Bill 245: Bringing Reform To Ontario Estate Law
On April 19, 2021, Bill 245 – Accelerating Access to Justice Act, 2021 received Royal Assent, and with the updated legislation comes changes that have significant implications on estate planning and administration. Bill 245 introduces significant changes to various aspects of estates and substitute decision-making law in Ontario, particularly to the Succession Law Reform Act (“SRLA). The bill, first tabled in February, permits permanent virtual witnessing of wills, enables courts to save invalid wills and amends SLRA provisions around marriage and divorce.
Permanent Virtual Witnessing Permitted
Bill 245's amendments to the Succession Law Reform Act ("SLRA") and the Substitute Decisions Act, permits permanent virtual witnessing of wills and powers of attorney (POA). In response to the outbreak of COVID-19, virtual witnessing of wills and POA was already allowed on a temporary basis under an emergency order, O. Reg 129/20, to allow the public to execute these documents safely and remotely. The bill sanctions virtual witnessing as a permanent option available to the public going forward, which has the potential to improve access to justice for Ontarians requiring legal assistance with their estate planning.
The requirements for a valid virtual witnessing of a will or power of attorney are as follows:
at least one of the witnesses must be a licensee (paralegal or lawyer) of the Law Society of Ontario;
the "audio-visual communication technology" used must enable the testator and witnesses to see, hear and communicate with one another in real time;
the testator and witnesses must sign the documents contemporaneously;
the counterpart copies of the will or power of attorney must be complete and identical (however, minor, non-substantive differences in format or layout between the copies are of no consequence); and
any further requirements specified by the regulations must be met.
Keep in mind that while the documents may be witnessed electronically, they may not be electronically signed. In other words, “wet” signatures will still be needed by the person making the will and/or power of attorney and the witnesses.
Courts Provided Authority to Validate Imperfect Wills
Another major change to estate law in Ontario is the introduction of “substantial compliance”. Before Bill 245, if a will or other testamentary document was not entirely compliant with the formal requirements of the SLRA, the will would be invalid. As a result, some documents clearly intended by the deceased to function as a will were considered invalid, thereby dishonouring the deceased's wishes.
Amendments to Bill 245 provides the Superior Court of Justice greater authority to validate wills and other testamentary documents that were not properly created or signed in accordance with the SLRA, if the Court is satisfied that the document sets out the testamentary intentions of the deceased or an intention of the deceased to revoke, alter, or revive a will. When a will does not meet the formalities as set out in the law, it may still be admissible to probate, but only time will tell what types of informalities will be permitted. The actual effect of a substantial compliance doctrine will need to be tested in court. It is still recommended to legally and carefully approach will drafting and execution. Relying on Bill 245 is like skating on thin ice. You may make it to the other side, or not, but isn’t it better to avoid the risk?
Bill 245 introduces new section 21.1 of the SLRA which allows the court to make orders validating wills which did not adhere to strict requirements. However, it should be noted that the legislation specifically does not expand to validate electronic wills.
The provision comes into force on January 1, 2022, at which time all provinces except Newfoundland and Labrador will operate with substantial compliance, and will apply to deaths after the date the legislation comes into effect.
Marriage No Longer Revokes a Will
Sometime after January 1, 2022, entering a marriage will no longer revoke an existing will.
Bill 245 repeals the existing provision in the SLRA that automatically revokes a will upon marriage, which, among other benefits, may serve to protect vulnerable individuals entering predatory marriages.
However, one major implication of this change is that it puts the onus on a married spouse not provided for in a will prepared before marriage to bring a claim against the estate for support/equalization payment.
Spousal Gifts and Appointments Revoked if Separated
Under Bill 245, section 17 of the SLRA was amended to add provisions that ensure that a spouse separated at the testator’s death does not benefit under the testator’s will.
This means, separated spouses will be treated more like divorced spouses where the deceased had, in the will, designated the ex-spouse as a beneficiary, executor or trustee, or to hold general or special powers of appointment. In other words, a gift for a spouse under a will is to be revoked if the spouses are deemed to be separated at the time of the testator's death.
Spouses are considered to be separated if the following conditions or circumstances apply at the time of the testator’s death:
they lived separate and apart for three years as a result of the breakdown of their marriage;
they entered into an agreement that is a valid separation agreement under Part IV of the Family Law Act, R.S.O. 1990, c. F.3;
a court made an order with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; or
a family arbitration award was made under the Arbitration Act, 1991, S.O. 1991, c. 17 with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; and at the time of the testator’s death, they were living separate and apart as a result of the breakdown of their marriage.
This legislation will come into effect sometime after January 1, 2022.
Separated Spouses No Longer Inherit on Intestacy
Before Bill 245, where an individual died intestate (without a will), separated spouses could claim entitlement to a "preferential share" of the deceased's estate. Effective January 1, 2022, Bill 245 aims to address this often unintended effect by ensuring that separated spouses, as defined above, do not inherit the estate of a former spouse who died without a will.
Bill 245 amends the SLRA and the Family Law Act to prohibit spouses from inheriting from a deceased's estate on an intestacy, if the deceased and the spouse are separated at the time of the deceased's death.
However, this new legislation may cast confusion, or bring litigation, for parties who were separated at the time of death of a spouse as a result of the care needs of one or both spouses, due to physical or mental incapacity. Disputes may arise over factual findings of when and whether the deceased spouses were separated.
This amendment will apply to separations that occur on or after January 1, 2022.