Jimmy sent me an interesting question the other day, something that all us married folk should be thinking about:
For a married couple where neither has a will, how do the assets get distributed? Do they go straight to the other person?
As I am not a lawyer, I don’t have precise answers. However, this is what I understand:
Assets under Joint Ownership
- These assets will automatically be passed onto the partner tax free. If both partners die at the same time WITHOUT a will, the courts will decide where it goes.
- If you want the RRSP to go to your partner, you must name him/her as the beneficiary of the account. Upon passing, the beneficiary will obtain ownership of the RRSP account tax free. If no beneficiary is named, again, the courts will decide where the assets go.
- Unless the asset is included in the will, the courts will decide how to “fairly” distribute the assets.
Moral of the story? If you have stuff that you want to be passed onto your spouse upon passing, either make them joint owner, or even better yet, get a will!
That reminds me, anyone know how much it costs to setup a will with a lawyer? How about the DIY kind?