When thinking of your estate planning goals, it is important to know that the law in Alberta does not automatically ensure that your children will receive your assets farther down the road. This is a particularly important point to ponder if you have divorced and remarried as your current spouse may have a claim against your estate for maintenance and support. If successful, such a claim will trump any designation of assets to your adult/independent children.
Matters can become especially complicated (and potentially contentious) if both you and your spouse brought children into the family from previous marriages. In short, it is extremely important to update your estate plan after divorce, remarriage and other major life events.
The Wills and Succession Act (Alberta) which was introduced in 2012, stipulates that any designation of a now divorced spouse as Executor or beneficiary to your estate is ineffective, however, that designation remains effective if you become deceased after separation but prior to divorce. For non-married spouses, the designation of the former spouse as Executor or beneficiary is ineffective after separation; however, determination of the date of separation is not always clear. To be certain that a former or separated spouse cannot act as your Executor or recieve a benefit from your estate, it is important to execute a new will as soon as possible after separation, whether you are in an married or unmarried relationship.
Reasons to update your will and other estate documents (Enduring Power of Attorney and Personal Directive) after separation or divorce include:
- Change beneficiaries on life insurance policies and retirement accounts
- Remove your ex-spouse from your estate plan
- Remove members of your ex-spouse's family from the estate plan if they were included
- Ensure that bequests reflect your current wishes
- Maximize beneficiaries' inheritance by ensuring a cost-efficient administration of the estate
- Explore options for minimizing your estate's tax liability
Heartache, confusion and wasted assets can be avoided with thoughtful estate planning. If you need to execute a will or update an existing one after divorce, then it is a good idea to consult with a family law and estate planning lawyer.
To learn more, please see Kirk Montoute LLP's Frequently Asked Questions regarding estate planning after divorce.