CETA-1 (3rd Ed) - Chap 07 - Estate Beneficiaries

Chapter 7
Estate Beneficiaries
Learning Objectives .................................................................................................................7-4
7.1 Classes of Gifts and Beneficiaries ............................................................................7-7
7.1.1 Common Law Only: Types (Classes) of Testamentary Gifts .........................................7-7
7.1.1.1 Specific Legacies .......................................................................................7-7
7.1.1.2 Demonstrative Legacies .............................................................................7-8
7.1.1.3 General Legacies .......................................................................................7-8
7.1.1.4 Residue 7-8
7.1.2 Quebec Only: Types of Legacies (Gifts) Made by Will ..................................................7-8
7.1.3 Classes of Beneficiaries of Estates and Trusts .............................................................7-9
7.2 Definition of Spouse.................................................................................................7-10
7.2.1 Marriage, Registered Relationships and Common-law Relationships .........................7-11
7.2.1.1 Quebec Only: Spouse, Civil Union Spouse, De Facto Spouse .................7-12
7.2.2 Multiple Spouses ........................................................................................................7-12
7.3 Children and Issue ...................................................................................................7-13
7.4 Per Stirpes (by Roots) and Per Capita (By Heads) Distributions ..........................7-13
7.4.1 Per Stirpes/By Roots ................................................................................................. 7-14
7.4.2 Per Capita/By Heads ................................................................................................. 7-14
7.5 Class Gifts................................................................................................................ 7-15
7.6 Conditional and Deferred Gifts ............................................................................... 7-16
7.6.1 Common Law Only: Vested and Contingent Beneficiaries ......................................... 7-16
7.6.2 Common Law Only: Vested and Contingent Interests – Definitions ........................... 7-16
7.6.3 Common Law Only: Conditions ..................................................................................7-17
7.6.3.1 Conditions that Are Uncertain ...................................................................7-18
7.6.3.2 Conditions that Are Impossible .................................................................7-19
7.6.4 Quebec Only: Beneficiary Rights and Conditions........................................................7-19
7.6.4.1 Beneficiary “Rights” – Current and Future ................................................7-19
7.6.4.2 Suspensive and Extinctive Conditions ......................................................7-20
7.7 Survivorship Rules ...................................................................................................7-20
7.7.1 Simultaneous Deaths (Order of Death) .......................................................................7-21
7.7.1.1 Outcome #1: Youngest Survives the Older Rule.......................................7-22
7.7.1.2 Outcome #2: Each is Deemed to Survive the Other Rule .........................7-22
7.7.1.3 Quebec Only: Deceased and Beneficiary Die at the Same Time ..............7-22
7.7.2 Statutory Survivorship Rules – How Many Days Must a Beneficiary Survive? ............7-23
7.7.3 Survivorship Rules and Designations on Registered Plans and Insurance Designations
.................................................................................................................................. 7-23
7.7.4 Common Law Only: Joint Tenancies and Survivorship Rules .....................................7-24
7.7.4.1 Outcome #1: Youngest Survives the Oldest .............................................7-24
7.7.4.2 Outcome #2: Ownership is Severed .........................................................7-24
7.8 Common Law Only: When Beneficiaries Pre-decease a Testator and Gifts to
Beneficiaries Fail ..................................................................................................... 7-24
7.8.1 Gifts to More than One Person .................................................................................. 7-25
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7.8.2 Gifts that Fail ............................................................................................................. 7-25
7.8.2.1 Anti-Lapse Rules 26
7.8.2.2 Determining Contrary Intention and Anti-lapse Rules .............................. 7-27
7.8.2.3 Anti-lapse, Contrary Intention and Class Gifts ..........................................7-27
7.8.2.4 Cases on Anti-lapse and Contrary Intention .............................................7-28
7.8.3 When a Beneficiary Renounces a Gift ........................................................................7-28
7.8.3.1 Renouncing the Right to Income from a Trust ..........................................7-28
7.8.4 When there is No Beneficiary .....................................................................................7-29
7.8.4.1 When a Legacy Fails ................................................................................7-29
7.8.4.2 When a Gift of Residue Fails ....................................................................7-30
7.8.5 When the Assets are Insufficient to Pay Debts and All Legacies (“Abatement Rules”)
.................................................................................................................................. 7-30
7.8.5.1 Order of Abatement (All Provinces Except Alberta) ..................................7-30
7.8.6 Gifts that Do Not Exist at the Date of Death (“Ademption Rules”)................................7-33
7.8.6.1 A Specific Legacy is Exchanged or Replaced ......................................... 7- 33
7.8.6.2 Statutory Exceptions to Ademption – Sale by Substitute Decision-makers
................................................................................................................ 7-33
7.9 Quebec Only – Gifts that Fail ...................................................................................7-34
7.9.1 Lapse and Nullity of Legacies .....................................................................................7-34
7.9.2 Legacies to Individuals and Joint Entitlements............................................................7-34
7.9.3 Failure of Legacies and Consequences ......................................................................7-36
7.9.4 Lapse for Causes Linked to the Person or the Property ..............................................7-36
7.9.4.1 Causes Linked to the Person ...................................................................7-36
7.9.4.2 Cause Linked to Property .........................................................................7-36
7.9.5 Nullity .........................................................................................................................7-36
7.9.5.1 Nullity for Causes Linked to the Person ....................................................7-37
7.9.5.2 Cause Linked to Property .........................................................................7-37
7.9.5.3 Revocation ...............................................................................................7-37
7.9.5.4 Revocation by Testator (art. 763 CCQ) ....................................................7-37
7.9.5.5 Revocation of Gifts Made Prior to Divorce or Nullity .................................7-38
7.9.5.6 Judicial Revocation ..................................................................................7-38
7.9.6 Consequence of Lapse, Revocation, or Nullity ...........................................................7-39
7.9.7 Representation of a Pre-deceased Beneficiary ...........................................................7-39
7.9.8 Insolvent Successions ................................................................................................7-41
7.10 Issues Related to Specific Gifts ..............................................................................7-41
7.10.1 Gifts with a Charge .....................................................................................................7-41
7.10.2 Distribution of Specific Legacies .................................................................................7-42
7.11 Interest on Legacies .................................................................................................7-42
7.11.1 Common Law Only: Interest on Legacies ...................................................................7-42
7.11.2 Quebec Only: Interest on Legacies.............................................................................7-43
7.12 Returning Prior Gifts Before Calculation of Beneficiary Entitlement (Hotchpot
Clauses and Return) ................................................................................................ 7-43
7.13 Intestacy Rules ........................................................................................................ 7-44
7.13.1 Introduction – When Intestacy Rules may Apply ........................................................ 7-44
7.13.2 General Rules ........................................................................................................... 7-45
7.13.3 Rights of Common-law Spouses on Intestacy............................................................ 7-47
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7.13.3.1 Denial of Spousal Entitlement on Breakdown of the Spousal or Common-law
Relationship ............................................................................................ 7-47
7.13.3.2 Division of Intestate Estate Among Children and Issue ............................ 7-47
7.13.4 Partial Intestacy ......................................................................................................7-48
7.14 Beneficiaries Cannot Profit from their Crime .........................................................7-48
7.15 Estate Distribution Considerations .........................................................................7-48
7.15.1 Timing of Distributions ................................................................................................7-48
7.15.1.1 Considerations Before Distributing Assets ................................................7-49
7.15.1.2 Cash Versus In Kind Distributions ............................................................7-50
7.15.1.3 Release and Discharge ............................................................................7-50
7.16 Beneficiaries Who Are Mentally Incapable .............................................................7-51
7.16.1 Legal Representatives for Adults ................................................................................7-51
7.16.2 Legal Representatives for Minors ...............................................................................7-51
7.17 Distribution to Charitable Organizations (Non-persons) 52
7.18 When a Beneficiary Cannot be Found.................................................................... 7-52
7.18.1 Missing Persons ........................................................................................................ 7-52
7.18.2 Presumption of Death ................................................................................................ 7-52
7.18.3 When No Beneficiaries Can be Found ....................................................................... 7-52
Figure 7.1: Common Law Only: Gifts that Fail - Anti-lapse Rules by Jurisdiction ................... 7-54
Figure 7.2: Quebec Only: Consequences of Failed Will or Legacy by Lapse, Nullity, Revocation
........................................................................................................................... 7-57
Figure 7.3: Intestacy Legislation by Jurisdiction .....................................................................7-58
Figure 7.4: Common Law Only: Table of Consanguinity .........................................................7-59
Figure 7.5: Quebec Only: Legal Devolution – Table of Relationships .....................................7-60
Figure 7.6: All Students – Another View of Relationships, Consanguinity, and Affinity ...........7-61
Figure 7.7: British Columbia and Alberta Only: Parentelic Distribution Chart ..........................7-62
Figure 7.8: Common Law Only: Spousal Preferential Share and Division of Property Between
Spouse and Children (by Jurisdiction) .....................................................................63
Figure 7.9: Intestacy Rules Where there is No Spouse or Issue (by Jurisdiction) .................. 7-67
Figure 7.10: Definition of Spouse and Common-Law Spouse for Purposes of Intestate
Succession (by Jurisdiction) ................................................................................ 7-69
Figure 7.11: When a Spouse is Not Entitled on an Intestacy ................................................. 7-72
Figure 7.12: Manitoba and Ontario Only: Distributions on Intestacy to Issue – Special Rules
........................................................................................................................... 7-74
Figure 7.13: Legislation Governing Missing Persons and Presumption of Death by Jurisdiction
........................................................................................................................... 7-76
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Chapter 7
Learning Objectives
A will identifies the beneficiaries of a testator’s estate and what each will take. However,
interpretation issues can arise, and unanticipated scenarios may occur. Legislation and
case law attempt to deal with these situations. This Chapter begins with a review of
terminology relevant to determining who may be a beneficiary in certain situations. It
then reviews a number of rules dealing with situations where a beneficiary pre-
deceases or refuses a gift, where there may not be a beneficiary, and when a specific
gift no longer exists or the assets are insufficient to pay all debts and gifts. It then
reviews the intestacy rules (distribution when there is no will). The Chapter concludes
with a review of issues and considerations that can arise when distributing the estate.
Upon completion of this Chapter, students will be able to:
• Recognize when a person may be a spouse for purposes of administering an
estate
• Define and distinguish the different categories of gifts in a will
• Define “class gift”
• Define and provide an example of the following terms:
o Common Law Only:
▪ “per stirpes”
▪ “per capita”
▪ “vested” interests
▪ “contingent” interests
▪ “condition precedent”
▪ “condition subsequent”
o Quebec Only:
▪ “by roots”
▪ “by heads”
▪ beneficiary rights
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▪ suspensive condition
▪ extinctive condition
• Explain the rules that apply when a beneficiary named in a will pre-deceases the
testator
• Summarize the statutory “survivorship” rules that apply in the student’s
jurisdiction
• Summarize the rules that may apply if a beneficiary renounces a gift
• Summarize the rules that may apply when there are no beneficiaries to take a gift
in a will
• Summarize the rules that apply if a gift does not exist:
o Common Law Only: The “ademption rules”
o Quebec Only: The rules applying to “lapse”, “nullity”, or “revocation” of a
legacy
• Summarize the rules that apply if the assets of the estate are not sufficient to pay
all debts and legacies
o Common Law Only: The “abatement” rules
o Quebec Only: “Insolvent succession”
• Identify factors that may be relevant in determining whether an estate is
responsible for paying a debt owed by the deceased when the debt has been
secured by a charge registered against a gift that is a legacy
• Explain the purpose of a clause that requires a gift made before death to be
deducted from a gift under the will, and provide an example
o Common Law Only: A “hotchpot clause”
o Quebec Only: A “return” of gifts and legacies
• Common Law Only: Identify factors that will be relevant when determining if a
legacy to two or more beneficiaries will be owned as joint tenants or tenants in
common
• Summarize the rules for distributing the estate of a person who dies intestate
(without a will)
• Summarize the steps and considerations for transfer or delivery of assets to
beneficiaries
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o Common Law Only: Identify circumstances or reasons where an “in kind”

distribution of residue may be appropriate
• Summarize the rules that apply when a distribution under a will or on intestacy is
payable to a minor
• Summarize the rules that apply when a distribution under a will or on intestacy is
payable to a beneficiary who is incapable of managing his or her financial affairs
• Identify the requirements when making a distribution to a charity or other entity
• Identify the rules for dealing with a missing beneficiary
• State the rules that will apply if no beneficiaries of an estate can be located
• Demonstrate learning by applying the rules and concepts to a given scenario
REMINDER: Terminology varies significantly between provinces, and even more

so with Quebec. For ease of reading, as terminology is defined one word or phrase is
selected for purposes of the materials in this course. Jurisdiction-specific
terminology is only used if required. See the Generic Terms Cheat Sheet for the full
list of generic terminology.
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7.1 CLASSES OF GIFTS AND BENEFICIARIES

7.1.1 Common Law Only: Types (Classes) of Testamentary Gifts
Historically gifts in a will (testamentary gifts) were categorized by their form or nature.
“Devises” referred to gifts of real property, such as land; “bequests” were gifts of tangible
personal property, such as a set of antique books or a car; and “legacies” referred to gifts of
money or other intangible property, such as stocks and bonds. These terms are still used but their
meanings are used more interchangeably.
The term “legacy” is used in this course to refer to all gifts under a will that are not gifts of
residue. Where required, the nature of the legacy is addressed more specifically. The distinction
between different types of legacies is particularly important when dealing with the abatement
rules discussed later in this Chapter (see 7.8.5 When the Assets are Insufficient to Pay Debts and
All Legacies (“Abatement Rules”)). These rules determine what assets will be used to pay the
testator’s debts and administration expenses when there is no residue remaining or available to
cover these liabilities. The type or class of gift can be relevant for other rules as well.
“Residue” is used to refer to the collection of assets and cash remaining after payment of all
debts, estate expenses, and legacies. Assets and cash that make up the residue may be delivered
or paid directly to the beneficiary(ies), or they may be held in a testamentary trust.
Some wills provide that an asset such as a home, or an amount of money, should be set aside and
held in trust. It is important to note that while these trusts are testamentary trusts, they are not
trusts of residue. They will be treated as a legacy for purposes of the various rules that may need
to be applied.
For the purposes of certain rules, and in particular the rules discussed later in this Chapter (see
7.8.5 When the Assets are Insufficient to Pay Debts and All Legacies (“Abatement Rules”)),
there are three categories of legacies: specific, demonstrative, and general. Each is defined
below.
7.1.1.1 Specific Legacies

Specific gifts are gifts in a will that are described in sufficient detail to determine the
specific item that the testator intended to give the beneficiary. Some examples include:
• Deliver “the red Porsche with VIN number 1234” to my nephew Zach.
• Pay the money held in my City First Credit Union account #6789 to my niece
Zoe.
If the Porsche is not owned on death or the bank account has been closed, the gift is said
to “adeem” and the beneficiary receives nothing. (See 7.8.6 Gifts that Do Not Exist at the
Date of Death (Ademption Rules).)
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7.1.1.2 Demonstrative Legacies

Demonstrative gifts are gifts of money that the testator intended to be paid out of a
designated fund. If the designated fund no longer exists or has been diminished to a point
where it cannot satisfy the amount of the gift, then the gift can be paid from other assets
in the estate.
Example:
A will directs the executor to pay $5000 from the deceased’s LN&G Bank account #30-
4325 to a named beneficiary. If the account only has $3000 at the date of death, $3000 is
paid from the bank account as a demonstrative legacy. The balance of $2000 will be
considered a general legacy for purposes of the abatement rules.
7.1.1.3 General Legacies

General legacies are legacies that do not describe the specific asset or property that
should be used to fund the legacy. General legacies are usually specific monetary
amounts, sometimes referred to as “pecuniary legacies” or “cash legacies”.
Example:
A will directs the executor to “pay $10,000 to Sarah if she survives me.” The gift does
not refer to a source of funds for the payment. Therefore, it may be taken from any of the
property of the estate, including cash on hand or the proceeds of assets sold during the
administration of the estate.
7.1.1.4 Residue
A residuary gift is a gift of the residue or residuary property of the estate. The residue is
made up of the assets and cash that remain after the payment of debts, taxes,
administration expenses, and all legacies.
7.1.2 Quebec Only: Types of Legacies (Gifts) Made by Will

The CCQ recognizes three types of gifts or “legacies” made by will. They are universal legacies,
legacies by general title, and legacies by particular title (art. 731 CCQ).
A universal legacy entitles one or more persons to take the entire succession (art. 732 CCQ).
A legacy by general title entitles one or more persons to take:
• a specified share of the succession,
• a dismemberment of the right of ownership of the whole or a specified share of
the succession, or
• the ownership or a dismemberment of the right of ownership of the whole or of an
aliquot share of all the immovable or movable property, private property,
community property or acquests, or corporeal or incorporeal property (art. 733
CCQ).
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A legacy that is neither a universal legacy nor a legacy by general title is a particular legacy (art.
734 CCQ).
Examples follow:
• Particular legacy: a gift of specific land, assets or an amount of money.
• A legacy by general title: I give all my movables to X and all my immovables
to Y; or I give 25% of all my movable property to A.
• A universal legacy is a general gift of all property: I give all my property to
B.
Note: In common law jurisdictions, a universal legacy or legacy by general title is
referred to as a “gift of residue” since it refers to all of the property that remains after
the debts, expenses, and particular legacies are paid. For purposes of this course, the
term “residue” will be used when referring to the remainder of an estate or trust unless
the context requires a distinction between a legacy of general title and universal legacy.
7.1.3 Classes of Beneficiaries of Estates and Trusts

The terminology used to describe the beneficiaries of an estate generally follow the nature of the
gift. The following terminology is used in this course to describe beneficiaries of estates.
Students are referred to the definitions and terminology for beneficiaries of trusts whether
created within a will or an inter vivos trust (see Chapter 2, Trustees, Personal Representatives,
and Substitute Decision-makers):
Common Law Only:
Intestate beneficiary: A person entitled to receive a share of the estate according to the
jurisdiction’s intestacy laws. (See 7.13 Intestacy Rules.)
Legatee: A legatee is one who is entitled to receive a legacy under the will. The term does
not distinguish whether the legacy is specific, demonstrative, or general.
Residual beneficiary: A residual beneficiary is one is who entitled to receive the residue
of the estate. The term is generally used when the beneficiary takes the residue outright
and there is no trust. It is sometimes used to describe the beneficiary of a trust when the
trust comes to an end. See also “capital beneficiary”.
Quebec Only:
Heir: A universal legatee or a legatee by general title who has accepted the succession
(art. 738 CCQ).
Legatee by particular title: A person who has accepted a legacy by particular title (e.g. a
legacy of a specific item or sum of money). A legatee by particular title is not an heir (see
arts. 739-742 CCQ).
Residual beneficiary: Is not a term defined in the CCQ. It is used colloquially to describe
a beneficiary who takes the remainder of an estate. The term will be used in this course
unless the context requires a more specific terminology.
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Successor: An heir who has not yet exercised his or her option to accept or renounce the
succession.
7.2 DEFINITION OF SPOUSE

The definition of spouse requires careful attention in the administration of an estate. For
example:
• Common Law Only:
o An eligible “spouse” has rights on an intestacy.
o An eligible “spouse” has rights on death to apply to vary the terms of a will and,
in some jurisdictions, may have rights to apply to vary the entitlement on an
intestacy
• Alberta Only: In Alberta, a common-law spouse is referred to as an “adult
interdependent partner” (AIP). See Adult Interdependent Relationships Act.1 In addition
to the required three-year cohabitation period, AIPs must be in a relationship of
interdependence with each other. This requires that they share one another’s lives, are
emotionally committed to one another and function as an economic and domestic unit.
Furthermore, an unmarried couple, who do not meet the cohabitation requirement, or do
not have a child together, may qualify as AIPs if they enter into an adult interdependent
partner agreement.
• Nova Scotia Only: Common-law couples who are cohabiting or intend to cohabit in a
conjugal relationship may register as domestic partners under the Vital Statistics Act. If
the relationship has been registered the surviving spouse has the same rights and
obligations as married persons on death.2
• Quebec Only:
o A marriage or civil union relationship dissolves on death and there will be a
partition of the family patrimony before the estate is distributed.
o A surviving spouse may require a preferential allotment regarding the family
residence (art. 856 CCQ).
• A spouse may be entitled to survivor benefits from pension or insurance plans.
• If a spousal relationship has ended, certain entitlements from the estate of the former
spouse may also end.
The definition and rules for who qualifies as a spouse in each of the above situations can vary
both within a jurisdiction for purposes of different legislation, and between jurisdictions.
1
S.A. 2002, c. A-4.5.
2
R.S.N.S. 1989, c. 494, s. 54 lists the entitlements that follow upon registration.
http://nslegislature.ca/legc/statutes/vital%20statistics.pdf
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Although the definitions in federal legislation such as the Income Tax Act and for Canadian
pension rules apply across the country, they too can vary depending on the applicable legislation.
Study Note: The definitions of “spouse”, “common-law spouse/partner” and other
relationships are found in federal, provincial and territorial legislation. These
definitions will be introduced throughout this course and future courses. Students
are responsible for the definitions in applicable federal legislation, such as the
Income Tax Act, and for federal pension entitlements where the definitions are
included in the study materials. Students are also responsible for the definitions
found in their jurisdiction’s legislation, and noted in the study materials, for the
various rules discussed in this course.
The definition of spouse and the entitlement of common-law spouses on an intestacy are
reviewed below (see 7.13.3 Rights of Common-law Spouses on Intestacy).
The rights of a spouse (whether married, registered under provincial law or satisfying the
applicable definition for a common-law spouse) to vary the terms of a will or a distribution on an
intestacy and/or to division of family property are addressed in Advanced Topics in Estate and
Trust Administration (CETA 2).3
Students are referred to the Student Resource Area for a summary of the common-law spouse
rules covered in CETA 1 and CETA 2.
Spousal rights for tax purposes are identified in the next chapter (see Chapter 8 Personal Tax
Returns Due on Death), and are addressed in more detail in Estate and Trust Taxation (CETA
3).4
7.2.1 Marriage, Registered Relationships and Common-law Relationships

When two people are legally married, they are recognized as spouses. And, if they are divorced
or have a legal separation, the relationship is clearly terminated. However, Canadian society and
its legal institutions also recognize common-law relationships where a formal marriage has not
taken place, including same-sex relationships.
Federal and provincial legislation provides criteria for establishing when a common-law
relationship will be recognized for purposes of the applicable statute. Often the rules require two
years of co-habitation. However, the period can be as short as one year, or as long as three years.
Sometimes a shorter period applies if there is a child from the relationship. Some jurisdictions
require the relationship to be registered. Some statutes provide guidance on what constitutes
termination of the relationship. Others do not.
3
This is the second course in the Certificate to Estate and Trust Administration program. Hereafter referred to as
CETA 2.
4
This is the third course in the Certificate to Estate and Trust Administration program. Hereafter referred to as
CETA 3.
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For purpose of this course, the term “spouse” refers to one who is married, has registered the
relationship as required under provincial law or has lived with someone in a common-law
relationship that meets the definition required to have spousal rights under the relevant
legislation. The terms “common-law partner” or “common-law spouse” refers to those couples
whose relationship meets the specified criteria and is recognized under the Income Tax Act or
other federal legislation. It will also be used if applicable provincial legislation has special rules
only applicable to common-law spouses.
7.2.1.1 Quebec Only: Spouse, Civil Union Spouse, De Facto Spouse

In Quebec civil law, rights between a couple only arise if there is a marriage or civil
union (arts. 521.1 & ff. CCQ), civil unions and marriages are both dissolved on the death
of one of the spouses. If a dissolution occurs, it is necessary to partition the family
patrimony (arts. 416-426 CCQ) and the matrimonial regime (arts. 465-484 CCQ), as the
case may be. For purposes of this course individuals in either relationship will be referred
to as a spouse.
De facto spouses (those who are not married or in a civil union) have no rights on an
intestacy nor claims for alimentary support, for partition of the family patrimony or for
preferential allotment of the family residence. However, de facto spouses may have
claims under certain provincial legislation, such as the Quebec Pension Plan.5 For
purposes of this course, the generic term common-law spouse or common-law partner
will be used to refer to a de facto spouse who meets the relevant requirements for certain
legislation, such as the Income Tax Act, unless the text refers to Quebec law only or
requires a distinction.
7.2.2 Multiple Spouses

Given the many definitions of “spouse” in Canadian law, it is now possible for a person to die
with more than one spouse for purposes of an estate administration, including the applicable
income tax rules. This can raise a variety of situations that an executor may need to address.
Examples of the scenarios that can arise include:
• Marriage followed by common-law relationship: Daniel marries Rachel. Ten years
later they separate but do not divorce. Daniel enters a relationship with Chloe. Their
relationship satisfies the test for a common-law relationship for purposes of many laws in
their jurisdiction. Daniel dies five years later without a will. The rights of separated
spouses (Daniel and Rachel) and common-law spouses (Daniel and Chloe) are
determined by the laws of each province or territory. For federal income tax purposes,
both Rachel and Chloe are considered spouses.
5
For a brief discussion on the laws affecting de facto spouses, see the Government of Quebec Ministry of Justice
website at http://www.justice.gouv.qc.ca/english/publications/generale/union-a.htm. The commentary notes that
certain laws, such as laws governing employment (social) assistance, legal aid, income tax, the Québec Pension
Plan and workers' compensation, treat de facto spouses of the same or opposite sex as a couple.
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• Common-law relationship ends and another begins: Jade and Ethan have been in a
four-year relationship that qualifies as a common-law relationship. Jade prepares a will
that leaves everything to Ethan. They separate two years later and Jade enters a
relationship with Kyle. Jade and Kyle have a child together in the first year of their
relationship. Jade dies in an accident six months later. Because there is a will and no
official termination of the relationship with Ethan, Ethan may be entitled to the gift under
the will. However, as a common-law spouse, Kyle may also have rights, depending on the
jurisdiction.
Some jurisdictions may address these situations in the legislation. Some are silent.
7.3 CHILDREN AND ISSUE

Generally, when a testator uses the word “child” or “children”, the testator is assumed to be
using the plain meaning of the word – a child is the first level of the testator’s descendants.
However, wills may also refer to the testator’s “issue”. A reference to the testator’s “issue” refers
to all of the testator’s direct (or lineal) descendants.
Example:
Grace has three children, Alex, Spencer, and Nicole. Nicole has two children, Jordan and Emily.
Grace’s issue are her three children and her two grandchildren.
Quebec Only: There is still some ambiguity under Quebec law as to whether the unqualified use
of “child” or “children” as opposed to using “child” or “children in the first degree” is to be
interpreted as meaning all the direct descendants. When applicable, administrators should seek
legal advice when determining the distribution.
7.4 PER STIRPES (BY ROOTS) AND PER CAPITA (BY HEADS)
DISTRIBUTIONS
When a testator wants to give assets to his or her lineal descendants, there are two ways to set it
out in the will. The first is to name each beneficiary. The second is to provide for a general rule
for how to determine who takes and what share the beneficiary takes. The short-hand way to
describe these rules is to say the assets are distributed per stirpes (in Quebec: “by roots”) or per
capita (in Quebec: “by heads”) among a deceased person’s lineal descendants.
The sections that follow provide brief definitions and examples to illustrate how a “per
stirpes/by roots” or “per capita/by heads” approach to a distribution applies. Although the rules
appear simple to apply, interpretation issues can arise and it may become necessary to seek legal
advice.
Peter’s family is used to illustrate how the two distributions will apply depending on the facts.
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Peter
Jeff Sherry Shawn
Aaron Olivia Hanna Nicole
Alex Ben Ryan
7.4.1 Per Stirpes/By Roots

A division that is “per stirpes” or “by roots” divides a gift or fund among the deceased’s lineal
descendants (sometimes referred to in common law as “issue”) by “stocks” or by roots. It is also
sometimes described as a division “by representation.”
Quebec Only: “Representation” is described as a “favour granted by law” (see arts. 660-665
CCQ) and takes place in both the direct (art. 658 CCQ) and collateral (art. 659 CCQ) lines, by
roots.
A per stirpes distribution requires the share of a pre-deceased beneficiary to be distributed
among the beneficiary’s surviving descendants of the next degree. Children are descendants of
the first degree, grandchildren are descendants of the second degree and so on. (Quebec: see arts.
655-659 CCQ).
If Peter leaves his estate to his issue per stirpes, or “by roots”, a number of scenarios may arise:
• If Jeff pre-deceases Peter, Jeff’s three children share Jeff’s 1/3. They will receive 1/9
each. Alex receives nothing. Sherry and Shawn each receive 1/3. Sherry’s issue (Nicole,
Ben and Ryan) receive nothing.
• If Sherry pre-deceased Peter, her daughter Nicole takes her 1/3 share.
• If Shawn pre-deceased Peter, the estate is divided equally between Jeff and Sherry. They
each take 1/2. If Jeff also pre-deceased, his three children share his 50% and receive 1/6
each.
• If Sherry and Nicole had pre-deceased Peter, then Jeff and Shawn each take 1/3, and the
remaining 1/3 is divided between Ben and Ryan.
7.4.2 Per Capita/By Heads

A distribution that is per capita or “by heads” divides the fund to be distributed equally among
the individuals within the class or group identified in the will. Unlike a per stirpes (by roots)
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division, in a per capita (by heads) division the division takes place in equal shares among all the
persons entitled without regard to their degree of relationship.
Returning to Peter’s estate:
• If Peter left a gift to his grandchildren in equal shares per capita (by heads), then each of
the four grandchildren (Aaron, Olivia, Hanna and Nicole) would receive an equal share
(1/4 or 25%).
• If Peter left a gift to his issue (lineal descendants) in equal shares per capita then each of
his children, grandchildren, and great-grandchildren who survived him would receive an
equal share (1/10 or 10%) of the estate.
A note on terminology. For purposes of this course the following terms will be used:
• “issue” refers to all lineal descendants,
• “per stirpes” refers to gifts to “issue” or “by roots”, although the terms may be used
interchangeably, and
• “per capita” refers to gifts “by heads” or an equal gift to each member of a class, although
the terms may be used interchangeably.
7.5 CLASS GIFTS

Another way to describe beneficiaries in a will or trust is to identify a “class” of beneficiaries as
the beneficiaries of a trust fund or who will share in a distribution. An example of a class gift is a
gift to children, to grandchildren, to siblings, to nieces and nephews, or to any other identifiable
group of people. Sometimes, a will or trust identifies the class of beneficiaries but then identifies
the members of the class by name. If the class cannot be determined, the gift may fail.6
When the class member names are not provided, and no other qualifiers are included in the will
or trust document to help define who may be included or excluded from the class, the executor or
trustee will need to determine who is included in the class. Examples of scenarios that can arise
include:
Class members are identified – delay in distribution: Liam’s will instructs the
executor to hold the residue on trust for his wife. On his wife’s death, Liam’s will
instructs the trustee to “divide the residue among my grandsons, Josh, Alex, and Harry”.
The will does not indicate whether future grandchildren should be included. If at Liam’s
date of death, or when his wife dies, there is a fourth grandson or a granddaughter, the
question will arise – should the fourth grandchild be included? Does the fact that Liam
named the three grandsons influence the outcome?
Class members are not identified – delay in distribution: Liam’s will said to divide the
residue on his wife’s death among Liam’s grandchildren. The will does not name the
6
It is beyond the scope of this course to consider the law that may apply in order to save a gift. These rules are
addressed in CETA 2.
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grandchildren or indicate when the class of grandchildren should be determined. At the

time of Liam’s death he had three grandsons. However, after his death and before his
wife died, two more grandchildren were born. Are they included?
There are a number of legal rules to guide the executor or trustee when questions such as these
arise. Factors that may be relevant include:
• who was alive at the date of death of the testator,
• the date an inter vivos trust was established, and
• the date of death of a life tenant.
It may also be necessary to look at case law for guidance on how to interpret words or phrases
used in the document. The legal rules applied to resolve questions about class gifts are reviewed
in CETA 2.
7.6 CONDITIONAL AND DEFERRED GIFTS

When a gift is not immediately payable, questions may arise as to who will be the
beneficiary(ies) when it is time to distribute. The answers affect a range of administration
decisions and practices. The common law “vesting” rules, and the Quebec rules on conditions are
reviewed below.
7.6.1 Common Law Only: Vested and Contingent Beneficiaries

Trustees of testamentary and inter vivos trusts often need to determine if a beneficiary has a
vested or contingent interest. A vested interest may be “vested indefeasibly” or “vested subject to
divestment”. These terms are used to describe how permanent or certain a beneficiary’s interest
is. This permanency may affect the rights of a beneficiary and may be relevant when an executor
or trustee is seeking approval to the accounts or deciding who is entitled to receive trust
information.
Related terms are “condition precedent” and “condition subsequent”. Conditions determine when
or if a beneficiary will take and assist to determine whether an interest is vested or contingent.
7.6.2 Common Law Only: Vested and Contingent Interests – Definitions

A beneficiary’s interest in a trust will be vested absolutely, vested subject to divestment, or
contingent.
A beneficiary’s interest is vested absolutely when the beneficiary’s claim on the trust property
does not depend on some future event (or contingency) that may or may not occur.
If a beneficiary’s interest in a trust is vested subject to divestment, the beneficiary’s entitlement
may come to an end on the occurrence of a condition that stops or terminates the interest. For
example, a beneficiary’s interest could end when the beneficiary turns a certain age or meets
some other criteria. It could also end if the beneficiary dies before the event that would have
triggered the entitlement.
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Vested interests can be further subdivided depending on when the interest arises. If a
beneficiary’s interest is immediate, the beneficiary is said to be “vested in possession”. If the
interest is postponed to a future date, the beneficiary is said to be “vested in interest”.
A beneficiary who has a contingent interest is a beneficiary who will only take if a condition or
event occurs. For example, the gift may require the beneficiary reach a certain age or satisfy
another condition. Or it may depend on certain other events occurring, such as the death of a
beneficiary who was vested subject to divestment.
Example:
• Brody creates a testamentary trust for his son Ben.
• The trustee is directed to pay Ben the net income for Ben’s life.
• On Ben’s death the trust is to be distributed to Ben’s daughter, Cathy.
Without further directions in the will or trust:
• Ben is entitled to receive the income earned by the trust so he is “vested in possession” of
the income earned by the trust while he is alive.
• Cathy is “vested in interest” in the capital or residue of the trust on Ben’s death. She will
receive the residue, but her interest is postponed until Ben’s death.
• Cathy is also “vested absolutely (or indefeasibly)”. If she dies before Ben, the capital will
be paid to her estate because there is no gift over.
If the trust terms stated that if Cathy pre-deceased Ben, Cathy’s entitlement should be paid
equally among her children who survive her, then Cathy’s interest is “vested subject to
divestment”. She will only receive the trust proceeds is she survives Ben. Her children have a
“contingent interest”. In order to take, Cathy must pre-decease and her child must also be alive.
7.6.3 Common Law Only: Conditions

There are two types of conditions that may determine whether an interest is vested or contingent
– gifts that are subject to a condition precedent (something that must happen before the rights
come into force) and gifts that are subject to a condition subsequent (something that will
terminate an entitlement). The following example illustrates how each of these conditions may
be applied.
Example:
• Lily’s will says that her daughter Bria is to receive the income from the testamentary
trust established in Lily’s will until Bria turns age fifty. At the time of Lily’s death, Bria
was forty-five.
• When Bria turns fifty the capital is to continue to be held in trust for Lily’s
granddaughter, Charlotte (Bria’s daughter), who will be age eighteen at that time.
• The income earned after Bria turns fifty is to be paid to Charlotte for life.
• If Charlotte obtains a university degree before she has reached the age of thirty, she is
entitled to the capital at the age of thirty.
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• If Charlotte dies before Bria or does not receive the capital at the age of thirty, the
capital is to be paid to a local community foundation upon Charlotte’s death.
Outcome:
• Bria has a “vested interest in possession of the trust income”. Her interest is “subject to
divestment” since the interest ends when the “condition subsequent”, turning age fifty,
occurs.
• Charlotte, on the other hand, has a “vested interest in the income” that is postponed. Her
interest only begins when Bria turns fifty.
• Charlotte also has a “contingent interest” in the capital. Her interest is subject to the
“condition precedent” that she earn a university degree by the age of thirty.
• The community foundation is also a “contingent beneficiary” as it will only take if
Charlotte does not take the capital at age thirty.
• However, if Charlotte fails to receive the capital at the age of thirty, the community
foundation will have a “vested interest in the capital that is postponed” until Charlotte’s
death.
7.6.3.1 Conditions that Are Uncertain

When a condition is uncertain questions will arise as to who should take the beneficial
interest in capital or income as applicable.7 The case law has established the following
general rules:
• If the condition is a condition precedent, then the gift that depends on the
condition fails. In Charlotte’s example (see 7.6.3 Common Law Only:
Conditions), if the requirement to obtain a university degree was too uncertain for
some reason, the gift of capital fails. The trust will continue and Charlotte will
receive the income for life.
• If the condition is a condition subsequent, the condition is struck out and does not
apply. In Bria’s situation (see 7.6.3 Common Law Only: Conditions), the
attainment of a certain age is certain. However, if the condition that would
terminate her interest was uncertain, then her interest in the income may
continue.8
The foregoing rules are also subject to case law governing conditions that are contrary to
public policy. These rules are addressed in CETA 2.
7
For further discussion on conditions that are uncertain, see Feeney beginning at para 16.47.
8
This outcome would raise further questions about who is entitled to capital on Bria’s death (see in the example in
7.6.3 Common Law Only: Conditions).
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7.6.3.2 Conditions that Are Impossible

Sometimes a condition may be impossible to fulfill. Again, case law has established some
rules to guide the interpretation in order to determine who is entitled to the capital or
income as applicable.9 The general rules are:
• If a gift of real property is made subject to a condition precedent that cannot be
fulfilled, the gift is void.
• If a gift of real property is made subject to a condition subsequent that cannot be
fulfilled, the gift may be saved.
• If a testator makes a gift of personal property that is subject to a condition
precedent, the gift takes effect free of the condition if:
▪ the condition cannot possibly be fulfilled and the testator knew this, or
▪ the condition became impossible because of an action taken by the
testator.
If the reason for the condition being impossible was unknown to the testator, or as a
result of a change in law or another act not attributable to the testator, then the gift is
void.
Study Note: The foregoing examples are offered in order to provide a general
understanding of the concepts related to vesting, contingent gifts, and conditions. While
students are responsible for these basic definitions, it is important to note that the law in
this area can be quite complex. It is dealt with in the STEP Diploma course, Law of
Trusts.10
7.6.4 Quebec Only: Beneficiary Rights and Conditions
7.6.4.1 Beneficiary “Rights” – Current and Future

In Quebec civil law the term “right” is used to describe a trust beneficiary’s “interest” in
a trust. A beneficiary’s right to any kind of benefit under the trust is determined by the
constituting act (art. 1284 CCQ). For example, a beneficiary may have a current right to
payment of income, or a future right to payment of capital at a determinable date (e.g. a
date that is specified or defined to be on the happening of a specific event).
A future beneficiary’s right may also be conditional on an event. If the condition does not
occur, the right does not open (e.g. it lapses) (see art. 1280 CCQ).
A future beneficiary must also have the qualities required to inherit or receive by gift at
the time his or her right opens (see arts. 1279, 617-624 and 1813-1815 CCQ).
9
For further discussion on conditions that are uncertain, see Feeney at paras 16.43-46.
10
For further discussion on vested and contingent gifts, see Feeney at chapter 17.
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7.6.4.2 Suspensive and Extinctive Conditions

A will may provide for a suspensive condition prior to distribution to a legatee, even in
the absence of a trust. If the legatee dies before the fulfilment of the suspensive condition,
the legacy lapses (art. 750 CCQ).
If a legacy is with a term, and the beneficiary does not take, the balance will form part of
the beneficiary’s estate.
“I give $100,000 to Pierre on the following conditions: I give 10% ($10,000) of Pierre’s
share to Pierre immediately and the balance to be delivered to him when he attains
twenty-eight years of age”. In this scenario, if Pierre dies at age twenty-five, the balance
will form part of his estate since Pierre had an acquired right to the legacy which is
transmissible to his heirs (see art. 747 CCQ).
The rules for legacies are adopted from the rules regarding conditional obligations and
obligations with a term, found at articles 1497 to 1517 CCQ.
An obligation is conditional if it depends upon a future and uncertain event, either
suspending the obligation until the event occurs (or is certain to not occur), or by
extinguishing the obligation when the event occurs (or is certain to not occur) (art. 1497
CCQ).
An obligation with a suspensive term is an existing obligation, the performance of which
can only be required when the future and certain event occurs (or normally should have
occurred) (arts. 1508 and 1510 CCQ). An obligation with an extinctive term has a fixed
duration and is extinguished by operation of law at the expiry of the term (art. 1517
CCQ).
The following scenario sets out an example of both a suspensive condition and an
extinctive condition:
Example:
A will provides that Pierre is to receive $25,000 if he reaches age thirty. This is a
suspensive condition. If he dies at age twenty-eight, he does not receive the gift – the
obligation cannot be enforced.
If the will goes on to say “if Pierre dies before he reaches age thirty, pay $25,000 to his
wife Marie”, then Marie’s interest is subject to an extinctive condition – it is subject to a
term (the date that Pierre turns age thirty). Her rights are extinguished if Pierre reaches
age thirty. If he dies before age thirty, she will receive the legacy.
7.7 SURVIVORSHIP RULES

From time to time an executor may need to determine who died first – the deceased testator or
intestate person, or a beneficiary. If two or more people are in a common accident, or die within
a short time of each other, the order of death can significantly affect the distribution of property
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whether there is a will or one or more of the persons dies intestate. If a will includes a
survivorship clause it requires that a beneficiary must survive the deceased by a specified
number of days in order to take their interest. A survivorship clause may also deal with situations
where it is uncertain who died first.
Advantages of a survivorship clause include:
• If a couple is in a second relationship, and the will provides for a gift over to the spouse’s
own children or other family members, the will can take effect as if the other spouse pre-
deceased.
• Common Law Only: Where one person is a major beneficiary of the estate, the assets
do not need to be subject to probate fees twice. This is particularly relevant if a couple
has prepared mirror wills (see Chapter 3 at 3.6.1.1 Mirror (Reciprocal) Wills).
A typical survivorship clause will require the beneficiary to survive for thirty days. Longer or
shorter periods may be used. Some jurisdictions have introduced survivorship legislation. (See
7.7.2 Statutory Survivorship Rules.)
7.7.1 Simultaneous Deaths (Order of Death)

Legislation in each jurisdiction sets out the default rules for situations where two people die at
the same time or in circumstances that make it uncertain who survived the other.11
Consider the following scenario:
• Andrew and Caroline are married.
• Andrew is forty-five. Caroline is forty-two.
• They have no children.
• They each have assets in their own name.
• They each have a will that leaves the assets in their respective estates to the other.
• Andrew’s will says that if Caroline pre-deceases, Andrew’s estate should be distributed
to his siblings.
• Caroline’s will says that if Andrew pre-deceases her, Caroline’s estate should be
distributed to her mother.
• Andrew and Caroline died in a plane crash and it is not possible to determine who died
first.
There are two possible outcomes depending on the jurisdiction.
11
Note: If it is possible to determine who died first these rules do not apply. For example where the order of death
cannot easily be determined, forensic evidence may be used to obtain a declaration as to which of two persons
died first. In Adare v. Fairplay [1956] O.R. 188, [1955] O.W.N. 950 (C.A.) a husband and wife died in their home
of carbon monoxide poisoning caused by a broken gas main in front of their home. It was found that the husband
died first based on autopsies establishing the onset of rigor mortis. The statutory presumption did not apply since
the order of death could be ascertained on the evidence.
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7.7.1.1 Outcome #1: Youngest Survives the Older Rule

Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest
Territories, and Nunavut:12
In these jurisdictions, if two people die and it is not possible to determine who died first,
the youngest person is deemed to survive the older person. Therefore, unless Andrew’s
will included a survivorship clause dealing with this possibility, Caroline is deemed to
survive. As a result:
• Andrew’s estate is probated and the net estate is paid to Caroline’s estate.
• Caroline’s estate (including the assets from Andrew’s estate) may also need to be
probated, and the residue will be paid to Caroline’s mother. Andrew’s siblings
receive nothing.
7.7.1.2 Outcome #2: Each is Deemed to Survive the Other Rule

British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick,
Quebec and Yukon:13
In these jurisdictions, the rights are determined as if each testator (e.g. the deceased)
survived the other person (e.g. the beneficiary). As a result:
• For purposes of Andrew’s estate, Caroline is determined to have pre-deceased
Andrew, so Andrew’s estate is paid to his siblings.
• For purposes of Caroline’s estate, Andrew is determined to have pre-deceased
Caroline, so Caroline’s estate is paid to her mother.
British Columbia: The rule also applies to gifts to two or more beneficiaries who die at
the same time. Subject to a contrary intention in the will, each beneficiary’s estate will
take his or her share. See WESA, s. 9(2).
Quebec: See 7.7.1.3 for further explanation.
7.7.1.3 Quebec Only: Deceased and Beneficiary Die at the Same Time
In Quebec, if more than one person dies and it is impossible to determine the order of
death, they are deemed to have died at the same time if at least one of them is called to
the succession of the other (art. 616 CCQ). In that situation, the succession of each
devolves to the person(s) who would have been called to take it in his or her place.
12
Survivorship Act, R.S.N.S. 1989, c. 454, s. 2; Commorientes Act, R.S.P.E.I. 1988, .c C-12 s. 1; Survivorship Act,
R.S.N.L. 1990, c. S-33, s. 2; Survivorship Act, R.S.N.W.T. 1988, c. S-16, s. 1; Survivorship Act, R.S.N.W.T. (Nu)
1988, c. S-16, s. 1.
13
Wills, Estates and Succession Act, S.B.C. 2009, c. 13, s. 5; Wills and Succession Act, S.A. 2010, c. W-12.2, s. 5;
The Survivorship Act, 1993, S.S. 1993, c. S-67.1, s. 2; The Survivorship Act, C.C.S.M., c. S250, s. 1; Succession
Law Reform Act, R.S.O. 1990, c. S.26, s. 55; Survivorship Act, S.N.B. 2012, c. 116, s. 1; Survivorship Act, R.S.Y.
2002, c. 213, s. 1.
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7.7.2 Statutory Survivorship Rules – How Many Days Must a Beneficiary

Survive?
British Columbia, Saskatchewan, Manitoba, New Brunswick only:
Four Canadian jurisdictions have introduced statutory survivorship rules. Where these rules
apply, a beneficiary is deemed to have pre-deceased if the beneficiary does not survive the
required number of days. The jurisdictions with statutory survivorship rules are:
• British Columbia and Saskatchewan: The beneficiary must survive five days.14
• New Brunswick: The beneficiary must survive ten days.15
• Manitoba: For intestate distributions only, the beneficiary must survive the intestate
deceased person for fifteen days.16
Example: Using the example of Andrew and Caroline (see 7.7.1 Simultaneous Deaths (Order of
Death)), if Caroline had died eight days after Andrew, and they had been resident in one of the
four jurisdictions, the following would result:
• British Columbia, Saskatchewan and Manitoba: Caroline (or her estate) would take
Andrew’s estate. She survived more than five days for purposes of the law in British
Columbia and Saskatchewan. Caroline’s estate passes to her mother under Caroline’s
will. The rule in Manitoba does not apply because Andrew had a will.
• New Brunswick: Caroline did not survive ten days so she is deemed to pre-decease
Andrew. Andrew’s estate is distributed to his siblings.
Students are referred to the relevant legislation for the unique details of each of these
jurisdictions.
7.7.3 Survivorship Rules and Designations on Registered Plans and Insurance

Designations
Survivorship rules are also relevant when considering payment to named beneficiaries of
registered plans and life insurance policies. While laws governing registered plans generally
follow the provincial rules (see 7.7.1 Simultaneous Deaths (Order of Death) and 7.7.2 Statutory
Survivorship Rules), life insurance legislation may apply different rules.
In most jurisdictions, if the insured and named beneficiary die in circumstances where it is
uncertain who died first, the beneficiary is deemed to have pre-deceased. The remaining named
beneficiaries will take the proceeds. If there is no other named beneficiary, the proceeds will be
paid to the estate.
14
Wills, Estates and Succession Act, S.B.C. 2009, c. 13, s. 10; The Survivorship Act, 1993, S.S. 1993, c. S-67.1, s. 4.
15
Survivorship Act, S.N.B. 2012, c. 116, s. 6.
16
The Intestate Succession Act, C.C.S.M., c. I85, s. 6.
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Quebec Only: The insured is deemed to have survived the beneficiary in these circumstances,
unless the insured dies intestate leaving no heir within the degrees of succession (art. 2448
CCQ). In this situation, the beneficiary will take the proceeds as the beneficiary of the policy.
7.7.4 Common Law Only: Joint Tenancies and Survivorship Rules

Where an asset or account is held by two or more individuals jointly with right of survivorship,
the order of death is also important. Subject to any provisions in an account agreement or other
document governing the joint ownership, there are again two possible outcomes:
7.7.4.1 Outcome #1: Youngest Survives the Oldest

Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest
Territories, and Nunavut:
These jurisdictions have the “youngest survives the oldest” rule and the legislation has no
special rules for joint assets. Therefore, the youngest joint owner is deemed to have
survived and his or her estate will take the asset or account proceeds.
7.7.4.2 Outcome #2: Ownership is Severed

British Columbia, Alberta, Saskatchewan, Ontario, New Brunswick, and Yukon:
In these jurisdictions where the survivorship rule is that each is determined to survive the
other, the legislation also provides that jointly owned assets are deemed to be owned
equally. The joint tenancy is severed and each owner’s estate takes 1/2 of the asset or
account. The share of the asset or the account forms part of the estate and will be
distributed in accordance with the owner’s will or on intestacy.
7.8 COMMON LAW ONLY: WHEN BENEFICIARIES PRE-DECEASE A

TESTATOR AND GIFTS TO BENEFICIARIES FAIL
Often a will or trust document provides for a gift over (an alternate beneficiary) in case a
beneficiary pre-deceases, does not accept a gift, or for some other reason is not entitled to receive
the gift.17 A gift over allows the testator or settlor to control the distribution.
Where a gift has failed and there is no gift over, the outcome will depend on the facts and will be
determined by legislation or, if applicable, relevant case law. This section reviews the various
scenarios in the context of an estate.
17
For example, in many jurisdictions, if the beneficiary has divorced the testator, the beneficiary is often not entitled
to the gift and is deemed to have pre-deceased. Beneficiaries who are a witness to the will are also prohibited
from taking a bequest in most jurisdictions.
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7.8.1 Gifts to More than One Person

When a will leaves an asset to two or more beneficiaries it will be necessary to determine
whether the beneficiaries take title as tenants in common or joint tenants with right of
survivorship to ensure that reregistration reflects the proper nature of the ownership.
The general rules are:
• real estate is owned by two or more owners as tenants in common unless the owners are
specifically registered as joint tenants with right of survivorship.
• personal property is owned as joint tenants with right of survivorship. One exception to
this rule is for Canada Savings Bonds and Canada Premium Bonds, which must include
“and survivor” on the registration.
Given these rules, the executor may need to determine the deceased’s intention to ensure
registration follows the foregoing general rules. Subject to a contrary intention in the will:
• a bequest of personal property to two or more people will be transferred to the
beneficiaries to own jointly with right of survivorship and
• a bequest of real property to more than one beneficiary will be transferred to the
beneficiaries as tenants in common.
7.8.2 Gifts that Fail

Gifts in a will may fail for many reasons. The beneficiary may:
• die before the testator,
• renounce (refuse) the gift,
• be disqualified from receiving the gift (e.g. for being a witness to the will or a former
spouse), or
• the assets remaining after payment of debts and liabilities may be insufficient to pay all
of the legacies.
Legislation in each jurisdiction often deals with each of these situations. In the common law
jurisdictions, any gaps in the legislation are addressed in the case law.
If a beneficiary pre-deceases the testator and there is no gift over, the gift is said to lapse and the
beneficiary will not take the gift.
However, when determining the beneficiaries of an estate, there are a number of rules that must
be considered. Some rules deem a beneficiary to have pre-deceased in certain circumstances (the
survivorship rules discussed above and rules governing divorce and relationship breakdowns).
Other rules allow for a gift to be saved and distributed to a pre-deceased beneficiary’s children or
issue (anti-lapse rules). If none of the saving rules apply, default rules apply and will depend on
whether the gift is a legacy or a gift of residue.
See Chapter 3 at 3.4.3 Effect of Divorce on a Will, for a review of the rules that may govern
when a testator and spouse divorce or a spousal relationship terminates. Students are referred to
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the rules of their jurisdiction to determine when a separation, marriage breakdown, or divorce
may cause the former spouse’s interest as a beneficiary to end. When these rules apply, the
executor treats the situation as one where the spouse pre-deceased.
The “survivorship rules” determine who survives when the testator or an intestate person dies at
the same time as a beneficiary. The rules may also require a beneficiary to survive a certain
number of days. The rules are discussed above (see 7.7 Survivorship Rules).
“Anti-lapse” legislation deals with the situation where the testator leaves a gift to a child or issue,
and in some cases a sibling, and that beneficiary pre-deceases. In these situations, the
descendants of the pre-deceased beneficiary (and sometimes a spouse), or the pre-deceased
beneficiary’s estate, will take a pre-deceased beneficiary’s share of the estate. These rules are
discussed below (see 7.8.2.1 Anti-lapse Rules).
7.8.2.1 Anti-Lapse Rules

Anti-lapse legislation addresses situations where the beneficiary of a gift is a close
relative of the testator (e.g. a child, grandchild, or other issue), or in some jurisdictions a
brother or sister.
Each jurisdiction sets out the rules that apply unless there is a contrary intention in the
will. When anti-lapse legislation applies the descendants (and sometimes the spouse) of
the deceased beneficiary take, in place of the beneficiary. The rules vary between
jurisdictions but two general schemes can be identified:
• the beneficiaries are those who would inherit the estate of the pre-deceased
beneficiary if there was an intestacy (without debts and either with a surviving
spouse or without a surviving spouse); or
• the estate of the deceased person receives the distribution.
See Figure 7.1 Common Law Only: Gifts that Fail – Anti-lapse Rules by Jurisdiction at
the end of this Chapter for a summary of the rules that save gifts that might otherwise fail
(e.g. common law anti-lapse rules) Students should refer to their applicable legislation for
the full detail of the rules. The example below is provided to introduce students to how
the rules may be applied.
Example:
The following example illustrates the application of the anti-lapse rules in the common
law jurisdictions.
• Jason is a widower. He leaves his estate equally to his two daughters, Lise and
Jenna.
• The will does not address the situation where either or both daughters pre-decease
Jason.
• Lise pre-deceased Jason. She is survived by her husband, Noah, her oldest son
David and her second son Eric’s spouse Mia and only child John.
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The following outcomes can be anticipated:

(In order to follow this example it will be necessary to refer to the intestacy rules set out
later in this Chapter (see 7.13 Intestacy Rules). See also Figure 7.8 Common Law Only:
Spousal Preferential Share and Division of Property Between Spouse and Children (by
Jurisdiction) for division between spouse and children on an intestacy.)
British Columbia and Alberta:
• Jenna takes 50%.
• The remainder goes to Lise’s descendants as if she died intestate. David and
Eric are her immediate descendants. David would take 50% of Lise’s share and
Eric’s 50% share would go to John, his only descendant.
• Mia has no entitlements.
Manitoba:
• Lise’s share is divided equally between David and John
Nova Scotia:
• The gift is paid to the deceased beneficiary’s estate.
Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador, Prince
Edward Island, Yukon, Northwest Territories and Nunavut:
• Lise’s share is divided as follows:
o Noah takes the spousal share (1/3) under intestacy laws (ignoring the
preferential share);
o David takes a 1/2 share of the remainder (1/3); and
o John takes Eric’s share (1/3).
7.8.2.2 Determining Contrary Intention and Anti-lapse Rules

As noted above, anti-lapse legislation does not apply if there is a contrary intention in the
terms of the will. The testator may create a contrary intention by providing for a gift over
(an alternate beneficiary for the gift) should the first named beneficiary die before the
deceased. The testator may also indicate that the gift over applies if the beneficiary does
not take the gift for any other reason (e.g. refusal of the gift or disqualified for being a
witness or a former spouse).
In the absence of clear wording, the executor must analyze the wording and consider the
case law as well as any applicable legislation.
7.8.2.3 Anti-lapse, Contrary Intention and Class Gifts

One example where the law provides guidance on whether the will includes a contrary
intention relates to class gifts.
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The law generally considers a class gift to be evidence of a contrary intention. In this case
only the surviving members of the class would take. However, class gifts have been
included in the statutory anti-lapse rules in a number of jurisdictions. Therefore, unless
the legislation specifically refers to beneficiaries identified as members of a class, the
anti-lapse rules do not apply.18
7.8.2.4 Cases on Anti-lapse and Contrary Intention

The examples below illustrate the range of wording that the executor may come across
and the potential outcomes when trying to determine if the anti-lapse rules apply.
• A gift to my son Adrian “if he survives me” has been held to be sufficient to
establish a contrary intention. So, if Adrian pre-deceased, the anti-lapse rules
would likely not apply.
• A gift to my son John “for his own use absolutely” has been held to be subject to
the anti-lapse provisions. Therefore, if John pre-deceased leaving issue, the
applicable anti-lapse rules may apply.
• A gift to my two sons “Jake and Ethan in equal shares per capita” has been held to
be subject to the anti-lapse provisions. If Ethan pre-deceased leaving issue, the
applicable anti-lapse rules may apply.
7.8.3 When a Beneficiary Renounces a Gift

Beneficiaries cannot be compelled to accept a gift. A beneficiary may renounce an interest in a
gift for a number of reasons. For example, the beneficiary may not need or want the gift or there
may be a potential or known environmental or financial liability (see CETA 2).
7.8.3.1 Renouncing the Right to Income from a Trust

A beneficiary of a testamentary trust entitled to the income from the trust might renounce
the interest at the beginning so that the beneficiary takes nothing. Or, after a period of
time, the beneficiary may refuse to accept future payments. The legal and tax
consequences of a renunciation of this kind will depend on the circumstances. Generally,
if the gift is renounced from the outset, the executor and trustee will deal with the
situation as if the beneficiary pre-deceased and the applicable rules apply.
However, if the beneficiary has accepted the income for a period of time, there are a
number of potential consequences that are beyond the scope of this course. Most
importantly, the trustee will need to determine whether the trust comes to an end pursuant
to the doctrine of acceleration, so that the trust can be distributed, or if it is necessary to
hold the assets until the condition set for the distribution occurs.
18
Feeney at para 13.27.
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In order to determine if the doctrine of acceleration applies, one must review the facts and
the wording of the document in order to try to determine the intention of the testator or
settlor in each circumstance. A number of rules have been established by the case law to
help with this interpretation. Details about the rules are beyond the scope of this course.19
However, one example is provided to demonstrate how the rule might be applied.
Example: The trustee is to pay the income to the testator’s spouse for life or until
remarriage. Upon the termination of the spouse’s interest, the trust fund is to be paid to
the testator’s three children. If any child has pre-deceased, that child’s share is to be
paid to the child’s issue. If the spouse disclaims all right to the future income, the
question will be: Can the trust be distributed, or must the trustee wait until one of the two
conditions occur to determine whether or not it is the children who receive, or any issue
of the children? If the remarriage clause was not included, would the result be different?
At least one court in British Columbia has held that in the first situation, acceleration
would apply. However, in the second situation it may not.
7.8.4 When there is No Beneficiary

When a gift fails because the anti-lapse rules do not apply, there is no gift over to another
beneficiary, or there are no beneficiaries available to take, there are generally two outcomes
depending on whether the gift is a legacy or residue.
7.8.4.1 When a Legacy Fails

A legacy includes an outright legacy, whether a specific, demonstrative, or general
legacy. In this context it also includes a specific sum or asset set aside to be held in trust.
If the gift fails, it falls into the residue and is distributed accordingly. An example of each
situation follows:
• A legacy that fails will become part of residue: Jonathan’s will directs the
executor to pay $10,000 to his neighbour Jeremy. The residue is paid to a local
charity. Jeremy dies before Jonathan. Because there is no gift over, the $10,000
becomes part of the residue that is paid to the charity.
• A specific amount of money or an asset is set aside in a testamentary trust:
Jonathan’s will directed the executor to hold $200,000 in trust for Jeremy. The
executor/trustee was directed to pay the income to Jeremy for life. On Jeremy’s
death the capital was to be paid to Jeremy’s nieces and nephews. The will directed
the executor to pay the residue to a local charity. The $200,000 was set aside and
income paid to Jeremy. The residue of the estate was paid out to the charity. Five
years later Jeremy dies but he has no nieces or nephews. Upon Jeremy’s death the
trust comes to an end but there is no beneficiary to take the remainder of the trust
assets. The capital remaining in the trust falls back into residue and the terms of
19
For more information on the doctrine of acceleration see Widdifield at para 5.1.11.
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the will dealing with residue must be followed. The funds will be paid to the
charity.
7.8.4.2 When a Gift of Residue Fails

Where the gift of residue in an estate fails, the will does not deal with the situation. It is
as if the testator died without a will and the intestacy rules, which would have applied to
the deceased if he or she did not have a will, would apply. Two examples follow:
• Gift of residue fails: Leah’s will provides for three cash legacies and the
residue is to be paid to a long-time friend. The friend has pre-deceased.
There is no gift over. The executor must determine Leah’s intestate heirs
and distribute the residue accordingly.
• Gift at termination of testamentary trust fails: Dylan’s will establishes
a testamentary trust from the residue to pay income to Aaron for life. The
will fails to deal with the residue on Aaron’s death. When the trust ends,
the trustee will hold the residue on a resulting trust to be distributed to
Dylan’s intestate heirs at the date of Dylan’s death.
Similar rules will apply to an inter vivos trust. However, in this situation, the trustee will
hold the assets on a resulting trust for the settlor if the settlor is still alive. If the settlor
has died, the assets must be paid to the settlor’s estate to be distributed in accordance
with the settlor’s will. If there is no will, the assets form part of the settlor’s intestate
estate and will be distributed accordingly.
7.8.5 When the Assets are Insufficient to Pay Debts and All Legacies
(“Abatement Rules”)
When the value of the estate liabilities and expenses exceed the value of the legacies under the
will, the executor must determine which legacies will be used to satisfy the estate’s obligations.
In all of the common law jurisdictions, except Alberta, the common law abatement rules apply
and are summarized below.
7.8.5.1 Order of Abatement (All Provinces Except Alberta)

When the assets of an estate are insufficient to satisfy all the estate debts, administration
expenses, and legacies, the legacies must be reduced to satisfy the payments. In order to
raise the funds to pay the outstanding debts and liabilities, the “abatement” rules require
legacies under the will to be reduced in a specific order, subject to a contrary intention in
the will.
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When abatement is required, gifts abate according to the type or category of gift, as
follows:20
1. The residue of the estate is reduced first until it is exhausted and personal
property is exhausted before real property is applied.
2. General legacies, including pecuniary (cash) legacies.
3. Demonstrative gifts.
4. Specific gifts of personalty.
5. Specific gifts of real property abate last.
The gifts at each level abate together or rateably, in proportion to the beneficiaries’
interests. The following examples illustrate the rules.
Example #1 – Cash Legacies
• Albert’s will contains two general legacies – $30,000 to Anna, and $90,000 to
Bryce.
• The residue is paid to Donald.
• After exhausting the residue to pay the estate liabilities, the amount remaining to
pay the legacies is $80,000.
Outcome:
• The total of all general cash legacies is $120,000. Anna was entitled to 25% or
$30,000 and Bryce was entitled to 75% or $90,000.
• $80,000 (the cash remaining) equals 2/3 of the value of all general cash legacies.
• Therefore, Anna and Bryce must share 2/3 of the original entitlement in
accordance with their proportionate or ratable share:
o Anna receives $20,000 (25% of 80,000).
o Bryce receives $60,000 (75% of 80,000).
Example #2 – Gift of Real Property

• Jennifer’s will contains two general legacies – $30,000 to Albert, and $90,000 to
Brent.
• There is a specific legacy of the balance remaining in R&G Bank account number
1234 to Charles. At the time of death, there was $10,000 in the account.
• There is a further specific gift of the family cottage worth $350,000 to Donald.
• The amount of unpaid liabilities of the estate after exhausting the residue is
$180,000.
20
See 7.1 Classes of Gifts and Beneficiaries for a review of the different classes of legacies. For further discussion
on these rules, see Widdifield at para 5.2. See also Feeney at paras 8.51-8.53.
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Outcome (except British Columbia and Alberta)

• The general legacies are exhausted completely. The $120,000 in pecuniary (cash)
legacies gifted to Albert and Brent abates.
• The specific legacy of personal property abates before real property. Therefore
the $10,000 gift to Charles is exhausted and Charles receives nothing.
• The remaining $50,000 must be satisfied from the specific gift of the family
cottage that was left to Donald.
• As a result, the cottage property must be sold to raise the $50,000 to pay the
outstanding balance of the liability. Donald receives the balance of the proceeds
$300,000.21
British Columbia: The legislation has abolished the common law distinction between
legacies of personal and real property. Therefore, in Example #2 above, $60,000 remains
unpaid. Charles and Donald must share the responsibility for the outstanding date
rateably. The outstanding debt is $60,000; the value of the two gifts is $360,000.
Therefore each must contribute 1/6 (60/360). Charles will contribute $1667 and Donald
will contribute $58,333 from the proceeds of the sale.22
Alberta: Sections 27 to 28 of the Estate Administration Act, S.A. 2014, c. E-12.5, set out
“marshalling rules” and subject to a contrary intention in the will, all legacies, whether
real property or personal property, must share the liabilities proportionately in the
following order:23
• Property specifically identified to pay the debts,
• The residue,
• General gifts of property,
• Specific gifts of property, and
• Property for which the deceased person had a general power of appointment that
has been exercised by will.
Given these provisions, the result in Example #2 is similar to the result in British
Columbia. Charles and Donald must share the responsibility for the outstanding debt
proportionately.
21
In some situations it may be possible for Donald and the executor to make an arrangement for a loan to cover the
liability. This raises a number of issues that would need to be considered that are beyond the scope of this course.
22
See s. 50 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 for additional rules for other circumstances.
23
Students should refer to the legislation for the detailed provisions.
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7.8.6 Gifts that Do Not Exist at the Date of Death (“Ademption Rules”)
“Ademption” refers to situations where a testator makes a gift of specific property to a
beneficiary by will, but for some reason the testator no longer owns the property at the time of
death. The property may have been destroyed (fire or other destruction), the testator may have
sold the property, or the asset may no longer match the description. When the gift does not exist
the gift is said to have adeemed and the beneficiary receives nothing.
A general or demonstrative gift is not subject to ademption because the property to satisfy such
gifts may be taken from any part of the estate. Only specific legacies or gifts are subject to
ademption. However, there are two exceptions.
7.8.6.1 A Specific Legacy is Exchanged or Replaced

The ademption rules do not apply if it can be established that the gift that was the subject
of the legacy was replaced or substituted and it was the testator’s intention that the
replacement property is to be the legacy. This requires a careful construction of the
wording and the facts.
Consider the example where a testator gifted his antique Jaguar to a nephew in his will,
but the car was destroyed in a fire during her lifetime. Upon death, the gift adeems and
the nephew will receive nothing. The same result would occur if the car was sold and the
proceeds deposited into the testator’s bank account. The nephew would not have a claim
on the proceeds from the sale. However, if the car was sold and replaced with a newer
model, legal advice may be required to determine whether or not there has been a
conversion or substitution of the original gift. Case law suggests that gifts of items that
are commonly replaced may be saved.24
Another situation that does not involve any actions by the testator is when a company
exchanges the shares held by a shareholder for different shares. In this case, the
substituted property may replace the original legacy.25
7.8.6.2 Statutory Exceptions to Ademption – Sale by Substitute

Decision-makers
Any substitute decision-maker will want to try to become familiar with the terms of the
adult’s will. This helps to ensure that specific bequests are not disposed of unless
necessary. Three jurisdictions now provide that if a specific legacy is sold or gifted, the
legatee may be entitled to the proceeds (or fair market value at the time of disposition).
Each rule is subject to some exceptions.
24
See Feeney at para 15.50.
25
See Feeney at para 15.27. For further reading on ademption when the gift identified in the will no longer exists,
see Feeney at chapter 15.
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British Columbia: If a committee, attorney, or representative sells or gifts a property

that is subject to a specific legacy, the beneficiary is entitled to the proceeds unless the
adult was capable and gave instructions to dispose of the asset or there is a contrary
intention in the will.26 Section 19(3)(d) of the Power of Attorney Act specifically
prohibits a disposition unless it is necessary to comply with the attorney’s duties.
Manitoba: If a committee under The Mental Health Act27 or a substitute decision-maker
under The Vulnerable Persons Living with a Mental Disability Act28 disposes of real or
personal property that is subject to a devise or legacy, the beneficiaries have the same
interest and rights in the proceeds as they would have had in the property if it had not
been sold, mortgaged, exchanged, or disposed of.29
Ontario: A property guardian and an attorney acting under a continuing power of
attorney may not dispose of specific assets that are subject to a specific bequest in a will
unless it is necessary to comply with the guardian’s duties.30
7.9 QUEBEC ONLY – GIFTS THAT FAIL

7.9.1 Lapse and Nullity of Legacies
A legacy may lapse for several reasons, including:
• The legatee pre-deceased the testator or died at the same time and there is no
representation;31
• The legatee refuses the legacy;
• The legatee is unworthy of inheriting; or
• The bequeathed property perished totally during the lifetime of the testator.
Articles 750-755 CCQ address these situations and are discussed below. See also Chapter 3 The
Law of Wills for the rules regarding the effects of divorce on legacies.
If a legacy lapses and there is no provision in the will for an alternative distribution, the property
will devolve to the heirs of the deceased according to the rules governing intestate successions
(art. 736 CCQ).
7.9.2 Legacies to Individuals and Joint Entitlements

As discussed earlier in this Chapter there are three types of legacies in the CCQ (see 7.1.2
Quebec Only: Types of Legacies (Gifts) Made by Will):
26
Wills, Estates and Succession Act, S.B.C. 2009, c. 13, s. 48.
27
C.C.S.M., c. M110.
28
C.C.S.M., c. V90.
29
See s. 24 of The Wills Act, C.C.S.M., c. W150 for the full wording of this section.
30
See s. 35.1 and s. 38 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 for the full details.
31
For example, Representation by roots to the pre-deceased beneficiary’s descendants. See below at 7.9.4.1 Causes
Linked to the Person.
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• the universal legacy (defined in art. 732 CCQ),

• the legacy by general title (defined in art. 733 CCQ), and
• the particular legacy (for which there is only a definition in the negative at art. 734 CCQ).
The classification of legacies in the CCQ serves two purposes.
1. It defines the scope of each type of legacy, that is, what it comprises:
o a universal legacy entitles the legatee to receive all of the estate;
o a legacy by general title entitles the legatee to receive one of the stipulated masses
of property such as all the movables or a percentage of the movables; and
o a particular legacy entitles the legatee to receive something specific, such as a car,
a sum of money, or a collection of things such as books.
2. It determines debt liability:
o universal legatees and legatees by general title are liable for the debts of the
deceased up to the value of the property they receive (art. 625(2) CCQ) and,
o in principle, the particular legacy is not liable, except if there is insufficient estate
property to pay the debts (art. 739(2) CCQ)).
There are causes and consequences of failed legacies. However, the liquidator must first determine
if the legacy provides for an individual entitlement where only one person is the legatee, or if two
or more persons are entitled to the legacy. In the latter situation, additional questions must be
addressed to determine if there is a joint legacy.
Where a will provides that two or more persons are entitled to a legacy, there will be a joint legacy
if the three elements in article 756 CCQ are present:
1. the legacy is made in one and the same disposition,
2. the testator has not allotted the share of each co-legatee (e.g. 25% to Pierre and 75% to
Jacques), and
3. the testator has not allotted equal percentage shares (e.g.: 25% to Pierre, 25% to Jacques,
25% to Marie and 25% to Emilie).
Where these conditions are met and a gift in a will is made to more than one person without any
allocation of percentages, the gift is a joint legacy and the beneficiaries will take the property
bequeathed in undivided co-ownership.
Where the legacy is a joint legacy, and lapse occurs with respect to one of the co-legatees of the
joint legacy, accretion takes place in favour of the other co-legatee or co-legatees (art. 755 CCQ).
Accretion means that the deceased’s beneficiary’s share is divided among the surviving co-
legatees, or paid to the surviving legatee.
Although articles 755 and 756 CCQ only refer to a legacy by particular title, the same principle
applies in case of a joint universal legacy and a joint legacy by general title because the definitions
in articles 732 and 733 CCQ contemplate joint legacies since they refer to the legacy “to one or
several persons”.
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Accretion means that the share of the legacy affected by a lapse accrues to the benefit of the other
co-legatee or co-legatees. For example, if the testator bequeathed his or her residence to his or her
three children, and one of the children pre-deceases, that child’s share lapses and accrues to the
surviving two children.
7.9.3 Failure of Legacies and Consequences

Legacies fail because of lapse, nullity, or revocation.
• Lapse is due to a defect when the legacy takes effect (arts. 750-753 CCQ).
• Nullity results if there was a defect when the legacy was made (arts. 757-762 CCQ).
• Revocation is not due to a defect. Instead, the legacy is rendered inoperative prior to its
taking effect (arts. 763-765 and 767-771 CCQ).
7.9.4 Lapse for Causes Linked to the Person or the Property
7.9.4.1 Causes Linked to the Person

A lapse of a legacy may be caused by a link to the person in the following situations:
• a named legatee pre-deceases the testator, there is no alternative disposition and
the testator has not modified the disposition (art. 750 CCQ);
• a named legatee refuses or renounces the legacy (arts. 646 and 750 CCQ);
• there is a finding that the legatee is unworthy (arts. 620-621 and 750 CCQ);
• a liquidator or tutor to whom a legacy was made declines to act as liquidator or
tutor (art. 753 CCQ); or
• the legacy charged with another legacy because of a cause depending on the legatee
(art. 752 CCQ). For example, “I give my farm to X and X’s son will have a right of
habitation therein, if X obtains a university degree by the age of thirty”.
7.9.4.2 Cause Linked to Property

A lapse may occur in the case of a legacy of a property that totally perishes (e.g. because
of a fire) during the testator’s lifetime. If the loss occurs at the testator’s death or
subsequently, the legatee would be entitled to the insurance proceeds, if any (art. 751
CCQ).
7.9.5 Nullity
Lapse invalidates the entire legacy. Nullity, on the other hand, may only affect part of the
disposition and leave the rest intact. For example, a condition that is impossible or contrary to
public policy is deemed unwritten. The legacy itself is not null, merely the condition, so the legacy
is read without the condition (art. 757 CCQ). An example of a condition is found in article 757(2)
CCQ, which provides that a clause limiting the rights of a spouse, in the event of
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re-marriage, would be struck out. Similarly, a penal clause intended to prevent a legatee from
contesting the validity of the will or any part thereof is deemed unwritten (art. 758 CCQ).
Nullity may also occur by reason of causes linked to the person or to property.
7.9.5.1 Nullity for Causes Linked to the Person

The CCQ sets out four causes linked to the person that result in the nullity of a legacy.
1. A legacy made to the notary before whom the notarial will is executed and to
the receiving notary’s spouse or relative in the first degree is null (art. 759
CCQ).
2. A legacy to the witness of a will is null (art. 760 CCQ).
3. A legacy to the owner, director, or employee of a health or social services
establishment is null if made while the testator was receiving care or services
from the establishment (art. 761 CCQ).
4. A legacy made to a member of a foster family while the testator was residing
there with that family is also without effect (art. 761 CCQ).
In applying article 761 CCQ, the case law varies depending upon whether a literal or
restrictive interpretation is applied by the Court. These interpretations and the analysis are
beyond the scope of this course.
7.9.5.2 Cause Linked to Property

If a testator attempts to make of legacy of property that belongs to someone else, the
legacy is null.32
7.9.5.3 Revocation
Revocation eliminates the effects of the legacy. It differs from lapse or nullity in that it
can result from:
• a real or presumed act of the testator,
• a material fact, or
• a cause recognized by law and sanctioned by the Court (known as legal or judicial
revocation).
7.9.5.4 Revocation by Testator (art. 763 CCQ)

The testator may revoke a legacy expressly or tacitly (art. 763 CCQ). In this context, the
testator is not revoking the entire will, but specific legacies may be revoked or changed.
32
See art. 762 CCQ and note that there are also exceptions. The case and the exceptions are beyond the scope of this
course. See Nixon v. Pinelli, J.E. 2000-2183 (C.A.).
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Often a codicil is used to expressly revoke a legacy. Tacit revocation is deduced from the
acts of the testator and includes the scenarios described below.
• The erasure of any disposition of a will entails revocation of the legacy made in
that disposition (art. 767 CCQ). This can only affect dispositions in a holograph or
witness will. If the erasure is made without the testator’s consent, but the testator
had knowledge and didn’t remedy, this entails revocation.
• A subsequent testamentary disposition containing a legacy similarly entails tacit
revocation of a previous disposition to the extent that they are inconsistent (art.
768 CCQ). It should be noted that the revocation retains its full effect even if the
subsequent disposition lapses (arts. 768 and 770 CCQ).
Article 769 CCQ addresses instances of tacit revocation with respect to bequeathed
property that is alienated (sold before the testator’s death) (art. 769 CCQ):
Art. 769. Alienation of bequeathed property, even when forced or made under a resolutive
condition or by exchange, also entails revocation with regard to everything that has been
alienated, unless the testator provided otherwise.
Revocation subsists even if the alienated property has returned into the patrimony of the
testator, unless a contrary intention is proved.
If the forced alienation of the bequeathed property is annulled, it does not entail revocation.
7.9.5.5 Revocation of Gifts Made Prior to Divorce or Nullity

As noted in Chapter 3 (see 3.4.3 Effect of Divorce on a Will), a legacy in a will that was
made before a divorce or the dissolution of a civil union or the nullity of either, will be
void unless there was a contrary indication by the testator (art. 764 CCQ).
The designation of the spouse as liquidator in these circumstances is also revoked.33
De facto spouses are not contemplated under article 764 CCQ, so the legacy would remain
valid if cohabitation ceased.
7.9.5.6 Judicial Revocation

Judicial revocation of a legacy may occur in two circumstances. The court may revoke a
legacy if:
• a beneficiary is unworthy (art. 621 CCQ). Grounds of unworthiness include that
the person is guilty of cruelty towards the deceased; concealment, alteration or
destruction in bad faith, of the will; or hindering the testator in writing, amending
or revoking the testator’s will.
33
See Sioris v. Lamarre (1998) RJQ 1573 (C.S.) and Lamarre v. Sioris J.E. 2000-673 (C.A.).
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• the Court, pursuant to article 771n modifies or reduces the performance of a charge
attached to a legacy if it is impossible or burdensome and this was unforeseeable
when the legacy was accepted.
7.9.6 Consequence of Lapse, Revocation, or Nullity

If a legacy lapses, is revoked, or is a nullity, the person who would otherwise have been entitled if
the legacy had not been made will take. For example:
• a failed universal legacy will devolve to the intestate heir(s) (see art. 736);
• a failed legacy by general title will devolve to the universal legatee or, failing the universal
legatee, to the intestate heir(s) (see arts 732 or 736 CCQ34);
• a failed particular legacy will devolve to the legatee by general title (depending on the
nature of the property bequeathed) or universal heir (see arts. 733 and 732); or
• a failed legacy to a joint legatee will accrue to the joint co-legatee(s) (see art. 756).
See Figure 7.2 Quebec Only: Consequences of Failed Will or Legacy by Lapse, Nullity,
Revocation for a summary of the rules on the consequences of a failed will or legacy by lapse,
nullity, or revocation.
7.9.7 Representation of a Pre-deceased Beneficiary

If the testator has left his or her entire succession by will to all of the testator’s descendants or
collaterals who would have been called to his or her succession had the testator died intestate,
representation takes place, subject to certain conditions set out in article 749 CCQ (discussed
below) and unless a contrary intention has been expressed in the will.
Article 660 CCQ provides that:
Representation is a favour granted by the law by which a relative is called to a
succession which his ascendant, who is a closer relative of the deceased, would have
taken, but is unable to take himself, having died previously or at the same time or
being unworthy.
Representation may prevent lapse and accretion in testamentary successions.
Prior to 1994, representation was not allowed in testamentary successions unless expressly
provided for. It was only allowed in intestate successions. Subject to the terms of the will, article
749 CCQ permits representation in testamentary successions under certain conditions:
• the will must have been made on or after January 1, 1994;
• the legacy must be by universal or general title (representation cannot occur with respect
to a particular legacy, unless expressly stipulated in the will);
34
Although the articles do not expressly state these results, the result of these provisions leads to this result.
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• the legatee is a member of a special group, namely, descendants or collaterals;35

• the legacy must benefit all members of the special group;
• the special group would have inherited in an intestacy; or
• there is no express exclusion of representation in the will.
Consider the following example.

• Jason is a widower. At the time of his death he had two daughters, Lise and Jenna.
• The will is silent on the scenario that either or both daughters pre-decease him.
• Lise pre-deceased Jason. She is survived by her husband, Noah, her oldest son David and
her second son Eric’s spouse Mia and only child John.
• At the time of Jason’s death, his daughter Jenna has one grandchild, Jake. Jake’s mother
Cindy, Jenna’s only daughter, had pre-deceased.
The wording in the will is relevant to the interpretation. Consider if Jason’s will had
stated the following:
• “I bequeath all my property to my children.”
o Lise pre-deceased Jason. Therefore representation can take place.
Lise’s one-half is divided between David and Eric’s only descendant
(John). David and John each take one-quarter (being one-half of
Lise’s share).
o Jenna takes the other half.
• “I bequeath all my property to my children in the first degree.”
o Lise has pre-deceased. Representation is expressly excluded
because of the qualification “in the first degree”. Therefore Jenna
will take the entire estate.
• “I leave all my property to my grandchildren.”

o If a grandchild has pre-deceased, and the deceased had a living son,
representation could not take place because the legacy is not made
to the descendants who have been called in an intestacy because of
the presence of the son John. Therefore, the legacy would devolve
to the surviving grandchildren only.
35
See definitions in arts. 657, 258, 259 and 670 for definitions. See also summary of CCQ intestacy rules 7.13.2
General Rules.
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7.9.8 Insolvent Successions

If the succession is not manifestly solvent, the liquidator may not pay debts or legacies by
particular title (except public utility bills and urgent debts, if necessary) until sixty days
following the registration of the notice of closure of inventory, or from the exemption of making
an inventory (art. 810 CCQ).
If the property of the succession is insufficient, the liquidator must draw up a statement of debts
and legacies by particular title, give notice to the interested persons, and obtain homologation of
a payment proposal by the court (art. 811 CCQ).
The priority of payment of debts set out in the payment proposal is as follows (art. 812 CCQ):
• prior or hypothecary creditors (except for claims of support);
• other creditors (except for claims of support), in proportion to their claims if there is
insufficient property to cover all debts;
• creditors of support, in proportion to their claims; and
• legatees by particular title.
If there is insufficient property to pay the debts, the liquidator may alienate property bequeathed
as legacies by particular title, or reduce the legacies (art. 813, para. 1 CCQ). See also article 813,
paragraphs 2 and 3, and article 814 CCQ regarding the proportion of the reduction and
preferential payment of legacies by particular title.
7.10 ISSUES RELATED TO SPECIFIC GIFTS

7.10.1 Gifts with a Charge
From time to time a will leaves an asset to a beneficiary and there is a charge registered against
the asset to secure a debt owed by the testator. In the absence of any direction in the will, the
executor must determine whether:
• the estate is responsible for payment of the debt so that the beneficiary takes the asset
free and clear of the debt, or
• the beneficiary must take the asset along with the debt.
Examples of a debt secured against a property include:
• a mortgage (hypothec in Quebec) registered against real estate with the land title office
or registry where the mortgage was incurred to purchase the property;
• a mortgage (hypothec in Quebec) against real estate to secure a loan or line of credit for
other purposes, including making investments, renovations, or other purchases; or
• a charge or lien (hypothec in Quebec) registered against personal property with the
applicable personal property security registry where the security is provided for a debt or
loan incurred by the deceased for the purchase of the property (e.g. a motor vehicle) or
some other purpose.
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The general common law rule is that, subject to a contrary intention, if personal property is
subject to a debt, the estate must pay the debt.
Quebec: See article 739 CCQ that provides that the heirs (not the particular legatee) are
responsible for debts unless expressly provided otherwise by the testator. In addition, the legatee
by particular title will be liable for the debts of the deceased on the property bequeathed if the
other property in the succession is insufficient to pay the debts. However, the legatee by
particular title is only liable for the debts up to the value of the property he or she takes (para. 2,
art. 739 CCQ).
Some jurisdictions have reversed this rule by legislation.
British Columbia: Subject to a contrary intention, the charge will follow the asset if the debt
was incurred to purchase or improve the asset.36 Therefore if there is a mortgage against real
estate that was registered to secure a loan to carry out renovations, the mortgage need not be
discharged by the estate. However, if the mortgage secures a line of credit or a specific loan to
make investments or to purchase a vehicle, the estate must discharge the mortgage.
Alberta: If there is a mortgage on property that is the subject of a legacy, the debt follows the
property and the estate is not liable for the balance due unless there is a contrary intention in the
will or another document.37
7.10.2 Distribution of Specific Legacies

When the will gifts specific assets to a beneficiary, and there will be costs to deliver the asset, the
executor should review the will for instructions on who bears the transfer and/or delivery costs.
The general rule is that the beneficiary bears the burden of the cost. However, the terms of the
will often provide an instruction to the executor to deliver assets to beneficiaries. In many cases
this has been interpreted to mean that the estate bears the cost.
7.11 INTEREST ON LEGACIES

7.11.1 Common Law Only: Interest on Legacies
Generally, the executor has the executor year to administer an estate. Therefore, interest is not
due on specific legacies during this period. If the administration continues beyond a year,
depending on the circumstances, interest may be payable.38
There is an exception if the legacy is due to a minor who is an infant child of the testator, or the
testator is in loco parentis (in place of a parent) to the infant child. In these cases interest
generally runs from the date of death.39
36
Wills, Estates and Succession Act, S.B.C. 2009, c. 13, s. 47.
37
Estate Administration Act, S.A. 2014, c. E-12.5, s. 29.
38
Widdifield at para 5.1.7(a).
39
Widdifield at para 5.1.7(c).
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There are a number of additional rules and exceptions that may apply. These are beyond the
scope of this course.40
7.11.2 Quebec Only: Interest on Legacies

The effect of a legacy is that it entails the transmission of rights or property accessory to the
principal object of the legacy (art. 744 CCQ). See also articles 744 (para. 2), 745 and 746
regarding legacies of securities, immovables, and an enterprise.
This is reinforced by article 743 CCQ that provides that fruits and revenues from the property
accrue to the legatee from the opening of the succession to the time when the property is
distributed to the legatee. As a result, income earned on particular legacies from the date of death
to the time of distribution are payable to the legatees. See article 744 for specific examples of
how the rule in article 743 CCQ works. It is customary to provide in a will that cash bequests
bear no interest to avoid calculation and accounting difficulties.
7.12 RETURNING PRIOR GIFTS BEFORE CALCULATION OF

BENEFICIARY ENTITLEMENT (HOTCHPOT CLAUSES AND
RETURN)
From time to time a testator will have made a gift to a beneficiary before death and the will
requires that the value of that gift be taken into the calculation of how much the beneficiary will
receive from the estate.
Common Law Only: The common law refers to the clause in the will as a “hotchpot
clause”. The prior gift is considered an “advance” on the beneficiary’s entitlement.
Quebec Only: The “rules of return” are set out in articles 867 to 883 of the CCQ.
Article 867 requires each co-heir to return to the mass that which was received by gift or
will under an express obligation to return it. However a successor who renounces the
succession is under no obligation to return the gift.
For purposes of this section and the course, the clause in a will that requires that a gift be taken
into account (“returned” in Quebec) is called a “hotchpot clause”.
A hotchpot clause in a will provides for the executor to make an adjustment in the estate
distribution that accounts for property that passed to a beneficiary outside the estate. The
property may have been gifted prior to the testator’s death, or the gift may have resulted from a
designation in a registered plan or life insurance policy, or it may have arisen as a right of
survivorship in a property owned jointly with right of survivorship (outside of Quebec). The
objective of a hotchpot clause is to equalize the distribution among beneficiaries under a will.
A hotchpot clause can only adjust the share of any beneficiary to the extent that there are
sufficient assets in the estate to equalize the distribution.
40
For a detailed discussion of the rules and the exceptions, see Widdifield at para 5.1.7.
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Note that intestacy legislation in all provinces, except British Columbia, includes rules for
dealing with “advances” to a child.41
Manitoba: The advancement provisions on intestacy apply to advances to all intestate
successors.
Nova Scotia: The advancement provisions on intestacy apply to advances to a child or
grandchild.
Example of Applying the Hotchpot Rules:
Eva is a widow and has four children. Her youngest child, Daniel, asked her for financial
assistance. Eva gave Daniel $20,000 but wanted to ensure that when her estate is distributed,
this gift will be taken into account. If Eva’s will divides the residue of her estate equally among
her children, and the residue is $100,000, a hotchpot clause would ensure that when Eva’s estate
is distributed, each child will have received an equal amount. The final distribution to each child
is calculated as follows:
Value of residue for distribution: $100,000
Add Daniel’s gift for hotchpot calculation: $ 20,000
Total for distribution: $120,000
25% of the total available due to each child: $ 30,000
Adjust Daniel’s entitlement for $20,000 already received.

Daniel receives $30,000 less $20,000: $ 10,000
Distribution due to each of the remaining children (3*$30,000): $ 90,000
Total Distributed from the estate: $100,000
7.13 INTESTACY RULES

7.13.1 Introduction – When Intestacy Rules may Apply
Intestacy rules apply when a person dies without a will, the will is found to be invalid and there
is no prior will, or the will fails to dispose of some or all of the deceased’s estate.
Quebec Only: See articles 653 and 736 CCQ, which set out these rules.
Examples of a will that fails to dispose of some or all of the estate include:
• The will is silent on how to dispose of the residue.
41
The rules for Ontario are found in s. 25 of the Estates Administration Act, R.S.O. 1990, c. E.22.
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• Some or all of the beneficiaries have pre-deceased and there is no gift over to another
beneficiary.
• Residue is payable to a former spouse who is no longer entitled to take (see Chapter 3 at
3.4 Revocation of a Will).
• There is a finding of undue influence and the gift of residue fails (see Chapter 3 at 3.2
Requirements to Make a Valid Will).
7.13.2 General Rules

The intestacy rules are found in provincial or territorial legislation. (See Figure 7.3 Intestacy
Legislation by Jurisdiction.) The rules of each jurisdiction are very similar, but there are
differences.
Common Law Only: The general rules are as follows (See Figure 7.3 Intestacy Legislation by
Jurisdiction.
• If the deceased is survived by a spouse and no child(ren) or issue, then all goes to the
spouse.
• If the deceased is survived by a child(ren) or issue and no spouse, then all goes to the
child(ren) with representation to a deceased child’s issue.
• If the deceased is survived by a spouse and one or more child(ren) or their issue, one of
three possible scenarios apply:
o all goes to spouse; or
o subject to a preferential share in some jurisdictions, the spouse and child(ren)
share the remainder with representation to a deceased child’s issue; or
o the spouse and child(ren) share the remainder with representation to a deceased
child’s issue.
• If there is no spouse or child(ren), then the surviving parent(s) take.
• All Common Law Jurisdictions Except British Columbia and Alberta: If there is no
spouse, issue, or parent, the deceased’s sibling(s) will take with representation to a
deceased sibling’s child (i.e. nieces and nephews). If there are no siblings, nieces, or
nephews, the rules look to include more remote relations based on the degrees of kinship
which is best understood by referring to the table of consanguinity to find the next level of
relations of equal degrees of kinship who will then divide the estate (see Figure 7.4
Common Law Only: Table of Consanguinity, at the end of this Chapter).
• British Columbia and Alberta: British Columbia (in 2014) and Alberta (in 2012)
introduced a parentelic system for determining intestate beneficiaries. If there is no
surviving parent, the descendants of the parents will take (e.g. siblings of the deceased
with representation to their issue). Unlike the other jurisdictions, representation
continues beyond nieces and nephews. Students are referred to the legislation for details
on how to determine intestate heirs when there is no spouse, children, parents, or
siblings. (See also Figure 7.7 British Columbia and Alberta Only: Parentelic Distribution
Chart, for a chart illustrating the parentelic system).) ).
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Quebec Only: (See Figure 7.5 Quebec Only: Legal Devolution - Table of Relationships.)
• Where the deceased left a spouse and descendants, the spouse will take one-third of the
succession and the descendants the other two-thirds (art. 666 CCQ).
• Where there is no surviving spouse, the entire succession devolves to the descendants
(art. 667 CCQ). If the descendants are all in the same degree, they share in equal
portions by heads. If there is representation (e.g. a descendant has pre-deceased) the
descendants share by roots. See articles 668 and 669 regarding representation.
• In the absence of descendants:
o The surviving spouse will take the entire succession if the deceased was not
survived by his or her mother or father (called “privileged ascendants”; see art.
670 CCQ) or brothers and sisters (called “privileged collaterals”; see art. 671
CCQ)
o If there is a spouse and no privileged ascendants, two-thirds of the succession
devolves to the deceased’s surviving spouse and one-third to the brothers and
sisters and their descendants (art. 673 CCQ).
o If there is also no surviving spouse, the succession is partitioned equally between
the privileged ascendants and the privileged collaterals (art. 674 CCQ). If there
are no privileged ascendants, the privileged collaterals inherit and vice versa.
(arts. 675 and 676 CCQ).
• In the absence of a surviving spouse, descendants, privileged ascendants, and privileged
collaterals, the ordinary ascendants and collaterals are called to the succession (see arts.
677-683 CCQ). Relatives beyond the eighth degree do not inherit (see also arts. 655-659
CCQ for definitions of degree and relationship).
• If the deceased leaves no spouse or relatives within the degrees of succession, or if all the
successors have renounced to the succession, the State (the Ministère du revenu) takes
the property of the estate situated in Quebec (see arts. 696 & ff CCQ).
Study Note: Students are responsible for knowing the rules of their jurisdiction as
they apply up to and including when there is no spouse, child, or parent and the
deceased is survived by siblings or their issue. These rules are reviewed more
specifically in the sections that follow.
A quick reference summary of these rules can be found in Figure 7.8 Common Law
Only: Spousal Preferential Share and Division of Property Between Spouse and Children
(by Jurisdiction) and Figure 7.9 Intestacy Rules Where there is No Spouse or Issue (by
Jurisdiction) at the end of this Chapter. See also Figure 7.6 All Students - Another View
of Relationships, Consanguinity and Affinity.
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7.13.3 Rights of Common-law Spouses on Intestacy

Generally same-sex couples in Canada are treated identically to couples of the opposite sex,
whether married (or, in Quebec, in a civil union) or in a common-law relationship. However, the
status of common-law spouses for purposes of the intestacy rules differ between jurisdictions. 42
Ontario, New Brunswick, Prince Edward Island, and Newfoundland and Labrador:
Common-law spouses are not entitled to distribution on intestacy.
Quebec and Nova Scotia: Common-law spouses are not entitled to distribution on intestacy.
However, surviving partners may inherit if they have entered into a civil union in Quebec, or as
a domestic partnership in Nova Scotia.
British Columbia, Alberta, Saskatchewan, Manitoba, Northwest Territories, the Yukon,
and Nunavut: Common-law spouses are recognized for the purpose of intestate distribution.
For purposes of these jurisdictions, the definition of common-law spouse is defined as set out in
the legislation (see Figure 7.10 Definition of Spouse and Common-law Spouse for Purposes of
Intestacy Succession (by Jurisdiction)).
7.13.3.1 Denial of Spousal Entitlement on Breakdown of the Spousal or

Common-law Relationship
In a number of jurisdictions, a married or common-law spouse may be disentitled to a
distribution on intestacy as a result of one or more of the following
Common Law Only: These rules are:
• separation for a certain period of time,
• application for divorce,
• division of property or application for division of property under the jurisdiction
or agreement with respect to division of property
• living separate and apart, and/or
• separated and living in a conjugal relationship with another person.
Quebec Only: Disentitlement only occurs if there has been a divorce; de facto
spouse is always disentitled.
For the criteria for determining whether the relationship has ended, see Figure 7.11 When
a Spouse is Not Entitled on an Intestacy.
7.13.3.2 Division of Intestate Estate Among Children and Issue

Common Law Only: Where child(ren) or issue are entitled to a distribution on
intestacy, the general rule is that the portion of the estate to which child(ren) or other
42
When considering a common-law partner’s rights it is necessary to consider family law legislation as well, which
is reviewed in CETA 2.
7-47
issue are entitled is divided among the issue of the intestate on a per stirpes basis except
in Manitoba and Ontario.
The exceptions to a per stirpes distribution to issue in Manitoba and Ontario are
complex. See Figure 7.12 Manitoba and Ontario Only: Distribution on Intestacy to Issue
– Special Rules, at the end of the Chapter for a review of the rules and an example.
Quebec Only: Descendants in the same degree who are called in their own right share
in equal portions and by heads. If there is representation, they share by roots (art. 668
CCQ).
7.13.4 Partial Intestacy

Generally the courts will interpret a will so as to avoid intestacy wherever possible. Presumably,
if a testator took the time to make a will, the testator did not intend to die intestate. Therefore,
there is a presumption against intestacy when interpreting a will. However, this will not always
be sufficient to save the gift.
Example: A will provides for the residue to go to two friends, Tom and Kevin. Both die before
the testator and there is no gift over. Tom and Kevin are friends of the deceased, so the anti-
lapse rules do not apply. Because they take the residue of the estate, the gift under the will fails
and the property that is the subject of the gift can only be distributed as on an intestacy.
7.14 BENEFICIARIES CANNOT PROFIT FROM THEIR CRIME

It is well established law that an individual cannot profit from his or her crime. As a result, a
spouse who is convicted of murdering the deceased will not share on intestacy and will be
disentitled to benefit under the will of the deceased.
Quebec Only: A person convicted of making an attempt on the life of the deceased is unworthy
of inheriting by operation of law (art. 620 CCQ). See also articles 621-624 CCQ.
7.15 ESTATE DISTRIBUTION CONSIDERATIONS

Distribution considerations were addressed earlier (see Chapter 5 Estate Assets), and are
addressed further (see Chapter 10 Estate and Trust Accounts). However, some issues also arise in
the context of the beneficiaries themselves. These are reviewed briefly below.
7.15.1 Timing of Distributions

Common Law Only: Although the executor has the executor’s year to administer and distribute
the estate, some distributions occur before the administration is complete.
Quebec Only: Prior to distribution, the inventory is communicated by the liquidator to the heirs,
the successors who haven’t yet exercised their option, the legatees by particular title and the
known creditors (art. 796 CCQ), the closure of inventory is published on the RDPRM and a
notice of closure is published in a local newspaper (art. 795 CCQ). See also Chapter 6 Estate
Liabilities and Claims Against the Estate and Chapter 10 Estate and Trust Accounts.
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The rules governing distributions where the estate is manifestly solvent are found in articles 807
to 809. If the estate is not manifestly solvent, article 810 CCQ prohibits payment of debts or the
legacies by particular title until sixty days from the registration of the notice of closure of the
inventory.43
A general discussion follows.
7.15.1.1 Considerations Before Distributing Assets

Prior to making a distribution of legacies, or a share of the residue, the executor must be
satisfied that all debts, including tax liabilities, have been identified and quantified, and
that the time limits for claims by spouses, dependants, or intestate heirs wishing to
challenge a will have expired. It is then possible to consider transferring assets that are
subject to specific bequests, and payment of cash legacies.
Depending on the size of the estate and the value of the specific/particular legacies,
clearance certificates (partial or full) or authorization to distribute from the tax authorities
may also be required before distributing. The decision will depend on the estimated tax
liabilities and the value of the residue. Corporate trustees will have their own guidelines.
Next, the executor should consider whether there are assets that form part of the residue
that cannot or should not be sold. For example:
• The market for an asset may be particularly poor, or there may be no buyers.
• It may not be appropriate to sell an asset with a significant unrealized capital gain
in a spousal trust.
The executor will want to transfer the asset to the beneficiary(ies) or testamentary trust as
soon as possible if there are any risks that the asset could decline in value or require a
speedy or urgent response. Assets most at risk may include business assets, real estate
property, or high-risk investments.
Subject to dealing with risky or wasting assets, once legacies are paid and bequests are
transferred, the executor may wish to consider an interim distribution to the residuary
beneficiaries. This usually occurs once the final date-of-death tax return has been filed
and the executor has sufficient information to be satisfied that there is no outstanding risk
of liability for further tax. Where the risk is limited, an interim distribution may be
considered.
Where the deceased died intestate, the law of the jurisdiction may prohibit a distribution
before a period of time has expired. Depending on the jurisdiction, the period can be up
to one year.44
43
Art. 810 does authorize payment of ordinary public utility bills and debts in urgent need of payment before expiry
of the 60 days if circumstances require it.
44
For example, both Ontario and British Columbia have a one-year waiting period.
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7.15.1.2 Cash Versus In Kind Distributions

There are a number of rules and viewpoints on whether or not and when distributions of
residue should be made in cash or in kind.
Common Law Only: The default rule is that estate assets should be liquidated and
beneficiaries should be paid their entitlement in cash.
Quebec Only: The liquidator only liquidates the property of the estate to the extent
necessary to pay the debts and particular legacies (see art. 804 CCQ).
Cash distributions may be the most practical approach and minimize the executor’s
liability for loss to the asset(s) pending distribution. Or, assets may need to be sold to pay
certain debts and legacies.
The decision to sell, and what to sell, requires a number of considerations. Examples
include:
• If the assets are to be distributed to a spouse or a spousal trust under the Income
Tax Act and there is an unrealized capital gain, an in kind distribution will allow
the taxes due to be deferred.
• The timing for a sale may not be appropriate
Quebec Only: Note that article 1342 CCQ allows the liquidator to maintain
existing investments.
• There are only a small number of beneficiaries and there is a reason for
transferring the assets to the beneficiary.
Other considerations may include:
• If there is a continuing trust, are the investments appropriate for the trust?
• Is the continuing trust a spousal trust or is the beneficiary the spouse? If so, a sale
may trigger tax on capital gains that could have been deferred. The asset should
only be sold if it is not an appropriate investment.
• Are the beneficiaries in Canada? If not, the beneficiaries may need tax advice
before a decision to distribute in kind is made.
• The risks of market downturn pending the date when a distribution can be made.
7.15.1.3 Release and Discharge

When the beneficiary’s entitlement is paid, the executor should ensure that the
beneficiary signs a release and discharge that acknowledges receipt and confirms that
there are no further claims from the estate.45 When the beneficiary only receives a cash
legacy or a bequest, the release should be sought at the time of payment or delivery.
45
A Release may include an indemnity. See also Chapter 10 Estate and Trust Accounts.
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A release is generally sought from residuary beneficiaries once the distribution is

complete, and the compensation and accounts are approved. (See Chapter 10 Estate and
Trust Accounts.) When there has been an interim distribution, a release or other form of
acknowledgement should be obtained. Practices will depend on the amount and nature of
the distribution.
Quebec Only: Once the liquidation is complete, the liquidator is discharged from office
when the heirs accept the liquidator’s final accounting (see arts. 819-822 CCQ).
7.16 BENEFICIARIES WHO ARE MENTALLY INCAPABLE

Where there is no will, or the will does not provide a trust for a minor or incapable beneficiary,
the executor must determine where to pay the beneficiary’s interest.
Common Law Only: Earlier, we noted that if there is a minor or incapable beneficiary, notice
of an application for a grant must be delivered to the applicable public official (see Chapter 4
Initial Stages of an Estate Administration).
7.16.1 Legal Representatives for Adults

If the adult has a property guardian or has appointed an attorney under an enduring power of
attorney,46 the executor may pay the adult beneficiary’s entitlement to the legal representative. If
there is no legal representative with the necessary authority over the adult’s financial affairs, it
may be necessary for someone to be appointed as a property guardian unless the adult has the
required capability to make an enduring power of attorney (or representation agreement in
British Columbia).
Alternatively, most jurisdictions provide that the funds may be paid into court.
7.16.2 Legal Representatives for Minors

Most wills contain a standard clause creating a trust for beneficiaries who are under the age of
majority. The trust often permits the trustee to pay distributions to the child’s guardian or to third
parties for the benefit of the minor.
Where there is no will, or the will does not establish a trust, the executor will be required to
comply with the provincial or territorial laws. The provincial official (usually the Public
Guardian and Trustee, the Public Trustee, or the Children’s Lawyer in Ontario) has responsibility
for safeguarding the interests of minors. These officials may become involved in overseeing the
administration of the estate to ensure minor beneficiaries’ interests are protected. In most
provinces, the inheritance will be required to be paid into Court or to the Public Trustee.
Quebec Only: Parents of minor children are their tutors by operation of law (art. 192 CCQ). If
the property bequeathed to a minor is worth more than $25,000, the liquidator of the succession
makes a declaration to the Public Curator of Quebec (art. 217 CCQ).
46
See Generic Terms Cheat Sheet for the title in your jurisdiction.
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7.17 DISTRIBUTION TO CHARITABLE ORGANIZATIONS (NON-

PERSONS)
When distributing to an organization it will be necessary to ensure that the payment is
acknowledged by an officer with authority to acknowledge the receipt and give a discharge.
Typically this will be the treasurer or another party identified by the charity.
7.18 WHEN A BENEFICIARY CANNOT BE FOUND

When a beneficiary cannot be found the executor will need to determine the next steps. Every
situation will depend on the facts. While every effort needs to be made to locate a beneficiary or
an intestate heir, some jurisdictions have additional legislation that may assist in bringing closure
to the administration.
7.18.1 Missing Persons

Where there is reason to believe that a person is missing, a person may apply to court to have a
person declared missing and to be appointed to manage the missing person’s financial affairs.
The role is similar to a property guardian. The executor may be able to pay to the person
appointed to manage the affairs.
Quebec Only: See the provisions regarding absentees and the appointment of a tutor for their
property at articles 84 & ff. CCQ.
7.18.2 Presumption of Death

Where a beneficiary is missing but there is reason to believe that the person may be dead, it may
be possible to apply to have a person judicially declared dead. The declaration by the court will
also establish the date of death. The applicant may also be appointed to administer the person’s
estate. In this case an executor will either pay the person’s entitlement to the person
administering the estate, or treat the person as having pre-deceased.
See Figure 7.13 Legislation Governing Missing Persons and Presumption of Death by
Jurisdiction, at the end of this Chapter, for a table that identifies the legislation that applies to
missing persons and presumption of death. Students are not responsible for the details of this
legislation.
Quebec Only: It is possible to obtain a declaratory judgment of death seven years after the
person has disappeared or sooner, if it is certain that the person has died but no attestation of
death can be drawn up (arts. 92 & ff. CCQ).
7.18.3 When No Beneficiaries Can be Found

If there are no beneficiaries to be found under the will, or under an intestacy, the intestacy laws
provide that the deceased’s estate will be paid to the government.
Common Law Only: The term used is “escheat to the Crown” and the assets are paid to the
provincial government.
7-52
Quebec Only: The deceased’s estate devolves of right to the Quebec government with respect to
property situate in Quebec (see arts. 696-702 CCQ).
7-53
Figure 7.1: Common Law Only: Gifts that Fail - Anti-lapse Rules by Jurisdiction
Jurisdiction Legislation Anti-lapse Rule

British Wills, Estates If a gift cannot take effect for any reason, including that
Columbia and Succession a beneficiary pre-deceases the will-maker, priority goes
Act, S.B.C. to:
2009, c. 13, s. a) The alternative beneficiary
46 b) If the beneficiary was a brother, sister or
descendant (issue) of the will-maker, to the
descendants of the beneficiary as if the beneficiary
died intestate
c) The surviving residuary beneficiaries in proportion
to their interests
Alberta Wills and If a gift cannot take effect because the beneficiary died
Succession Act, before the testator, the distribution is:
S.A. 2010, c. W- a) To the alternate beneficiary
12.2, s. 32 b) If the beneficiary was a descendant (issue) of the
testator, to the descendants as if the beneficiary died
without leaving a spouse or adult interdependent
partner
c) To the surviving residuary beneficiaries in
proportion to their interests
d) To the testator’s intestate heirs
S. 31 also provides that if a gift is to the issue of the
deceased or another person, and a member of the class
pre-deceased, that member’s issue will take.
Saskatchewan The Wills Act , If the beneficiary is a child, other issue, brother or
1996, S.S. 1996, sister of the deceased, as an individual or a member of
c. W-14.1, s. 22 a class, and leaves a spouse or issue living at the date of
death of the testator, the gift takes effect as if the
beneficiary had died intestate, without debts, except
that a surviving spouse does not receive the preferential
share.
Manitoba The Wills Act, If the beneficiary is a child, other issue, brother or
C.C.S.M., c. sister of the deceased, as an individual or a member of
W150, s. 25.2 a class, and leaves issue living at the date of death of the
testator, the gift takes effect as if the beneficiary had
died intestate, without a spouse and without debts.
7-54

Ontario Succession Law If the beneficiary is a child, grandchild, brother or
Reform Act, sister who died before the testator leaving a spouse or
R.S.O. 1990, c. issue surviving, the gift to the beneficiary is paid to the
S.26, s. 31 spouse and/or issue of the pre-deceased beneficiary as if
the beneficiary died intestate and without debts, except
that surviving spouse does not receive the preferential
share.
New Wills Act, If the beneficiary is a child, other issue, brother or
Brunswick R.S.N.B. 1973, sister of the deceased, as an individual or a member of
c. W-9, s. 32 a class, and leaves issue living at the date of death of the
died intestate, without a spouse and without debts.
Newfoundland Wills Act, If the beneficiary is a child, other issue of the deceased,
and Labrador R.S.N.L. 1990, as an individual or a member of a class, and leaves
c. W-10, ss. 18- issue living at the date of death of the testator, the gift
19 takes effect as if the beneficiary had died intestate, and
without debts, except that surviving spouse does not
receive the preferential share.
If the beneficiary is a brother or sister, as an
individual or as a members of a class, and leaves a
child or children, the beneficiary’s share is paid to the
child or children in equal shares.
Nova Scotia Wills Act, If the beneficiary is a child or issue of the testator and
R.S.N.S. 1989, dies during the testator’s lifetime leaving issue alive at
c. 505, s. 31 the date of the testator’s death, the gift takes effect. The
effect of this provision is that the gift is paid to the
deceased beneficiary’s estate to be distributed in
accordance with the will, or if there is no will, in
accordance with the applicable intestacy rules.
Prince Edward Probate Act, If the beneficiary is a child or other issue, the gift passes
Island R.S.P.E.I. 1988, to the deceased beneficiary’s issue by stocks as if the
c. P-21, s. 85 beneficiary died intestate with only the issue
surviving.
Yukon Wills Act, If the beneficiary is a child, other issue, brother or
R.S.Y. 2002, c. sister of the deceased, as an individual or a member of
230, s. 20 a class, and leaves issue living at the date of death of the
died intestate and without debts.
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Wills Act, If the beneficiary is a child, other issue, brother or

Northwest
R.S.N.W.T. sister of the deceased, as an individual or a member of
Territories
1988, c. W-5, s. a class, and leaves issue living at the date of death of the
21 testator, the gift takes effect as if the beneficiary had
Nunavut Wills Act, If the beneficiary is a child, other issue, brother or
R.S.N.W.T. sister of the deceased, as an individual or a member of
(Nu) 1988, c. a class, and leaves issue living at the date of death of the
W-5, s. 21 testator, the gift takes effect as if the beneficiary had
7-56
Figure 7.2: Quebec Only: Consequences of Failed Will or Legacy by Lapse, Nullity,
Revocation
Type of Scenarios: Accretion/

Failed Will contains a… Devolution to
Legacy Intestate Succession
Legacy by General Title Universal Legacy
(GT) (UL)
PL of a No GT No UL Intestate succession
specified thing
OR
e.g. I give my
automobile to GT of a universality which UL UL
X does not correspond to failed
legacy
(e.g. I give my immovables
to Y)
GT of a universality which UL or no UL GT
corresponds to failed legacy
e.g. I give my movables to Y
GT of an aliquot share No UL Aliquot shares between
e.g. I give 1/3 of my GT and intestate
property to Y succession
UL Aliquot shares between
GT and UL
Several GTs of aliquot UL or no UL Aliquot shares between
shares GTs
(e.g. I give 1/3 of my
property to Y and 2/3 to Z)
GT With or without other GTs No UL Intestate succession
e.g. I give all UL UL
my movables
UL With or without GT N/A Intestate succession
(e.g. I give the
residue of my
estate)
7-57
Figure 7.3: Intestacy Legislation by Jurisdiction

Jurisdiction Legislation
British Columbia Wills, Estates and Succession Act, S.B.C. 2009, c. 13, Part 3
Alberta Wills and Succession Act, S.A. 2010, c. W-12.2, Part 3
Saskatchewan Intestate Succession Act, S.S. 1996, c. I-13.1
Manitoba Intestate Succession Act, C.C.S.M.,c.I85
Ontario Succession Law Reform Act, R.S.O. 1990, c. S.26, Part II
Quebec CQQ, Articles 666-683
New Brunswick Devolution of Estates Act, R.S.N.B. 1973, c. D-9
Newfoundland and Labrador Intestate Succession Act, R.S.N.L. 1990, c. I-21
Nova Scotia Intestate Succession Act, R.S.N.S. 1989, c. 236
Prince Edward Island Probate Act, R.S.P.E.I. 1988, c. P-21, Part IV
Yukon Estate Administration Act, R.S.Y. 2002, c. 77, Part 10
Northwest Territories Intestate Succession Act, R.S.N.W.T. 1988, c. I-10
Nunavut Intestate Succession Act, R.S.N.W.T. 1988, c. I-10 (Duplicated for Nunavut)
7-58
Figure 7.4: Common Law Only: Table of Consanguinity
Source: Wikipedia, December 15, 2014 at:

http://en.wikipedia.org/wiki/Consanguinity#mediaviewer/File:Table_of_Consanguinity_showing_degrees_of_relati
onship.png
7-59
Figure 7.5: Quebec Only: Legal Devolution – Table of Relationships

First Order
Articles of CCQ: 666 667
668(1)
669
Spouse 1/3 x See 2nd order
Descendants* 2/3 100% x
Second Order
Articles of 674(2) 674(2)
CCQ: 674(1) 672 675 673 676(1) 677 671
Spouse X 2/3 X 2/3 x x 100%
670(1)
Privileged ½ 1/3 100% x x x x
Ascendants**
670(2)
Privileged ½ - X 1/3 100% x x
Collaterals***
See 3rd
order
Third Order
Articles of CCQ: 678(1) 678(2) 678(2) 653
696
Descendants of 1/2 100% x x
privileged collaterals
Ascendants and 1/2 x 100% x
collaterals
State 100%
* Children, grandchildren, great-grandchildren

** Father, mother – 670(1) CCQ
*** Brothers, sisters and their children in the first degree – 670(2) CCQ
This table provided courtesy of Marilyn Piccini-Roy TEP, Ad.E.
7-60
Figure 7.6: All Students – Another View of Relationships, Consanguinity, and Affinity
The chart below sets out an alternative visualization of the table of consanguinity.
Source:
http://www.uab.edu/humanresources/home/images/M_images/Relations/PDFS/FAMILY%20MEMBER%20CHART.pdf
University of Alabama UAB HR Mar 21, 2015
7-61
Figure 7.7: British Columbia and Alberta Only: Parentelic Distribution Chart
Source: Alberta Ministry of Justice, accessed June 2018, at:

http://justice.alberta.ca/programs_services/wills/Publications/ParentelicDistributionChart.aspx
7-62
Figure 7.8: Common Law Only: Spousal Preferential Share and Division of Property
Between Spouse and Children (by Jurisdiction)
In all common law jurisdictions, if the intestate dies leaving a spouse and no child or issue, the
spouse is entitled to the estate. However, if the deceased leaves a spouse and one or more
children, or issue of a pre-deceased child, the estate is usually shared between the spouse and
child(ren) or their issue.
Many jurisdictions also provide a “preferential share” to the spouse and some jurisdictions
provide certain rights with respect to the matrimonial home and/or property.
Subject to legislation providing otherwise, a spouse is generally understood to be a person
married to another person, including same-sex marriages. However, common-law relationships
require specific recognition in the applicable legislation before they are recognized under
intestacy law.
At least one jurisdiction in Canada has an exception, or rule, addressing one of the foregoing
rules.
This table seeks to summarize the rules in each jurisdiction where an intestate person leaves a
spouse (a person to whom he or she is legally married), a recognized common-law spouse (where
applicable), and at least one child or more remote descendant of a pre-deceased child.
The rules have become increasingly complex to summarize in a table such as this. While the
rules are often very similar across jurisdictions, there are differences. Some differences are
limited to terminology (e.g. “per stirpes” versus “by stocks”). However, others can be
substantive and will lead to very different entitlements for spouses, common-law spouses, and
children or issue.
This table and other tables in this Chapter seek to offer a quick snapshot of the rules in each
jurisdiction. The table below summarizes the rules where an intestate leaves a spouse and at least
one child or other issue. Students are referred to the legislation for full details. See also Figure
7.10 Definition of Spouse and Common-law Spouse for Purposes of Intestacy Succession (by
Jurisdiction), for definition of spouse where the definition includes common-law relationships.
See Figure 7.11 When a Spouse is Not Entitled on an Intestacy, for rules that may determine
when a separate surviving spouse is no longer eligible to receive under an intestacy.
Legislation to note:
• Definition of Spouse:
o Ontario, New Brunswick, Prince Edward Island, and Newfoundland and
Labrador: Common-law spouses are not recognized for purposes of an intestate
distribution.
o Nova Scotia: Common-law spouses are not entitled to distribution on intestacy.
However, surviving partners may inherit if they registered as a domestic partnership.
o British Columbia, Alberta, Saskatchewan, Manitoba, Northwest Territories, the
Yukon, and Nunavut: Common-law spouses (as defined by each jurisdiction) are
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recognized for the purposes of intestate distribution. See Figure 7.10: Definition of
Spouse and Common-Law Spouse for Purposes of Intestate Succession (by
Jurisdiction)
• Disqualification of a Spouse’s Entitlement:

Where a couple has not terminated their relationship by divorce or another legal act,
questions may arise as to whether or not the surviving spouse is entitled. Many jurisdictions
have addressed this situation. See Figure 7.11 When a Spouse is Not Entitled on an Intestacy
for the rules which disqualify a spouse on intestacy.
• Multiple Spouses:
Three jurisdictions have specifically recognized the situation where there may be more than
one spouse:
o British Columbia: Where there are two or more spouses, they share the spousal
share in the portions agreed or as determined by the court (see s. 22 of Wills, Estates
and Succession Act).
o Alberta: Where there is a spouse and an adult interdependent partner, if there are no
descendants the estate is shared equally. If there are descendants, the preferential
share is shared equally by the spouse and the adult interdependent partner (see s. 62
of Wills and Succession Act).
o Manitoba: If there is a spouse and a common-law partner at the time of death, the
person whose relationship is most recent has priority (see s.3(3) of The Survivorship
Act for full details).
Study Note: For study and examination purposes, students are only required to be
familiar with the rules as detailed in summaries provided in this Chapter.
Jurisdiction Preferential Share Spouse1 and One Spouse1 and Matrimonial Home
for Spouse1 Child Children and/or Property2
British $300,000 if 1/2 to spouse See rules for spouse to
Columbia deceased’s 1/2 to descendants (child with purchase home from
descendants are representation to issue) (see s. 24) estate
descendants of (ss. 26-33)
deceased and spouse
Otherwise $150,000
Alberta n/a if descendants If descendants are descendants of deceased n/a. However, see rights
are also and the spouse or adult interdependent of a married person to
descendants of partner, all to spouse or adult life estate in the
surviving spouse or interdependent partner. homestead and personal
adult Otherwise, after preferential share, property of the deceased
interdependent remainder to child with representation to under the Dower Act,
partner descendants (see s. 66) R.S.A. 2000, c. D-15,
Otherwise $150,000 ss. 18-23
(per Regulation)
7-64
Saskatchewan $100,000 1/2 to spouse 1/3 to spouse n/a
(for deaths after June 1/2 to child per 2/3 to children per
22, 1990) stirpes stirpes
Manitoba n/a If the issue of the deceased are also the issue Rights are in addition to
of the spouse, all to the spouse. rights to a life interest in
Otherwise the greater of $50,000 and 1/2 of the family home under
the estate to the spouse (s. 2) the Homesteads Act,
The remainder to the issue per capita at each C.C.S.M., c. H80
generation. See ss. 4-5 and Figure 7.9
Intestacy Rules Where there is No Spouse or
Issue (by Jurisdiction), for example of
distribution to issue of a pre-deceased child.
Ontario $200,000 1/2 to spouse 1/3 to spouse See also rights under
(per Regulation) 1/2 to child 2/3 to children Family Law Act, R.S.O.
If child pre-deceased leaving issue, to the 1990, c. F.3
child’s issue equally among his or her issue
who are of the nearest degree in which there
are issue surviving.
See ss. 4-5 and Figure 7.9 Intestacy Rules
Where there is No Spouse or Issue (by
Jurisdiction), for example of distribution to
issue of a pre-deceased child.
New n/a 1/2 to spouse 1/3 to spouse See Marital Property Act,
Brunswick However, spouse is (widow) (widow) S.N.B. 2012,
entitled to marital 1/2 to child per 2/3 to children per c. 107
property. stirpes stirpes
Newfoundland n/a 1/12 to spouse 1/3 to spouse n/a
and Labrador 1/2 to child per 2/3 to children per
stirpes stirpes
Nova Scotia $50,000 1/2 to spouse 1/3 to spouse Spouse may elect to take
1/2 to child per 2/3 to children per spousal home in lieu or
stirpes stirpes as part of preferential
share. Includes
household furnishings (s.
4 Intestate Succession
Act)
Prince Edward n/a 1/2 to spouse 1/3 to spouse n/a
Island 1/2 to child per 2/3 to children per
stirpes (by stocks) stirpes (by stocks)
Yukon $75,000 1/2 to spouse 1/3 to spouse Family home held in trust
1/2 to child per 2/3 to children per for spouse if not
stirpes stirpes otherwise received as
part of share; household
furnishings go to spouse
(s. 92)
See Part 8 (s. 74) for
common-law spouse
rights to apply for an
allowance
7-65
Northwest $50,000 1/2 to spouse 1/3 to spouse Spouse may elect to take
Territories 1/2 to child per 2/3 to children per spousal home in lieu of
stirpes stirpes preferential share or as
part of preferential
share. Includes
household furnishings (s.
2(5))
Nunavut $50,000 Share equally 1/3 to spouse Spouse may elect to take
2/3 to children spousal home in lieu of
preferential share or as
part of preferential
share. Includes
household goods and
furnishings (s. 2(5))
1
See Figure 7.10 Definition of Spouse and Common-law Spouse for Purposes of Intestacy Succession (by
Jurisdiction), for definitions of spouse or other relationships recognized for purposes of intestate succession law
2
These rules will be reviewed in CETA 2 as part of a more thorough review of spousal rights on death.
7-66
Figure 7.9: Intestacy Rules Where there is No Spouse or Issue (by Jurisdiction)
Where there is no spouse, the estate will be distributed to the children or to their issue using a per stirpes
distribution. Manitoba and Ontario have altered the distribution slightly. See Figure 7.12 Manitoba and Ontario
Only: Distributions on Intestacy to Issue – Special Rules
This table summarizes the rules when there are no spouse or issue. Students are referred to the legislation for full
details.
No Spouse, Issue, Parents,

Jurisdiction No Spouse or Issue No Spouse, Issue, or Parents
Siblings, or Issue of Siblings
British Columbia To the intestate’s To the descendants of the See legislation for parentelic
parents in equal shares parent(s) (with representation) distribution rules
or to the survivor (s. 23) (see s. 24)
Alberta To the intestate’s To the descendants of the See legislation for parentelic
parents in equal shares parent(s) (with representation) distribution rules
or to the survivor (s. 67) (see s. 67)
Saskatchewan To the intestate’s To the brothers and sisters in If no siblings, nieces or
parents in equal shares equal shares with nephews, to next of kin
or to the survivor (s. 9) representation to their children (ss. 12 -13)
(s. 10)
Manitoba To the intestate’s To the issue of the parents per See s. 4(5)-(6) for distribution
parents in equal shares capita at each generation to paternal and maternal
or to the survivor (ss. 4(4) & 5) grandparents or their issue;
(s. 4(3)) and then to great-
grandparents or their issue
Ontario To the intestate’s To the brothers and sisters in If no siblings, nieces or
parents in equal shares equal shares with nephews, distribute among
or to the survivor representation to their children the next of kin of equal
(s. 47(3)) (s. 47(4)) degree of consanguinity to
the intestate equally without
representation (s. 47(6))
Quebec Equally to the privileged To privileged collaterals (art. To ordinary ascendants and
ascendants and 674, para. 2 CCQ) collaterals not beyond the
privileged collaterals eighth degree (arts. 677 & ff.
(art. 674, para. 1 CCQ) CCQ).
New Brunswick To the intestate’s To the brothers and sisters in If no siblings, nieces or
or to the survivor (s. 25) representation to their children the next of kin of equal
(s. 26) degree of consanguinity to
representation (s. 28)
Newfoundland To the intestate’s To the brothers and sisters in If no siblings, nieces or
and Labrador parents in equal shares equal shares with nephews, distribute among
(ss. 8-9) degree of consanguinity to
7-67
No Spouse, Issue, Parents,

Jurisdiction No Spouse or Issue No Spouse, Issue, or Parents
Siblings, or Issue of Siblings
Nova Scotia To the intestate’s To the brothers and sisters in If no siblings, nieces or
Prince Edward To the intestate’s To the brothers and sisters in If no siblings, nieces or
Island parents in equal shares equal shares with nephews, distribute among
Yukon To the intestate’s To the brothers and sisters in If no siblings, nieces or
or to the survivor (s. 83) representation to their children the next of kin (s. 86)
(ss. 84-85)
Northwest To the intestate’s To the brothers and sisters in If no siblings, nieces or
Territories parents in equal shares equal shares with nephews, distribute among
or to the survivor (s. 5) representation to their children the next of kin (s. 7)
(s. 6)
Nunavut To the intestate’s To the brothers and sisters in If no siblings, nieces or
or to the survivor (s. 5) representation to their children the next of kin, distribute
(s. 6) equally among the
next of kin of equal degree of
consanguinity to the intestate
and those who legally
represent them (s. 8)
7-68
Figure 7.10: Definition of Spouse and Common-Law Spouse for Purposes of Intestate
Succession (by Jurisdiction)
Generally, the term “spouse” is understood to mean a person married to another person,
including same-sex marriages. In many jurisdictions and for purposes of many different legal
rules, common-law relationships are also recognized. However, in order to be recognized, they
must be defined. For purposes of intestacy laws, only seven jurisdictions have defined spouse to
include a common-law spouse or otherwise recognized the relationship.
British Columbia, Saskatchewan, Manitoba, Yukon, Northwest Territories, Nunavut:
These six jurisdictions provide a definition of “spouse” that applies for purposes of intestate
succession rules. The definitions include a definition of a “common-law spouse”. These
definitions are included in this table.
Alberta: Alberta legislation specifically recognizes adult interdependent partners (AIPs) for
purposes of intestate distributions. However, an AIP is not included in the definition of
“spouse”.
Ontario: The Succession Law Reform Act includes a definition of spouse for purposes of the
Act. The definition does not include common-law relationships. The definition is included in this
table. However, it is important to note that the Act includes a unique definition of “spouse” for
purposes of Part V of the Act, which addresses the rights of support for dependants where there
is a will or on intestacy. This definition includes common-law spouses.
New Brunswick, Newfoundland and Labrador, Nova Scotia, Yukon: The legislation in these
provinces refer to a “spouse” of the intestate. The legislation does not define spouse and, as a
consequence, does not recognize common-law relationships for purposes of the intestate
succession laws. However, common-law spouses may have rights under dependant relief
legislation or family law legislation. (See Chapter 6 at 6.4 Rights of Spouses and Dependants,
and see Figure 6.4 Common Law Jurisdictions: Deadlines for Making a Dependant Relief
Claim. These rights are also reviewed further in CETA 2.)
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Jurisdiction Definition of Spouse*

*All section references are to the legislation listed in Figure 7.3: Intestacy Legislation
by Jurisdiction
Intestacy Legislation by Jurisdiction, unless otherwise noted.
British Columbia “Spouse” is a person married to the deceased or who has lived with the deceased in a
marriage-like relationship for at least two years (s. 2(1)).
Alberta “Spouse” means the spouse of a married person (Interpretation Act, R.S.A. 2000, c. I-
8, s. 28(zz.1).
Alberta law also recognizes an “adult interdependent partner” (AIP) as a distinct
relationship. An AIP is not included in the definition of “spouse”. An AIP is defined in
the Adult Interdependent Relationships Act, S.A. 2002, c. A-4.5, as a person who has:
(a) lived with the other person in a relationship of interdependence
(i) for a continuous period of not less than 3 years, or
(ii) of some permanence, if there is a child of the relationship by birth or adoption,
or
(b) entered into an adult interdependent partner agreement with the other person
under section 7.
(2) Persons who are related to each other by blood or adoption may only become
adult interdependent partners of each other by entering into an adult interdependent
partner agreement under section 7.
Saskatchewan “Spouse” means the legally married spouse of the intestate, or a person who
cohabited with the intestate continuously for a period of not less than two years and
at the time of death was continuing to cohabit or had ceased to cohabit within the 24
months before the intestate’s death (s. 2).
Manitoba A spouse is a married person.
“Common-law spouse” is defined in s. 1(1) as
(a) a person who, with the intestate, registered a common-law relationship under
section 13.1 of The Vital Statistics Act, or
(b) a person who, not being married to the intestate, cohabited with him or her in a
conjugal relationship, commencing either before or after the coming into force of this
definition,
(i) for a period of at least three years, or
(ii) for a period of at least one year and they are together the parents of a child.
Ontario “Spouse” means either of two persons who,
(a) are married to each other, or
(b) have together entered into a marriage that is voidable or void, in good faith on the
part of the person asserting a right under this Act (s. 1)
[See s. 57 for definition of spouse for purpose of Part V Support of Dependants]
Quebec A spouse is a person who is married (arts. 365 & ff. CCQ) or who has entered into a
civil union (arts. 521.1 & ff. CCQ).
Yukon A spouse is a married person.
“Common law spouse” means either (s.1)
(a) a person who is united to another person by a marriage that, although not a legal
marriage, is valid by common law, or
(b) a person who has cohabited with another person as a couple for at least 12
months immediately before the other person’s death.
7-70
Jurisdiction Definition of Spouse*

*All section references are to the legislation listed in Figure 7.3: Intestacy Legislation
by Jurisdiction
Intestacy Legislation by Jurisdiction, unless otherwise noted.
Northwest “Spouse” is defined in the Family Law Act and means a person who
Territories (a) is married to another person,
(b) has together with another person entered into a marriage that is voidable or void,
in good faith on the part of the person asserting a right under this Act, or
(c) has lived together in a conjugal relationship outside marriage with another person,
if
(i) they have so lived for a period of at least two years, or
(ii) the relationship is one of some permanence and they are together the natural
or adoptive parents of a child.
Nunavut “Spouse” means a person who: (s. 1)
(a) was married to the person who died intestate,
(b) was married to the person who died intestate in a marriage that was voidable or
void, and had entered that marriage in good faith, or
(c) was cohabiting, outside marriage, with the person who died intestate, if they
(i) had cohabited for a period of at least two years, or
(ii) had cohabited in a relationship of some permanence and were together the
natural or adoptive parents of a child.
7-71
Figure 7.11: When a Spouse is Not Entitled on an Intestacy

Where spouses have separated, whether married or in a common-law relationship, questions arise as to
whether or not the survivor should still be entitled to receive from an intestate person’s estate. This table
identifies the jurisdictions that have provided guidance on when the surviving spouse or common-law
spouse may not be entitled to receive from an intestate’s estate.
Jurisdiction Disqualification Rule
British Columbia Two persons cease being spouses if an event occurs that causes an interest in family property as
defined in Part 5 of the Family Law Act to arise or in the case of a marriage-like relationship, one
or both persons terminate the relationship. (s. 2(2))
Spouses are not considered to have separated if, within one year of separation, they begin to
live together again and the primary purpose for doing so is to reconcile, and they continue to
live together for one or more periods, totalling at least 90 days. (s. 2(2.1))
Alberta A surviving spouse is deemed to have pre-deceased if: (see s. 63)
a) The spouses had been living separate and apart for more than two years (subject to
exception in s. 63(2))
b) The spouses are parties to a declaration of irreconcilability under the Family Law Act
c) The spouses are parties to a separation agreement or order
See s. 10 of the Adult Interdependent Relationships Act for events that will terminate a
relationship with an AIP.
Saskatchewan The surviving spouse will not share on intestacy if he or she has left the intestate and is living in
adultery at the time of the death of the intestate. (s. 20)
Manitoba The surviving spouse will not be entitled: (s. 3)
• If married, then separated and either of the following has occurred:
o application for divorce or equalization of assets; or
o division of property prior to death.
• If living common law, then any of the following has occurred:
o separation of at least three years;
o dissolution of a registered relationship;
o an accounting or equalization of assets; or
o division of property prior to death.
Ontario The legislation is silent.
Quebec The surviving spouse will be entitled to inherit if still legally married or in a civil union.
New Brunswick The legislation is silent.
Newfoundland The legislation is silent.
and Labrador
Nova Scotia The surviving spouse will not share on intestacy if he or she has left the intestate and is living in
adultery at the time of the death. (s. 17)
Prince Edward The surviving spouse will not share on intestacy if he or she is co-habiting in a conjugal
Island relationship with another person at the time of death. (s. 99)
Yukon Subject to an order by the court otherwise, a surviving spouse is not entitled if he or she: (s. 94)
(a) had, immediately before the death of one spouse, separated for not less than one year
with the intention of living separate and apart; and
(b) had not during that period lived together with the intention of resuming cohabitation.
Northwest The survivor is not entitled on an intestacy if: (s. 13)
Territories • There has been an application for divorce;
• The parties are separated and there is either an application for division of property or an
agreement with respect to division of property;
• The surviving spouse was living in a conjugal relationship with another person; or
• The intestate had entered a spousal relationship with another person
7-72
Jurisdiction Disqualification Rule

Nunavut The survivor is not entitled on an intestacy if: (s. 13)
• There has been an application for divorce;
• The parties are separated and there is either an application for division of property or
an agreement with respect to division of property;
• The surviving spouse was co-habiting with another person; or
• The intestate had entered a spousal relationship with another person.
7-73
Figure 7.12: Manitoba and Ontario Only: Distributions on Intestacy to Issue – Special
Rules
Generally, when a child pre-deceases an intestate person, if a child has pre-deceased leaving one or more
issue, the child’s issue will take based on a per stirpes distribution. However, Manitoba and Ontario have
modified the rules slightly. The rules are summarized and then an example is provided illustrating three
scenarios:
• All common law jurisdictions except Manitoba and Ontario

• Manitoba
• Ontario
The Manitoba Rule: The same persons are entitled to a share of the estate of an intestate as would be
entitled on a per stirpes distribution. However, descendants of the same degree always receive an equal
share. An equal share is created for
a) each of the surviving descendants who are of the nearest degree to the intestate, and
b) each deceased person who is of the same degree as the nearest degree to the intestate who has
issue surviving the intestate.
The share created in respect of any deceased person in the second point above is re-divided and
distributed as if all the surviving descendants of the nearest degree and all their issue had also pre-
deceased the intestate. This formula results in a per capita distribution at each generation.
The Ontario Rule: The distribution among surviving issue is similar to that of Manitoba, but not
identical, as descendants of the same degree may not necessarily receive an equal share. The estate is
divided per capita at the generation closest to the intestate that has a surviving member, with an equal
share also being created for any pre-deceased descendant of the nearest degree who has issue surviving.
This first division is the same as the division for Manitoba in point (a) above.
Next, the share of any pre-deceased descendant is distributed in a similar manner as if that pre-deceased
descendant was intestate (i.e. the share in the first division created in respect of a deceased descendant is
divided into equal shares for the surviving descendants of that pre-deceased descendant). This differs
from Manitoba in that the division of that share into equal parts is only among that particular pre-
deceased descendant’s issue resulting in a potentially different distribution to descendants of equal degree
to the intestate.
Once the primary division has taken place, the distribution of the primary share will be only to
descendants of the person for whom that share is created. In Manitoba, however, the share can be
redistributed to issue of other descendants of the deceased who are of the same degree.
Manitoba and Ontario: If all children die before the intestate and the grandchildren either all survive the
intestate or some, but not all of them, die before the intestate without issue, all surviving grandchildren
will share on a per capita basis.
7-74
Henry
Brody(d) Megan Alex(d)
Adam(d) Mark(d) Faith(d)
Larry Jake Bill
Claire Jim
Henry died without a will and is survived by Megan, one of his three children, and by five great-
grandchildren as shown above. Brody, Alex, Adam, Mark and Faith have all predeceased.
Primary Division (all jurisdictions)
The primary division takes place at the first degree since Megan is alive. Because both of Megan’s
siblings are survived by issue, an equal share is created for each of them. Three equal shares will be
divided among Henry’s issue as follows
Division in all provinces except Manitoba and Ontario (per stirpes distribution)
• Megan takes 1/3
• Alex’s share passes to Faith but she has also died, so her share is divided equally between Bill
and Jim. Each receives 1/6.
• Brody has passed away, so his 1/3 would pass to Adam and Mark (1/6 each). However, they also
predeceased, so their issue take their share. Jake takes Mark’s 1/6 share. Larry and Claire take
Adam’s share or 1/12 each.
This is the same as in Quebec; there is no limit to representation in the direct line (art. 661 CCQ).
Division among Henry’s great-grandchildren in Ontario
In Ontario, Brody’s one-third share would be divided equally among his three grandchildren, Larry,
Claire and Jake, so they would each receive one-ninth. Alex’s share would be divided equally between his
grandchildren, Bill and Jim, who would each receive a 1/6 share. Megan still takes 1/3.
Division among Henry’s great-grandchildren in Manitoba
In Manitoba, each great-grandchild would receive an equal amount. The one-third share of each of Brody
and Alex are added together and divided by the number of grandchildren such that each of them would
receive two-fifteenths. Megan still takes 1/3.
7-75
Figure 7.13: Legislation Governing Missing Persons and Presumption of Death by

Jurisdiction
This legislation is provided for information purposes only. The details are not examinable. Additional
legislation may also apply.
Jurisdiction Legislation
British Columbia Estates of Missing Persons Act, R.S.B.C. 1996, c. 123
Presumption of Death Act, R.S.B.C. 1996, c. 444
Alberta Public Trustee Act, S.A. 2004, c. P-44.1, Part 2 (property of missing persons)
Saskatchewan Missing Persons and Presumption of Death Act, S.S. 2009, c. M-20.01
Manitoba The Missing Persons Act, C.C.S.M., c. M199
Presumption of Death Act, C.C.S.M., c. P120
Ontario Absentees Act, R.S.O. 1990, c. A.3
Declarations of Death Act, 2002, S.O. 2002, c. 14, Sch.
Quebec Absence (arts. 84-91 CCQ)
Declaratory judgment of death and Return (arts. 92-101 CCQ)
New Brunswick Presumption of Death Act, S.N.B. 1974, c. P-15.1
Newfoundland Presumption of Death Act, R.S.N.L. 1990, c. P-20
and Labrador
Nova Scotia Public Trustee Act, R.S.N.S. 1989, c. 379, s. 4 – Missing persons
Presumption of Death Act, R.S.N.S. 1989, c. 354
Prince Edward Probate Act, R.S.P.E.I. 1988, c. P-21, s. 38
Island
Yukon Decision-Making Support and Protection to Adults Act, S.Y. 2003, c. 21,
Schedule C: Public Guardian and Trustee Act
Presumption of Death Act, R.S.Y. 2002, c. 174
Northwest Public Trustee Act, R.S.N.W.T. 1988, c. P-19
Territories
Nunavut Public Trustee Act, R.S.N.W.T. (Nu.) 1988, c. P-19
7-76

CETA-1 (3rd Ed) - Chap 07 - Estate Beneficiaries

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Chapter 7

o Common Law Only: Identify circumstances or reasons where an “in kind”

REMINDER: Terminology varies significantly between provinces, and even more

7.1 CLASSES OF GIFTS AND BENEFICIARIES

7.1.1.1 Specific Legacies

7.1.1.2 Demonstrative Legacies

7.1.1.3 General Legacies

7.1.2 Quebec Only: Types of Legacies (Gifts) Made by Will

7.1.3 Classes of Beneficiaries of Estates and Trusts

7.2 DEFINITION OF SPOUSE

7.2.1 Marriage, Registered Relationships and Common-law Relationships

7.2.1.1 Quebec Only: Spouse, Civil Union Spouse, De Facto Spouse

7.2.2 Multiple Spouses

7.3 CHILDREN AND ISSUE

Jeff Sherry Shawn

Aaron Olivia Hanna Nicole

Alex Ben Ryan

7.4.1 Per Stirpes/By Roots

7.4.2 Per Capita/By Heads

7.5 CLASS GIFTS

grandchildren or indicate when the class of grandchildren should be determined. At the

7.6 CONDITIONAL AND DEFERRED GIFTS

7.6.1 Common Law Only: Vested and Contingent Beneficiaries

7.6.2 Common Law Only: Vested and Contingent Interests – Definitions

7.6.3 Common Law Only: Conditions

7.6.3.1 Conditions that Are Uncertain

7.6.3.2 Conditions that Are Impossible

7.6.4 Quebec Only: Beneficiary Rights and Conditions

7.6.4.1 Beneficiary “Rights” – Current and Future

7.6.4.2 Suspensive and Extinctive Conditions

7.7 SURVIVORSHIP RULES

7.7.1 Simultaneous Deaths (Order of Death)

7.7.1.1 Outcome #1: Youngest Survives the Older Rule

7.7.1.2 Outcome #2: Each is Deemed to Survive the Other Rule

7.7.2 Statutory Survivorship Rules – How Many Days Must a Beneficiary

7.7.3 Survivorship Rules and Designations on Registered Plans and Insurance

7.7.4 Common Law Only: Joint Tenancies and Survivorship Rules

7.7.4.1 Outcome #1: Youngest Survives the Oldest

7.7.4.2 Outcome #2: Ownership is Severed

7.8 COMMON LAW ONLY: WHEN BENEFICIARIES PRE-DECEASE A

7.8.1 Gifts to More than One Person

7.8.2 Gifts that Fail

7.8.2.1 Anti-Lapse Rules

The following outcomes can be anticipated:

7.8.2.2 Determining Contrary Intention and Anti-lapse Rules

7.8.2.3 Anti-lapse, Contrary Intention and Class Gifts

7.8.2.4 Cases on Anti-lapse and Contrary Intention

7.8.3 When a Beneficiary Renounces a Gift

7.8.3.1 Renouncing the Right to Income from a Trust

7.8.4 When there is No Beneficiary

7.8.4.1 When a Legacy Fails

7.8.4.2 When a Gift of Residue Fails

7.8.5.1 Order of Abatement (All Provinces Except Alberta)

Example #2 – Gift of Real Property

Outcome (except British Columbia and Alberta)

7.8.6.1 A Specific Legacy is Exchanged or Replaced

7.8.6.2 Statutory Exceptions to Ademption – Sale by Substitute

British Columbia: If a committee, attorney, or representative sells or gifts a property

7.9 QUEBEC ONLY – GIFTS THAT FAIL

7.9.2 Legacies to Individuals and Joint Entitlements

• the universal legacy (defined in art. 732 CCQ),

7.9.3 Failure of Legacies and Consequences

7.9.4 Lapse for Causes Linked to the Person or the Property