is if you have a blended family or have remarried. If you have an existing will that documents your wishes in relation to a previous spouse, you may want to update it to reflect your new wishes and life changes.
Outside of your will, you can also name your spouse as the primary beneficiary on life insurance policies, retirement accounts, and other financial instruments. These assets will then go directly to your spouse, outside of the probate process.
Digital Assets in Estate Planning
Thousands of words long and filled with dry legal jargon, it’s no wonder so many of us skip over terms of service agreements. But an important caveat of these service agreements is the privacy agreements related to sharing your password.
In the face of estate planning, these privacy agreements mean that even if you share passwords for your digital accounts with your loved ones, they might be barred from legally accessing them by the platforms themselves.
That’s why it’s important to document your accounts on your asset list and name beneficiaries and executors in your will. By doing so, you improve your spouse’s and loved ones’ ability to handle your affairs and see to it your digital assets are protected based on your wishes.
Next Steps in Estate Planning With Your Spouse
Ready to begin your journey of protecting your spouse’s financial future and peace of mind?
The first step is to talk about your wishes together, especially if you might have differing opinions on who should be the guardian of your children.
Next, each of you can start creating your wills. Online will creation for spouses is easier than ever with Willful and best of all, you can start your documents for free!
Our Premium Coverage x2 plan allows you to add beneficiaries and invite your spouse to make their own will with just a few clicks of your mouse.
From there, we’ll guide you through making your documents and getting your estate plan in place.