Doesn’t the Government take everything if there isn’t a Will?

Many people believe that the Government takes everything if a person dies without a Will. This may happen, in extreme cases, but usually does not.

“My uncle died without a Will. Will all his money go to the government?”

No. In Manitoba we have an Act of the Legislature called “The Intestate Succession Act” which deals with situations where people die without a Will or the Will they left does not cover all of their property. Under the Act, there is a “pecking order” based upon closeness of family relationship. The legislation is, of course, inflexible in that it treats people of a certain degree of relationship the same as all others of the same degree of relationship and generally ignores spouses except, of course, for the deceased’s spouse.

One of the drawbacks to The Intestate Succession Act is how it deals with deceased beneficiaries. Most people, when given a choice, prefer to treat each family equally, so that if one of their children predeceases them, that child’s share will go to his or her own children. Under the Act, however, if more than one person of a particular generation predeceases, their shares are added together and given equally to all of their children combined, so that a more prolific family will get a larger share of the estate, as a family.

Having died without a Will, it will be necessary for someone to be selected to be an administrator. An administrator is like an executor only with fewer powers. An administrator is appointed by the Court from among eligible persons where, by contrast, an Executor is appointed by the deceased in his Will. One of the main requirements of an administrator is that they must be residents of Manitoba. Also, unless all potential beneficiaries are adults and consent to waive it, an administrator must post a personal bond for twice the value of the estate or an insurance company bond for one time the value of the estate. With a personal bond, Sureties (other people who pledge their assets to the Court) may also be required. The insurance company bond will involve a premium which must be paid by the estate. Insurance company bonds are becoming increasingly difficult to get. The insurance companies require financial information from a potential administrator or surety before they will consider issuing a bond. There are other additional requirements for administration that can be avoided if one makes a Will.

Generally speaking, in an administration, the administrator will keep looking until he or she finds someone related to the deceased. There are, however, some very rare exceptions where absolutely no relatives can be found. In that case, the estate “escheats” to the Crown. In other words, it goes to the government.

Having a Will is strongly recommended. It is the single most important tool in estate planning and forms the basis for any other strategies you might wish to employ. Notwithstanding the marketing pitch of the Will Kit makers, a basic Will of the kind most people make can be had for not much more than the cost of a Will Kit and you gain the added benefit of your lawyer’s experience and training.