How to cope when there are two families and just one will

Joyce Blond Frank B.A., B.C.L., LL.M.

April, 2010

Multiple marriages and blended families are part of society. Problems relating to support, division of property and gifts by marriage contract can affect our heirs after we pass on. It might be advisable to think about these when making a will.

Do I really own my house?

In order to promote economic equality between husband and wife, Quebec in 1989 passed a law under which marriage creates a “family patrimony,” composed of certain property, such as family residences and furnishings, the family vehicle, pension plans and registered savings plans regardless of which spouse is the listed owner.

This means that if a married couple buys their residence and puts it in the name of only one of them, it will still be included in the family patrimony and both spouses will have rights to it. Property given to one of the spouses as a gift or through inheritance is not included in the family patrimony. When the parties separate or divorce or if one of the parties dies, the value of the assets included in the family patrimony is divided between the spouses or between one spouse and the heirs of the one who has died.

For example, if the residence is valued at $250,000 and there exists a mortgage of $100,000, the equity of $150,000 will be divided and each party will be entitled to place the sum of $75,000 on his side of the balance sheet. This does not mean that the house has to be cut in half; it is the value that is split and not necessarily the asset itself. In the case of death, the surviving spouse may have a right against the estate for an amount equal to half the net market value of the house, or the heirs of the deceased spouse will have a right against the surviving spouse for that amount.

The same principle would apply to all the other assets that form part of the family patrimony. The value of the assets less the amount of liabilities is calculated and each party is entitled to his one half-share of the net balance. The point to remember here is that even though the house is in your name, you may only have rights to 50 per cent of it to transmit to your heirs.

Do I really have to support my parent’s former spouse?

Another situation that can arise, to the surprise and dismay of heirs, is the continuing right of someone, such as an ex-spouse or child from a previous marriage, to receive support from the estate. A remaining obligation of support exists in those cases where it was or could have been exercised prior to the death of the person owing it. For example, where a husband has been paying support to an ex-wife or child, his estate may have an obligation to continue that support. Such support must be claimed within six months of the death. Where an ex-spouse is already receiving support, the benefits she receives will be equal to the value of one year’s support. Where the support is owed to someone else, it will be equal to the value of six months support.

In all cases, the total amount cannot exceed 10 per cent of the value of the estate. The value is established by the liquidator of the succession together with the heirs and legatees. When they cannot agree, it is fixed by the court. Continuation of payment after death can be provided for in a will or through an insurance policy and, so long as the amount provided equals at least that which is stipulated by law, such a provision could prevent problems for the estate after death. When the debtor of a support obligation has promised to guarantee that obligation with an insurance policy but has failed to buy that policy, the estate may be obliged to pay the amount that was guaranteed.

Was the old marriage contract taken into account?

Marriage contracts were very popular in the past. They usually contained a provision for a gift given in anticipation of death. Under current law, such gifts are rendered null and void upon divorce if the judgment in divorce was rendered after December 1, 1982. In cases where the divorce judgment predates Dec. 1, 1982, and a gift contained in the marriage contract is not discussed in the judgment, the estate of a deceased donor might have to contest a claim for the value of the gift and require a court judgment to have the gift declared invalid.

If there has been a divorce, it is prudent to make sure that any gift provision contained in a former marriage contract was resolved by the judgment. If the deceased was not legally divorced, a claim may be made against the estate by the legal spouse even if the deceased has been living with someone else for many years. Be sure you obtained a legal divorce and that the judgment resolved all issues relating to the marriage contract.

Given the consequences that can result because of family patrimony, the existence of a forgotten gift obligation under a marriage contract or the survival of the obligation to pay support, it is important to consider these issues when making a will. To do so can help avoid an unhappy situation for your heirs.