Because a death ends a marriage or civil union, if the deceased has a surviving spouse, the succession and surviving spouse must equally divide the couple's common assets. Assets are considered common based on the Family Patrimony rules (which apply to all married and civil union couples) and the couple's Matrimonial Regime (which depends on the their marriage or civil union contract).
With that said, in many cases the will can stipulate that the surviving spouse must renounce his or her right to the common assets in order to inherit assets from the succession.
Note that in Quebec these rules do not apply to common-law spouses. A common-law spouse can only inherit if explicitly named in the will.
1. Family Patrimony
The Family Patrimony is a specific set of the couple's common assets, the value of which (but not the ownership) is distributed evenly between the surviving spouse and the succession following the death of one spouse.
The Family Patrimony includes the following assets owned by either or both of the spouses:
- Any home the family uses (ie, excluding rental or commercial properties), including a secondary residence, vacation home, RV, or even a boat if it is used by the family as a vacation home
- All of the objects that furnish or decorate those family homes and are used by the family, except those clearly used exclusively by one spouse (such as the furniture in one spouse's closed office)
- All motor vehicles used to transport the family (eg, excluding a motorcycle used by only one spouse)
- The benefits or value accrued during the marriage under a retirement or pension plan, except those accrued under a plan granting right to death benefits to the surviving spouse
Note that the assets owned by a spouse prior to the marriage, as well as those received as a gift or inheritance at any time, are considered private property and are therefore excluded from the Family Patrimony. The accrued value of private property is also excluded from the Family Patrimony. More on exclusions further down.
All other assets are excluded from the Family Patrimony, but may still be common to the couple depending on their Matrimonial Regime.
2. Matrimonial Regimes
In addition to the Family Patrimony, which applies to all married and civil union spouses, the couple's Matrimonial Regime will determine which, if any, additional assets are common to the couple. The value or ownership of these assets would be evenly distributed between the surviving spouse and the succession following a death.
Couples can agree or change their Matrimonial Regime at any point, and make any stipulations they choose to, as long as those stipulations are legal and the decision is made in front of a notary. If they never agreed to a Matrimonial Regime, one will apply to them by default based on the date they were married or entered into a civil union.
The three types of Matrimonial Regimes are:
In all cases, spouses' Private Property is excluded from the couple's common assets.
Private Property includes the following assets.
- Assets owned prior to the marriage or civil union, as well as the value they accrue
- Inheritances or gifts received at any time, as well as the value they accrue
- Clothing, personal papers and awards, diplomas, instruments for work, and wedding rings
- Support, disability payments, and other benefits
- Insurance payments relating to private property
- Compensation for injury
- Benefits received from a retirement plan, annuity, or insurance policy
- Income from a business that is private property, if reinvested in the business
- Assets acquired to replace private property and any related insurance payments
- Assets acquired mostly with private property
Note that the matrimonial regimes assume that all property is common to the spouses unless proven otherwise. There is a high bar to prove that an asset should be excluded from the spousal partition, and the burden of proof is on the party claiming that an asset should be excluded.
Assets that are proven to be private property of the deceased would be passed on to the succession.
A. Partnership of Acquests (default regime since July 1, 1970)
Acquests are all assets that are not part of the family patrimony and cannot be proven to be Private Property. Namely, this includes all assets the couple acquires while married or in a civil union, all income from either spouse, and any income generated by either spouse's private property or acquests during the marriage or civil union. (Note that the accrued value of private property is also private property).
In practice, all property is assumed to be an acquest unless proven otherwise.
B. Community of Property (default regime until July 1, 1970)
Under this regime, the couple's assets are divided into three categories:
- Private Property
- Community Property, which includes:
- All assets acquired by the spouses during the marriage
- The husband's income
- Any income generated by both spouses' private property
- Reserved Property of the wife
- Includes her earnings and any asset purchased with those earnings
At the end of the marriage, the wife (or her succession) can decide to either:
a) Share the Community Property and Reserved Property evenly with the husband (or his succession), or
b) Renounce the Community Property entirely and maintain all of the Reserved Property
In Community of Property, if the wife (or her succession) decides to share the Community Property and Reserved Property, the parties divide the ownership of the assets (as opposed to the value of the assets in the Partnership of Acquests).
C. Separation as to Property
Under this regime, the spouses maintain their private property as well as any asset they acquire during their marriage or civil union. If they cannot prove that an asset belongs exclusively to them, however, the asset is assumed to be owned 50-50 by both. In this case the spouses need to agree on which one of them will get ownership of the asset, or sell the asset and split the proceeds.
Note that even under the Separation as to Property regime, the Family Patrimony applies and must be be calculated and settled when one spouse dies.
The main exception to the Family Patrimony are assets owned prior to the marriage or civil union, those received as gifts or inheritance at any time, and the accrued value of these assets.
Therefore, the following are excluded from the Family Patrimony:
- The proceeds from the sale of an excluded asset
- The accrued value on the portion of an asset that is excluded (because it was either owned before marriage, or acquired partly with an inheritance or gift)
For example, assume a family home was owned by one of the spouses before the marriage, and there was a mortgage on the house:
However, if there was no mortgage on the home at the time of marriage, the entire value of the house would be excluded from the Family Patrimony:
To calculate the balance for the spousal partition payment, the succession will need to sum the value to be shared for each of the couple's common assets. This means it will need access to a list of both spouses' assets and liabilities and may also require help from professionals such as actuaries and lawyers.
Note that all assets are by default considered common to the couple, unless proven otherwise. To make an exception, the burden of proof will be on the party that claims that an asset should be excluded.