The Implications of Dying Without a Will in Newfoundland

66% of Atlantic Canadians don’t have a will. But why is that important? What actually happens when you die without one? 

In this article, we’ll take a closer look at estate administration in Newfoundland when the deceased dies intestate, how Newfoundland estate laws work, what the probate process is like, and what it means for heirs and beneficiaries when there is no will. 

Introduction to Intestacy

When a person passes away without a legal will and testament, they pass away “intestate”. There are many implications to passing away without a will, including the stress it can cause your loved ones, the time it takes to settle your estate, and the lack of direction for the administrator of your estate to follow. 

Here are 7 reasons why you should make a will →

When you’re a resident of Newfoundland and Labrador and pass away without a will, your estate will then be distributed by the intestate succession laws of the province. This means that your assets will only be distributed to your spouse, your “issues” (a term used to refer to all lineal descendants of a person through all generations), and your extended family. 

We’ll get more into the specifics of the Newfoundland and Labrador intestate succession act later in the article. For now, let’s jump into the probate process for intestate estates in Newfoundland. 

Probate Process in Newfoundland

The legal regulations for wills are made on a provincial level. So probate, which is the process of the courts formally accepting a will or appointing an administrator for an estate without a will, falls under The Supreme Court of Newfoundland and Labrador’s jurisdiction.

Is probate required in Newfoundland?

The Newfoundland and Labrador probate process isn’t necessary for every estate, though it is typically based on the types of assets, so it’s more common when the estate is large or complex. 

Your estate will likely need to go through probate if:

• You solely own property (a home)
• A bank or other third party requires a grant of probate (or letters of administration) for assets over a certain dollar amount
• You are a joint owner of a property whose total value or type of ownership is difficult to determine

If there is no will, the probate process is necessary for someone to become an administrator and sell any real estate property, transfer stocks and bonds or access large sums held by banks and trust companies.

Applying for a grant of letters of administration

According to Rule 56 of the Rules of Supreme Court, 1986, the priority of the right to a grant of letters of administration is as follows, though it’s subject to the discretion of the judge and can only be issued to a resident of Newfoundland and Labrador:

1. Spouse
2. Children
3. Grandchildren, or other issues of deceased taking per stirpes*
4. Father and mother
5. Brothers and sisters of the whole or half blood, or the issues of deceased brothers and sisters of the whole or half blood, taking per stirpes
6. Grandparents
7. Uncles and aunts of the whole or half blood, or the issue of deceased uncles and aunts of the whole or half blood, taking per stirpes
8. Creditors
9. The Crown

*Per stirpes is a legal term which means that if the beneficiary passes away before the estate holder, the beneficiary's share of the estate will pass to the beneficiary's lineal descendants.

What’s part of the application

An application for a grant of letters of administration would include an application package of documents alongside any application and probate fees that may be necessary. 

Application fees are often a flat rate, while court fees in Newfoundland and Labrador vary depending on the value of the estate:

‍Fees valid as of January 2024, accessed from the Supreme Court of Newfoundland and Labrador.

The necessary documents for a grant of letters of administration application would include:

• Notice of Application (should be posted a minimum of 5 working days prior to the processing of the application)
• A Petition with supporting affidavit
• Consents (if applicable)
• An Inventory and Valuation of Assets
• Administration Bond
• An Oath of the Administrator
• Draft order

To learn more about each individual document, see pages 19-23 of this document.

How do I avoid probate in Newfoundland?

Avoiding probate is difficult without a will, as it is where an administrator is appointed through a grant of letters of administration or through a Public Trustee. 

The process, however, is a bit easier to undergo if the estate in question is simpler in terms of size or complexity. 

Learn more about probate in Canada here →

What happens when someone dies without a will in Newfoundland?

When someone dies intestate in Newfoundland and Labrador, either someone who is eligible comes forward and applies for a grant of letters of administration, or the courts appoint a Public Trustee to settle and distribute the estate based on Newfoundland and Labrador’s intestate succession laws. 

These succession laws generally prioritize spouses, children and blood relatives, and ignore common-law partners and friends. 

If you’d like to decide who among your relatives receives what, or if you want to make sure your common-law partner or friend receives part of your estate, you’ll need to include them in your will.

Intestate Succession Rules

Newfoundland and Labrador use the Intestate Succession Act, in conjunction with the Labrador Inuit Land Claims Agreement Act, as a family law that regulates how to distribute the estates of those who pass away without a will. 

As such, inheritance rights for intestate estates in the province are as follows:

• If you have a spouse but no children, your spouse gets 100% of your estate.
• If you have a spouse and one child, the spouse and child equally share the estate.
• If you have a spouse and children, your spouse gets 1/3 of the estate, and the rest is split equally between your children.
• If you have a spouse and grandchildren from a child that has passed away, the spouse would receive the same money as if the child were alive and the grandchildren would receive the child’s share of the estate.
• If you have children and no spouse, your estate will be divided equally between them.
• If you have no spouse or children, your estate is divided equally between your parents. If only one parent is alive, that parent would receive 100% of your estate.
• If you have no spouse, children, or surviving parents, your estate will be divided equally among your siblings. If any of your siblings have already passed away, your nieces and nephews will get their parent’s share. If none of your siblings are alive, then your nieces and nephews will get equal shares of the estate. 
• If you have none of the above, the administrator or Public Trustee appointed to the estate will search for any next of kin to distribute the estate to equally.

Impact on Beneficiaries

Newfoundland and Labrador’s intestate succession rules prioritize immediate family members such as a spouse or any children (including blood-related and adopted). These rules however do not take into consideration common-law partners, other dependents, or friends. 

If you want to decide who receives what from your estate, making a will is the best way to do so.

Legal and Tax Considerations

Potential legal challenges

Legal consequences of intestacy can include common-law partners receiving nothing and disputes happening if heirs challenge how assets are distributed or who has been appointed as the administrator of the estate. Resolving these kinds of conflicts can involve court proceedings and the need to bring in legal counsel, which can in turn add more emotional and financial stress at a time when people may still be mourning. 

Capital gains tax

Sometimes the transfer of certain assets from an estate to heirs can trigger capital gains tax. Understanding the tax implications of asset transfers is important for preventing tax liabilities for both the estate and any heirs.

Steps to Take After a Death

Being in the position of dealing with an intestate estate can be a challenging and emotional process. Here are some practical pieces of advice to help guide you through the complexities of managing an estate without a will to guide you.

1. Identify and Secure Assets: Begin by identifying and securing all assets of the deceased, including real estate, personal property, bank accounts, investments, and other financial holdings. Take steps to safeguard valuable items and ensure that the estate's assets are all accounted for.
2. Understand Intestacy Rules: Familiarize yourself with Newfoundland and Labrador's Intestate Succession Rules to determine how the estate will be distributed among surviving family members. 
3. Communicate with Heirs: Keep open lines of communication with all potential heirs. Inform them of the intestacy situation, the probate process, and the expected timeline for estate administration. Keep them updated on your progress. Clear communication can help prevent misunderstandings and disputes, which will in turn help you settle and distribute the estate all the quicker.
4. Address Outstanding Debts & Liabilities: Identify and address any outstanding debts and liabilities of the deceased. This may include mortgages, loans, other financial obligations, and the deceased’s mandatory final tax return to the Canada Revenue Agency. There is no Newfoundland and Labrador inheritance tax, nor is there inheritance tax anywhere else in Canada. 
5. Keep Detailed Records: Detailed records for all transactions, communications, and decisions made during the estate administration process help serve as a valuable reference in case of disputes or errors later down the line, and may be required for legal and tax purposes.‍
6. Don’t Forget Self-Care: Managing an intestate estate can be emotionally taxing, especially if the deceased was a loved one. Take breaks when needed, prioritize self-care, and seek support from friends, family, or counselling services to help you with the stress from the process.

Preventing Intestacy

Leaving your estate without a will can make the settlement and distribution process that much harder for your loved ones. 

By creating a valid legal will, you can avoid the restrictions of intestate succession laws while also protecting assets in Newfoundland and Labrador. And the process of making one is more affordable than you might think! 

Start your will for free today with Willful →