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Survivorship Clauses and Common Accidents
In certain tragic situations, spouses or entire families pass away in an accident, and due to the nature of the accident, it is impossible to determine the order in which people have died

Survivorship Clauses and Common Accidents

In certain tragic situations, spouses or entire families pass away in an accident, and due to the nature of the accident, it is impossible to determine the order in which people have died. For example, such circumstances might arise in the context of an airplane crash or a natural disaster in which there are no surviving witnesses. Such tragic situations could result in the deaths of individuals who have a valid Last Will (i.e., having died “testate”) or may involve people who do not have a valid Last Will or only part of a valid Last Will (who will be said to have died “Intestate” or “partially intestate”). It could also involve people, such as spouses, who own property as joint tenants or who are named beneficiaries on each other’s life insurance policies. In those situations, how are the deceased’s estates managed?

The Law of Ontario – Common Accidents

The Survivorship Act of Ontario (1970) which preceded and was abolished by the current Succession Law Reform Act (“SLRA”), previously stated that in uncertain situations where there is a lack of evidence to the contrary, deaths were presumed to have occurred in order of age seniority (i.e., the elder individuals would be deemed to predecease the younger in descending priority). Prior to its abolition, the Survivorship Act was theoretically contrary to the Insurance Act for Ontario (1990), which then and still to this day stipulates that, unless there is a contrary intention in the insurance policy itself, insurance proceeds are payable as if the beneficiary predeceased the insured individual.

Now, the SLRA and the Insurance Act work together and there is no possibility of a conflict between them. Part IV of the SLRA provides that in the case of a common accident in a situation where it is uncertain which predeceased the other, those persons are deemed to have survived each other. This essentially means that the property belonging to each of the deceased individuals at the moment of death will be distributed as if they had survived the longest. Further, the SLRA now also provides that where two individuals who jointly own property as joint tenants die in uncertain situations, they are deemed to have died owning the property as tenants in common, which means that their interest in the jointly owned property, whatever the interest is, will be administered and distributed either in accordance with their Last Will (if one exists) or in accordance with the SLRA’s rules on intestacy. These sections of the SLRA now align perfectly with the Insurance Act.

The Use of Survivorship Clauses in a Will

If it is possible to determine who died first, then there is no issue insofar as determining who is entitled to what property, in both the testate and in the intestate context. However, litigation or even the threat of it may disrupt or drag out the administration and distribution of an estate if the surviving family members can’t or won’t concede the order of death, which is more likely to be the case if a certain family member who would otherwise stand to inherit is cut out by virtue of the application of the Last Will. Therefore, to reduce the possibility of estates’ litigating against each other, it is possible for Will’s to contain a “survivorship” clause. Such a clause will usually stipulate that a beneficiary must survive the testator by a certain period to receive the bequest, gift, or interest under the Will. The survivorship clause is most used when a testator is bequeathing property to a spouse, who are generally more likely to be together at any given time and therefore more likely to be in a common accident. The use of survivorship clauses also has the benefit of reducing the possibility of double payment of estate administration taxes, more commonly known as “probate fees”.

Final Thoughts

Unlike Last Will kits or online Last Will drafting services, consulting a lawyer will assist both with your understanding of how a Last Will operates and will result in a Last Will that works as intended, after considering all of the possible circumstances, including the possibility of a common accident.

We regularly help our clients with will drafting throughout the Cambridge, Kitchener, and Waterloo region. We’ve seen it all, and we’re happy to catch those details that you might have missed in your initial planning. Contact us today to set up a consultation.