The Hidden Costs of Dying Without a Will in Alberta

1. The Hidden Costs of Dying Without a Will in Alberta

2. Despite their importance, about 50% of Canadians still do not have a will. The risks and consequences of passing away without a will (dying intestate) can be substantial and significantly complicate matters for one’s family. It can also lead to outcomes that don’t align with what you would want for your loved ones. Proper estate planning provides this peace of mind. Creating a will and planning your estate are ultimately more straightforward and cost-effective to manage when done well in advance. What is Intestacy, and Why Does It Matter?

3. As we noted, dying without a will is called “intestacy” or “dying intestate.” Without a defined and directed way to manage your affairs after death, families do not have immediate control over the process. Instead, the estates of intestate individuals are subject to the rules established in Alberta’s Wills and Succession Act and Estate Administration Act. Consequently, you do not have any control over the distribution of your estate. If you do not have a spouse or child, it’s even possible for the estate to pass to distant relatives. Considering Family Dynamics

4. There are family impacts, too. Under the Wills and Succession Act (WSA), intestacy means that only your biological or formally adopted children can be beneficiaries. Stepchildren do not receive consideration, so if you want to provide for them as well, a will is a must-have. Families with disabled children can also see serious effects from intestacy. Estate planning is essential to create wills that will not adversely affect the child’s disability benefits. In intestacy, an inheritance could negatively impact those benefits and result in a loss of critical income for disabled children.

5. Dying intestate can also expose your estate to family conflict and claims. In a will, you can choose your own executor, ie, the person that you would like handling your estate after your death and ensuring a distribution to the beneficiaries. Without a will, more than one person could have priority to be your estate’s executor (or personal representative). For example, if you die without a spouse or common-law partner, your children may all have equal priority to apply for your estate. Where there is disagreement over who will act as the personal representative of the estate, a court application may be necessary. Such litigation can get quite complex and can be very harmful to the family dynamic. Even beyond these effects, resolving an estate for an intestate individual is a long, stressful, and complex process. Families will need to bear the burden of additional legal fees, increased administrative costs, and delays in the probate process. Tax outcomes may also differ significantly from those with estate planning.

6. Even beyond these effects, resolving an estate for an intestate individual is a long, stressful, and complex process. Families will need to bear the burden of additional legal fees, increased administrative costs, and delays in the probate process. Tax outcomes may also differ significantly from those with estate planning. Comparing Your Options: Draft a Will or Go Without One? Let’s compare the two options.

7. If you choose to draft a will, there are some up-front costs to consider. There are fees associated with working with lawyers to plan your estate and draft your will. However, unless you need to change your will or estate plan in the future, these can be one-time expenses that provide significant peace of mind. Consider that without a will, dying intestate means costly court applications, higher legal fees, and the likelihood that the family will spend more than what estate planning may have cost ahead of time.

8. Having a will also makes the probate process (formally called a grant of administration for intestate estates) smoother and less expensive. With a clearly defined executor and beneficiaries, it is less likely that estranged family members will need to be tracked down to serve a grant of administration application. With less time required to resolve and close the estate, the estate administration process can also become significantly simplified with a will. As a result, the final value of the estate can be higher, allowing for more opportunities to make distributions according to your wishes. Without a will, such flexibility and discretion aren’t possible.

9. Estate planning also helps ensure more deliberate and effective tax planning for your assets after your death. Contrast that outcome with that of an intestate individual covered by the WSA, which can increase tax burdens or result in the loss of benefits. Dying intestate also has intangible costs in the form of increased family strain, a bigger emotional burden, and the potential for conflict. Wills can provide a structure that helps minimize such impacts.

10. Exploring Estate Planning in Depth As we’ve seen, the hidden costs of dying intestate can be significant and wide-ranging. Estate planning today has clear benefits in terms of cost and confidence in outcomes. Life is unpredictable, and exploring more about wills and estates today can later save your family time, money, and stress. Planning for the future isn’t just for those with complex estates or a high net worth; everyone can benefit from this vital legal tool. Speak with a member of our team today to learn more about the benefits of wills and how to take the first steps.