There are two major things that must be sorted by relatives if someone dies without a will. The first is who gets the job of being the executor (the term administrator is used in cases where there is no will). The second is how to distribute the assets left after the debts are paid.
In terms of appointing an administrator, it can get tricky if more than one person wishes to do this – or if no one wishes to. Essentially, the court will have to approve the person who has chosen to act. If everyone gets along and can agree as to who should be entrusted, it’s a lot easier. If family members such as spouses and children disagree things can get very ugly and very expensive and it will erode any assets that have been left behind.
Every jurisdiction will do things differently, but here in British Columbia there is a specific formula as to how assets are distributed. If someone has a spouse and no children, everything goes to the spouse. If someone has children and no spouse, everything is divided among the children. If a child has died before the parent and has children of their own, then the deceased child is considered alive for the purposes of division and that parent’s share is divided equally among their children.
Trouble can arise when there is a spouse and children and oftentimes the end result is not what would have been wanted. (in my experience, most people want to protect their spouse first, make sure they have enough to live on, and then have the assets pass on to the children after both die). There is a division of assets between spouse and children according to a formula which changes periodically. Currently the spouse gets the first $300,000 in British Columbia ($200,000 in Ontario – each province does this a little differently and it can change) after the debts are paid. If there is one child, half of the assets go to the spouse, the other half to the child. If there is more than one child, one third goes to the spouse, the remainder is divided among the children. Where things can get complicated is if the spouses are separated yet not divorced, or if someone has separated from a spouse, not divorced, and cohabitated with a new spouse. Then there can be some very expensive legal battles. It can mean that a spouse could be forced by the children to leave the marital home so it can be sold, depending on whose name was on the title to the home and how it was owned. Then there can be disputes over the contents of the home and other items.
A will allows you to specify at what age children receive their inheritances. With no will, inheritances are disbursed at the age of 19. What I see quite often in my practice is that parents prefer to delay this, and use their wills to specify that funds can be distributed in stages, one-third at age 25, one-third at 30 and the remainder at 35, with the ability for the Trustee to access the funds at any time for the child’s maintenance, benefit and education. This makes it less likely that a child would squander the money on cars and to take their friends on holiday or nights on the town, which I have definitely seen happen when a child receives a windfall at too young an age.
There is always the possibly of family discord even if a spouse or parent dies with a will, but generally because the wishes are laid out and spouses are usually protected, it is not like the bomb going off when someone dies without a will and the families have to try to pick up the pieces. Even in the simplest of families, a will makes things so much easier. It is all set out as to who is supposed to handle the estate and banks and other financial institutions can help sort out the affairs just by seeing the will rather than needing a court order to know who has the authority to manage things. Families who get along will struggle with this situation. It is many times worse if there is a second marriage or if spouses and children don’t get along to begin with.
Disclaimer: This is not meant to constitute legal advice. I highly recommend speaking to a legal professional about your specific circumstances.