People often think that when a person passes away without a will and immediate family, their property will go to the government. This is not entirely correct. It can be the case that the property of a person who passes away intestate and without next of kin can be held by the government, but this is rare and only occurs in specific circumstances.
If you die without a will, i.e. if you die intestate, the Estate Administration Act sets out a table of consanguinity (shared blood) that legally defines the closeness of your relatives and how your property will be distributed amongst them on your intestacy. A new law, called the Wills and Estate Succession Act, will change the table of consanguinity into a parantelic table, which means that the manner in which the closeness of relatives is calculated will be somewhat different once that law comes into force.
When a person dies intestate, both Acts set out the manner in which an appointed administrator must search for heirs entitled to the distribution of the deceased’s estate. If this search becomes exhausted and no legal heir is found, the real property from the estate escheats, i.e. passes in ownership, to the Crown. Similarly the personal property of the deceased’s estate vests in the Crown as bona vacantia (“ownerless goods”). Any future distribution of this property is then governed by the Escheat Act.
Where the Crown has a right to intestate property, it does not dispose of the property and keep the proceeds of the estate. In reality, the Crown does not have any active means to even determine when property vests or escheats to it. The Crown only becomes aware of its claim to intestate property when an appointed administrator notifies it, or when an individual claims a right to the return of the escheated property.
Most importantly, under the Escheat Act, an individual with a moral or legal claim to either real or personal property which has previously escheated to the Crown can apply to the Deputy Attorney General of the Province to have the property distributed to them. There is no limitation period in which a claim to escheated property must be made.
Therefore, contrary to popular opinion, the Escheat Act actually provides a means for the Crown to reunite intestate property with the proper legal or moral owner(s) of such property and is not a means of revenue generation.
If you have any questions about intestacy or estate administration, please contact one of our Wealth Preservation + Estate Litigation professionals: http://www.ahbl.ca/practices/practice-areas/wealth-preservation-estate-litigation/.