Dying without a will has big ramifications
Having a will that spells out how to disperse your estate should be a key part of every farm’s management plan. But a surprising number of Canadian farmers don’t have one. This leaves the fate of your farm in the hands of the province and its intestate laws.
If you don’t have a will, the fate of your farm will be left in the hands of the province and its intestate laws.
“In Saskatchewan, the Intestate Succession Act entitles your spouse to the first $100,000 of your estate, and then it’s divided up proportionately after that,” says Stephen Schuck, a lawyer with the NSWB law firm in Weyburn, Sask. “In the case of someone who is married with three children, the spouse and each child would get 25 per cent of your estate after the first $100,000 is dealt with.”
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Since the loss of her husband, Maggie Van Camp has been encouraging others to ensure their farm and personal plans are in order.
It’s more complicated if you have no spouse or children, Schuck says. In that case your estate would go to your parents. If you have no parents, it goes to your brothers and sisters, then your nephews and nieces. If you have none of these, it will be divided among next of kin.
“It just keeps going on down the line,” Schuck says. “If it gets to the point where it reaches your next of kin, your estate could be fractionalized down into very, very, very small amounts.”
The Act also decides who can apply to administer your estate. Again, your spouse will be at the top of the list followed by your children. So, if you have no spouse and your children don’t get along, there can be a conflict.
The court will want your estate dispersed in a fair and equitable manner, Schuck says. They’ll direct the administrator to take out a bond. Since many farms have millions of dollars in assets, this can easily mean thousands of dollars of extra costs.
Also keep in mind that the Family Property Act entitles your spouse to 50 per cent of the value of assets accumulated within the marriage. Your spouse or children can also claim against your estate under the Dependents Relief Act. If you happen to die in the middle of a divorce or if there’s a common-law spouse with a claim, settlement could take years.
Intestate laws can create nightmares for children intending to carry on farming. Even family members who got along can become quarrelsome when shares of millions of dollars in assets are involved.
Schuck strongly recommends you plan ahead, seek legal advice and get a will in place. Wills also need to be updated to reflect new realities. It doesn’t cost a lot of money, it ensures your wishes are carried out and it can preserve the future of the farm.