Unlike some other provinces, getting a divorce in Prince Edward Island does not automatically revoke your existing Will or remove your ex-spouse as a beneficiary. If you do not update your estate plan immediately after separating, your ex-spouse could inherit your property or become the executor of your estate.
Going through a separation or divorce is an emotionally and financially draining experience. Once the property is divided and the spousal support or parenting time is established, most people just want to move on with their lives. However, forgetting to update your estate plan is a dangerous oversight that can have devastating consequences for your new family or intended heirs.
In Prince Edward Island, the law has a very specific and dangerous quirk regarding marriage breakdown. While getting married automatically cancels your old Will, getting divorced does not. Your ex-spouse remains fully entitled to whatever you left them in your old Will until you physically draft a new one. Updating your documents is the only way to protect your assets.
Step-by-Step Process in Prince Edward Island
Whether you reside in Stratford or Souris, securing your estate after a marriage breakdown involves a comprehensive review of all your legal and financial documents. Here is the safest approach to take.
Step 1: Execute a New Will Immediately
Do not wait for the divorce to be finalized. As soon as you separate, contact a local PEI law firm to draft a new Will. By executing a new document, you officially revoke all previous Wills. You can assign a new executor (like a sibling or adult child) and redirect your assets away from your ex-partner.
Step 2: Update Beneficiary Designations
A Will does not control everything. Assets like RRSPs, TFSAs, and life insurance policies bypass your Will and go directly to the named beneficiary. You must contact your bank or insurance broker to fill out new forms, removing your ex-spouse and naming a new beneficiary or your estate.
Step 3: Revoke Old Powers of Attorney
If you become medically incapacitated, your Power of Attorney dictates who makes your financial and healthcare decisions. If your ex-spouse is still listed, they could legally control your bank accounts or decide to pull the plug on your life support. You must sign new Power of Attorney and Healthcare Directive documents to appoint someone you currently trust.
Step 4: Establish Trusts for Minor Children
If you have young children, you likely want your estate to go to them. However, if they are minors, your ex-spouse (as the surviving parent) would normally manage their money. To prevent your ex from controlling the funds, your new Will should create a “testamentary trust” appointing a trusted third party as the trustee to manage the inheritance until the children reach a certain age.
How Much Does it Cost in Prince Edward Island?
Updating your estate plan is highly affordable, especially compared to the financial chaos that occurs if you die with an outdated Will.
- Drafting a New Will: Most PEI law firms charge between $400 and $800 CAD for a standard individual Will.
- Complete Estate Package: A bundle that includes a Will, Financial Power of Attorney, and Healthcare Directive typically costs around $600 to $1,000 CAD.
- Beneficiary Updates: Updating your RRSPs, TFSAs, and life insurance is generally free of charge through your financial institution.
- Probate Fees: By updating your plan, you ensure your assets go to the right people without facing contested court battles, which can drain tens of thousands of dollars in legal fees from the estate.
How Long Does the Process Take?
Securing your estate after a divorce is a fast process. Once you provide your lawyer with your instructions, drafting the new documents generally takes 1 to 3 weeks. Changing your beneficiaries at the bank usually takes only a few days after submitting the forms. The peace of mind is almost immediate.
Frequently Asked Questions (FAQ)
Does my separation agreement override my Will?
Not automatically. While a separation agreement waives your ex-spouse’s legal right to claim a portion of your estate under PEI family law, if your Will explicitly gives them a gift, the law generally assumes you still wanted them to have it. You must update the Will itself.
What happens if I die before my divorce is finalized?
If you are separated but not yet legally divorced, and you have not updated your Will, your spouse remains your primary beneficiary and executor. If you don’t have a Will, they have a strong claim to your entire estate under PEI intestacy laws. This is why immediate updates are crucial.
Can I completely disinherit my spouse while we are still legally married?
It is difficult. Under PEI’s Dependants of a Deceased Person Relief Act, a legal spouse can challenge your Will if they were not adequately provided for. However, a properly executed separation agreement usually contains a release clause preventing them from making this claim.
Who will take care of my kids if I die?
If the other biological parent is alive and capable, they will generally assume full parenting time. However, you can use your new Will to express your wishes for guardianship in case the other parent also passes away or is deemed unfit by the courts.
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