Being A Beneficiary Of A Will In Canada: What’s To Expect?

If someone has designated you to inherit assets from their estate in their last will, you may feel honoured but also unsure about what happens next.

Rest assured, the process does not need to be complicated if you understand your rights, your responsibilities, and follow the proper procedures. With some practical knowledge about wills and a bit of patience, beneficiaries can ensure their benefactor’s wishes are carried out as intended.

What is a Beneficiary of a Will?

Being named as the beneficiary of a will means you are entitled to inherit assets, property or money from the estate of a deceased person. A will is a legal document that specifies who should receive a person’s remaining property and possessions after they die

The person who creates a will is called the testator. The testator will designate specific people or organizations as beneficiaries who should receive gifts from the estate.

What’s The Difference Between an Heir and a Beneficiary?

It is important not to confuse beneficiary and heir, as they have distinct meanings legally:

• A beneficiary is a recipient named in a will or trust.
• An heir is a person entitled to receive assets through intestate succession, which distributes property when someone dies without a will.

Heirs are determined based on provincial laws, whereas beneficiaries are designated by the individual in their will.

How Do You Become a Will Beneficiary?

To become a beneficiary entitled to assets from an estate, you must be specifically named in the deceased individual’s valid last will and testament.

The testator is not legally obligated to tell anyone that they have been designated as a beneficiary in the will. Oftentimes, however, they will informally let beneficiaries know ahead of time.

After the testator passes away, the executor of the will is responsible for contacting all beneficiaries named and providing the inheritance they have been left.

Who Can Be a Beneficiary of a Will in Canada?

A testator can designate virtually anyone as a beneficiary in their will. Common examples include:

• Spouses and common-law partners
• Children and grandchildren
• Other family members: parents, siblings, nieces, nephews, etc.
• Friends or colleagues
• Charitable organizations or religious institutions

The testator can name multiple beneficiaries and specify what percentage of assets each individual should inherit. It is also possible to designate minors as beneficiaries, though their inheritance is typically held in trust until they become adults.

How many Types of Beneficiaries of a Will in Canada?

There are 3 different types of beneficiaries that may be designated in a will:

Primary Beneficiary

The primary beneficiary is the main recipient who will inherit assets from the estate if they are still living at the time of distribution. This is typically the testator’s spouse, child, or other close family member.

Contingent Beneficiary

A contingent or alternate beneficiary only receives an inheritance if the primary beneficiary dies before the distribution of the estate. This provides a backup plan to ensure assets get distributed according to the testator’s wishes.

Residual Beneficiary

The residual beneficiary receives the remainder of the estate assets after all debts, taxes, expenses, and specific bequests have been paid out. Multiple residual beneficiaries may be named to divide the residue.

What Are the Benefits of Being a Will Beneficiary?

It can be meaningful to have specific assets passed down to you. There are three main advantages to being named as a beneficiary in a will:

• You are legally entitled to the inheritance specified for you in the will.
• Beneficiaries do not pay tax on most assets they inherit.
• You have the option to disclaim or refuse your inheritance if desired.

If a specific named asset no longer exists or cannot be located, the beneficiary can receive an alternate estate asset of equivalent monetary value, or get a cash payout from the general estate funds equal to the item’s worth.

Sometimes, they may receive nothing if the will’s language says the gift fails if that item is no longer part of the estate.

What Are the Responsibilities of a Will Beneficiary?

Being a beneficiary in someone’s will is a privileged position, but it also carries legal responsibilities. Beneficiaries should carefully review the will to ensure they understand what they are entitled to inherit and any related conditions.

Beneficiaries are required to cooperate fully with the executor and provide any needed documentation. Maintaining open communication can help facilitate the process.

Suppose the beneficiary is also named executor of the will. In that case, they will have additional administrative responsibilities such as filing paperwork, paying any debts and taxes owed by the estate, and notifying all beneficiaries.

Even if not the executor, beneficiaries may still be called upon to provide assistance and paperwork to help settle estate matters.

Do All Beneficiaries Receive a Copy of the Will in Canada?

Beneficiaries do not automatically have a right to receive or view a copy of the will. However, the executor must provide a copy if a beneficiary requests to see the will.

Once probate is granted on a will, a copy becomes part of the public record, and anyone can order a copy or view it online through the court.

Before this point, a potential beneficiary would need to start legal proceedings to get access if the executor has not yet applied for probate.

How Long Does It Take for a Beneficiary to Receive Their Inheritance?

The time it takes for a beneficiary to receive their share of the estate depends on many factors:

• Size of the estate – Larger, more complex estates typically take longer to settle and distribute assets.
• Will disputes – Challenges to the will’s validity or the trustee’s actions can tie up distribution for months or years.
• Assets to be sold – If property or other assets must be sold to create liquid funds for distribution, it takes additional time.
• Claims against the estate – Valid debts or claims against the estate must be resolved before distribution.
• Taxes – Estate taxes and final income taxes for the deceased must be filed and paid before residual amounts can be distributed.
• Trusts – If assets go into a trust, beneficiaries may not receive funds until the trust expires.

Under normal circumstances, most beneficiaries receive their full inheritance within 1-2 years.

Can a Beneficiary Be Removed from a Will?

As the maker of the will, the testator can change beneficiaries at any time prior to death by:

• Creating a new will or codicil that overrides the old version
• Explicitly revoking the gift to that beneficiary

If removed, the beneficiary would no longer have any legal entitlement to inheritance from that estate.

However, if you believe you were removed as a beneficiary incorrectly or improperly, you may be able to contest the will. An estate litigation lawyer can help determine if you have grounds for a will challenge.

Can a Beneficiary Disclaim or Refuse Their Inheritance?

Yes, a named beneficiary has the right to disclaim or refuse any gifts left to them in the will. This may be done because:

• They do not feel they deserve or need the inheritance.
• There are tax liabilities attached to the gifted assets.
• The beneficiary is renouncing due to a moral objection or dispute.
• Relationship problems have arisen with other beneficiaries.

To legally disclaim an inheritance, the refusal must be:

• Made in writing
• Signed by the beneficiary
• Witnessed by a lawyer or a notary public
• Done within a reasonable timeframe

Disclaiming an inheritance is permanent. The assets will pass to alternate beneficiaries named in the will or through intestacy laws if no contingent beneficiary was designated.

What Are the Problems Faced by Will Beneficiaries?

5 common frustrations that beneficiaries encounter include:

• No communication – The executor fails to provide status updates to beneficiaries.
• Delayed distributions – The executor is taking too long to distribute inheritance funds.
• Missing assets – Assets promised in the will cannot be located.
• Disputes – Conflicts arise between beneficiaries or with the executor.
• Financial institution delays – Banks place holds on releasing funds from estate accounts.

If beneficiaries encounter any issues, it is advisable to consult a probate litigation lawyer to ensure their rights are protected. The lawyer can help resolve any estate disputes and compel the timely distribution of assets.

What If the Executor Does Not Probate the Will?

If the named executor fails to submit the will to the probate court to be validated, beneficiaries have legal recourse to get the matter resolved.

Possible options are:

• Filing a motion for the executor to probate the will or cease acting
• Starting a procedure for the court to name a new executor
• Requesting appointment of an Estate Trustee During Litigation (ETDL) to preserve assets until disputes are settled

This usually requires working with an experienced estate litigation lawyer. Valid reasons for concern include the executor having a conflict of interest or acting improperly and the estate assets being at risk of dissipation.

How Can You Update Beneficiaries in a Will?

To change beneficiaries, the testator must update their will. This can be done by:

• Creating an entirely new will document that replaces the previous one.
• Drafting a codicil – a legal supplement or amendment to the existing will.

Be sure to destroy copies of any old or obsolete will versions to avoid confusion.

It is also critical to know that beneficiary designations made for non-probate accounts like life insurance policies, RRSPs or TFSAs will supersede any instructions in the will about those assets. The named recipient(s) on the account documents will receive those funds.

What If No Beneficiary Is Named in a Will?

If no beneficiaries are explicitly named in a will, assets are distributed according to provincial intestacy laws. Under Ontario’s Succession Law Reform Act, the estate goes to the deceased’s closest surviving next of kin in the following order:

• Surviving married spouse or registered domestic partner
• Children
• Parents
• Siblings
• Nieces and nephews
• Next-of-kin (aunts/uncles, cousins, etc.)

The estate is divided among the class of relatives that most closely fits this hierarchy. Intestacy can result in a distribution that differs from the testator’s wishes.

For more insights, explore our guides related to the Inheritance and End-of-Life Matters:

• Government Funeral Assistance in Canada
• What Happens If You Die Without A Will In Canada?
• How To Find An Obituary For A Specific Person in Canada
• Writing a Heartfelt Condolences Message

FAQs about Beneficiaries of a Will in Canada

The Bottom Line

Being designated as the beneficiary of a will is generally welcome news, but you may encounter hurdles if you do not understand the process. By learning their rights, staying organized, and, if necessary, engaging a probate litigation lawyer, beneficiaries can maximize their chances of receiving their inheritance smoothly.