What happens when someone dies after they have separated and before they have divorced or settled the matrimonial property issues?\u00a0 Does the death of one of the parties end the divorce proceedings?\u00a0 How is the property divided?\u00a0 What can a person going through a divorce do to ensure their soon-to-be former spouse does not receive more than what was intended? These are questions estate planners and family law lawyers are often asked. This article provides a brief overview of how an estate could be distributed if a party dies during divorce proceedings.<\/p>\n
Archie married Veronica in 1989.\u00a0 The parties separated in 2017.\u00a0 At the time of their separation, they had two adult children, Maggie (26) and Betty (24).\u00a0 Veronica commenced the divorce proceedings by filing a Statement of Claim in 2017.\u00a0\u00a0 In January of 2018, Archie updated his will. He named his brother, Jughead, as the personal representative of his estate and gave the remainder of his estate to his children, Maggie and Betty.\u00a0 Archie dies in March of 2018. As of the date of his death, Archie and Veronica do not have an agreement with regard to the division of the matrimonial property.<\/p>\n
As the personal representative of the estate, Jughead applies to the court for a grant of probate. As part of the application, he is required to serve notices on Veronica.\u00a0 The notices provide Veronica with the details of her rights and advise her she has 6 months from the date of the grant of probate being issued to make an application for a share of Archie\u2019s estate under the Matrimonial Property Act<\/em> and\/or the family maintenance and support provisions of the Wills and Succession Act<\/em>.\u00a0 After this period has lapsed, if a claim is not made by Veronica, Jughead, as the personal representative of the estate, can distribute the property in accordance with the terms of Archie\u2019s 2018 will.<\/p>\n The assets of Archie are as follows:<\/p>\n With regard to the house which is jointly owned with Veronica, the house is transferred to Veronica by right of survivorship.\u00a0 This means the asset does not form part of Archie\u2019s estate and his interest in it is extinguished upon his death.\u00a0 If the house had been owned as tenants in common with each having a 50% interest in the home, Archie\u2019s interest would have formed part of his estate.\u00a0 In order for this to have occurred prior to Archie\u2019s death, both parties would have had to agree and sign the transfer to transfer the property into tenants as common. As this was not done, Veronica receives full title to the house, despite any contrary intention Archie may have had.<\/p>\n Similarly, as Archie did not change the beneficiary designation on his life insurance policy after separating from Veronica, the life insurance is given to Veronica. The insurance funds proceeds will not be included as part of the estate or the matrimonial property claim and Veronica will receive these funds.\u00a0 If Archie did not want Veronica to receive this life insurance, he should have changed the beneficiary designation on the policy. The same is true for the RRSP and the TFSA. If Veronica is the designated beneficiary, she would receive these funds separate from the estate or the matrimonial property claim. Archie would need to have designated his desired beneficiary on these registered accounts prior to his death to ensure that his wishes would be carried out.<\/p>\n With regard to the remainder of Archie\u2019s property, Archie\u2019s death does not end the matrimonial property division. This means that, although Archie willed his estate property to his children, Veronica has the right to make a claim for a share of his estate. If she is successful, Veronica will receive the same amount from Archie\u2019s estate as she would have had Archie not died during the divorce proceedings.<\/p>\n Apart from the legal issues discussed above, the parties also need to consider the relationship between Veronica and her two children.\u00a0 With Archie\u2019s will providing the residue of his estate to his children there could be conflict between Veronica and her two children.\u00a0 If the parties are agreeable, they can resolve the matrimonial property issues outside of the Court.\u00a0 The goal of the family should be to continue to have a relationship after Archie\u2019s property has been divided and distributed.<\/p>\n In addition to the relationship, the parties need to take into consideration the costs of litigating this matter.\u00a0 If the matter were to be litigated, the Court could order that all legal costs of the party be paid from the estate.\u00a0 Since the will as it was drafted was an error of the testator, the courts may order the legal fees of the personal representative, the lawyer or lawyers representing the children and Veronica\u2019s fees, to be paid from Archie\u2019s estate. This may leave the children as the residuary beneficiaries with significantly less than they would have received if they had negotiated a settlement with Veronica.<\/p>\n The example above is only meant to provide an overview of some potential issues that may arise if a spouse dies before divorce proceedings are finalized. Moreover, this article focuses on the law in Alberta. The law in other jurisdictions may be different.\u00a0 At Miller Thomson, we have significant experience with estate planning and planning for individuals who have complicated situations. We would be pleased to navigate you through the tax, financial and other considerations and assist in planning to prevent any disputes amongst your beneficiaries.<\/p>\n","protected":false},"excerpt":{"rendered":" What happens when someone dies after they have separated and before they have divorced or settled the matrimonial property issues?\u00a0 Does the death of one of the parties end the divorce proceedings?\u00a0 How is the property divided?\u00a0 What can a person going through a divorce do to ensure their soon-to-be former spouse does not receive […]<\/p>\n","protected":false},"author":1,"featured_media":14379,"parent":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[547],"insight-format":[416],"class_list":["post-5273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client"],"acf":[],"yoast_head":"\n\n