Estate Planning Update: What Ontario’s New Rules Mean for Separated Spouses

At Volpe Financial Solutions, we’re always watching the changes that could impact your family’s financial future. As of January 1, 2025, Ontario has officially updated its succession laws, and the new rules make a big difference for couples who are separated but not legally divorced.

Separated Spouses Now Treated as Divorced

Under Ontario’s Succession Law Reform Act, a separated spouse is no longer entitled to inherit automatically when someone passes away without a will. This change recognizes separation as a true end to the relationship, even if the divorce paperwork hasn’t been finalized.

The rule applies if one of these conditions is met:

• You’ve lived apart for at least three years, or

• You have a valid separation agreement, court order, or arbitration award in place.

Since the three-year clock began in 2022, the law is now in full effect as of January 2025.

Why It Matters for Families in Ontario

While this update helps avoid unwanted outcomes, it doesn’t replace the importance of having a clear estate plan. Without a will, your assets may still be distributed in ways you never intended — potentially leaving children, new partners, or other loved ones without the protection you’d want for them.

That’s why we encourage clients to update their wills and powers of attorney as soon as a separation takes place, not years down the road.

How Life Insurance Can Eliminate Tax Burden

Life insurance, often viewed primarily as a financial safety net for loved ones, can also serve as a powerful instrument for legally mitigating and, in some cases, effectively eliminating certain tax liabilities. By strategically incorporating life insurance into your financial plan, you can shield your assets from significant tax erosion, ensuring a larger portion of your wealth is transferred to your beneficiaries.

Key Takeaways

Change	What It Means
Separated spouses no longer inherit by default	They are treated the same as divorced spouses if conditions are met.
Rule is now in full effect	The three-year timeline has passed, making the law fully operational.
Estate planning is still essential	Wills, powers of attorney, and beneficiary designations should be reviewed right away after a separation.
Life insurance remains a powerful tool	Can help offset tax obligations and protect your family’s financial stability.

Our Perspective at Volpe Financial Solutions

Life transitions are never easy, and the law is just one piece of the puzzle. Estate planning, insurance, and wealth strategies need to work together to give your family clarity and security.

If you’d like to review your estate plan, update your documents, or explore how insurance can protect your legacy, our Oakville team is here to guide you.

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Disclaimer: 

The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This blog was written by Brett Volpe], for the benefit of Brett Volpe, Financial Advisor with Volpe Wealth Management, a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities. 

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