Overlays of Family, Estates and Contract Law
The impact of Stone v. Stone will clearly have a lasting impact on the practice of family law. This case stands for the general proposition that a spouse can not deplete their assets with the effect of diminishing their spouse’s entitlement under the Family Law Act. Similarly, the estates bar has recently witnessed a similar effect as a result of the decision in Pecore v. Pecore: Transfers of assets into joint ownership between persons other than spouses are inevitably now subject to even greater scrutiny than before.
In the context of the estates practitioner, it can be seen that the principles raised in Stone clearly have some bearing on estates litigation. When a spouse transfers assets into joint ownership with his daughter from a first marriage, the surviving second spouse will no doubt argue that the presumption of resulting trust applies, having consideration to Pecore. But Stone may have relevance as well, particularly in circumstances in which the deceased and the second spouse enter into a Marriage Contract which provides for a guaranteed entitlement of the surviving spouse on the death of the other. To what extent is the spouse who promises such entitlement precluded from gifting assets or transferring assets into joint ownership? A complex overlay of contract, family, and estates law ensues. Unless the assets are significant, the costs of litigating such a dispute inevitably militate in favour of settlement.
David M. Smith