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Inheritance and Benefits

An inheritance is money or other property that is received from the estate of a deceased person. If the deceased person has a will, the estate generally is distributed based on their stated wishes. The information below address the circumstances when a deceased person dies without a will.

Additionally, this section contain information about pension benefits upon death.

What happens with inheritance if there is no will?

The Intestate Succession Act sets out how the property or estate of a person who dies without a will (intestate) must be distributed.

If there is no will, the surviving spouse or the surviving common-law partner will usually receive the entire estate. This occurs if:

  • the deceased left no descendants, such as children or grandchildren
  • all of the deceased’s descendants are also descendants of the surviving spouse or common-law partner
  • the estate is worth $50,000 or less

To qualify as common-law partners under The Intestate Succession Act, a couple must have either registered their common-law relationship with the Vital Statistics Agency, or they must have cohabited in a conjugal relationship for either at least three years or at least one year if they have a child together. If a person dies leaving both a spouse and one or more common-law partners, the one whose relationship with the deceased was most recent will have priority over any others. However, this priority cannot stop another spouse or common-law partner from applying for an accounting and equalization of assets under The Family Property Act, as described above.

If there are descendants who are not also descendants of the surviving spouse or common-law partner (such as children from another marriage), the whole estate does not automatically go to the surviving spouse or partner. In those cases, the surviving spouse or partner will receive the first $50,000 or half of the estate, whichever is worth more, and half of the remainder. This means a surviving spouse or partner will always receive at least 75 per cent of the estate.

If the entire estate is not going to the surviving spouse or common-law partner because the deceased left children from another relationship, all of the deceased’s children will share the rest of the estate equally. At most, the deceased’s children will share 25 per cent of the estate.

If the deceased left no spouse or common-law partner, their children will share the estate equally. If a person dies without a spouse, common-law partner or descendants, their estate will be distributed to the closest relatives. For someone to receive part of an estate where there is no will, they must live 15 days longer than the person who died.

The Intestate Succession Act also provides that if spouses or common-law partners are separated and:

  • in the case of married spouses, either has applied to court for a divorce
  • in the case of common-law partners who had registered their relationship with the Vital Statistics Agency, either or both had registered the end of the relationship before one of them died
  • in the case of common-law partners who had not registered their relationship with the Vital Statistics Agency, they had lived separate and apart for at least three years
  • they have already made a final division of their property

The surviving spouse or common-law partner will not receive a share under the act. In these circumstances, the survivor may still be entitled to apply for an accounting and equalization of assets under The Family Property Act (if property matters have not already been dealt with), and may also have rights under The Homesteads Act.

Unless a person leaves a valid will, their estate will be dealt with under The Intestate Succession Act. It is important to remember that through a will, a person can leave parts of an estate to more distant relatives who would not inherit under that act, or to charities, churches, friends and so on.

Are there taxes on inheritances?

There are currently no provincial taxes on inheritances. Income tax may be payable by the person’s estate.

What happens to pension benefits?

Canada Pension Plan

Spouses, common-law partners and dependent children may be eligible for survivor’s pension benefits under the Canada Pension Plan on the death of a spouse or parent, where the deceased contributed to the plan for at least three years after turning 18. A single lump sum death benefit payment may also be made to the estate of the deceased.

Canada Pension Plan death benefits should be applied for as soon as possible. Waiting may result in a loss of benefits.

The method of determining eligibility for benefits is complicated. For more information about benefits and what is needed to qualify for Canada Pension Plan death benefits, contact Service Canada Centres in one of the following ways:

Online

https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-death-benefit.html

In person

A list of the Service Canada locations in Manitoba is available at: http://www.servicecanada.gc.ca/tbsc-fsco/sc-lst.jsp?prov=MB&lang=eng

By phone

1-800-277-9914 toll-free (English)
1-800-277-9915 toll-free (French)
1-800-255-4786 toll-free (TTY)

What laws apply to Pension Benefits after death?

The Pension Benefits Act

The Pension Benefits Act of Manitoba applies to pension plans sponsored by an employer for employees in Manitoba. It does not apply to the Canada Pension Plan, to federal government employees, to federally-regulated pension plans or to personal retirement savings (such as an Registered Retirement Savings Plan).

If a member of a pension plan to which the Act applies, dies while still employed, the member’s spouse or common-law partner is entitled to pension benefits based on the total amount accumulated in a plan. The spouse or partner will not receive a cash payment, but will receive benefits in the form of payments from a life annuity. Payments from this annuity may begin immediately or when the surviving spouse or partner retires.

When a member of a pension plan to which the Act applies retires, his or her pension benefits are payable in the form of a joint pension if the member is married or living with a common-law partner when the payments begin, unless the spouses or common-law partners are separated, or the spouse or common-law partner has formally waived his or her entitlement to a joint pension in accordance with the Act. If a plan member or his or her spouse or common-law partner dies after the member retires, the survivor is entitled to pension benefits at a level of at least 60 per cent of the original pension amount. This provides spouses and common-law partners with a monthly pension guaranteed for the lives of both of them. It also provides protection for survivors by guaranteeing they receive a set pension income after the death of the other spouse or partner. This protection may be given up by completing a waiver form.

Please visit the Property section of this website for more information about The Pension Benefits Act, including provisions about the amount of any survivor’s pension.

If the plan member dies before retirement, death benefits will be payable to the member’s spouse or common-law partner only if they were living together immediately before the member‘s death, either as an immediate or deferred annuity plan, or by transfer to certain types of locked-in investments allowed under The Pension Benefits Act. If the plan member did not have a legal spouse or common-law partner, a lump sum payment may be made to a named beneficiary or to the member’s estate.

For more information about benefits and to see if a pension plan falls under this act, contact:

The Office of the Superintendent – Pension Commission
1004 – 401 York Avenue
Winnipeg MB R3C 0V8
Phone: 204-945-2740
Fax: 204-948-2375
Toll free: 1-800-282-8069 (Ext. 2740)
TTY: 1-800-855-0511
Email: pensions@gov.mb.ca

The federal Pension Benefits Standards Act, (1985)

The Pension Benefits Standards Act, (1985) applies to most federally-regulated pension plans (e.g., the airlines and railways), and provides protection to spouses and common-law partners similar to that in The Pension Benefits Act of Manitoba.

For more information about benefits under this federal act, and to see if it applies to a pension plan, contact:

Office of the Superintendent of Financial Institutions of Canada
12th floor – 255 Albert Street
Ottawa ON K1A 0H2
Toll free: 1-800-385-8647
TTY: 613-943-3980
Fax: 613-990-5591
Website: www.osfi-bsif.gc.ca