Under the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”), section 6(1), when a spouse dies leaving a will, the surviving spouse can elect to take their entitlement under the will, or to receive their entitlement pursuant to an equalization of net family property pursuant to section 5 of the FLA. If a surviving spouse wishes to make an election for an equalization payment, they must file such election within six months after the deceased spouse’s death in accordance with s. 6(10) of the FLA, and if they do not do so within the prescribed time, pursuant to s. 6(11), the surviving spouse is deemed to elect to take under the will.
Pursuant to section 2(8) of the FLA, the court may extend the time prescribed by the FLA, in this case being six months after the date of death, if it is satisfied that,
(a) there are apparent grounds for relief;
(b) relief is unavailable because of delay that has been incurred in good faith; and
(c) no person will suffer substantial prejudice by reason of the delay.
In Lundy v Lundy Estate, 2017 ONSC 2101, a recent Ontario decision, the court considered a motion by a surviving spouse to extend the limitation period for an equalization election under the FLA. The spouse’s husband (the “Deceased”) died on June 29, 2015. Accordingly, the spouse would have had to make her FLA election by December 29, 2015. The motion in question was not brought until January 2017. The Deceased’s son, the residual beneficiary of the Deceased’s estate (the “Estate”) opposed the relief sought by the spouse.
The spouse claimed that she had not been provided with timely or complete information regarding the value of the Estate as at the dates of marriage and death, which is required in order to calculate a possible equalization payment. She claimed that she did not have a complete picture of the assets of the Estate until July 2016, and that she still needed valuation information regarding the Deceased’s company.
On the other hand, the son claimed that the spouse was aware of the Estate assets, as she was the named co-estate trustee of the Estate, along with the son, and was also in possession of the Deceased’s financial records. There was evidence that the spouse had accepted her role as co-estate trustee, accepted bequests made to her under the Deceased’s will, and had not expressed any intention of making an equalization claim or seeking an extension to make such a claim. Furthermore, there was evidence of an email from the spouse’s son from October 2015 in which he provided his preliminary estimate of the market value of the Estate assets and expected tax liability, indicating that the spouse did have some information regarding the size of the Estate and her share of it.
The court in this case dismissed the spouse’s motion for an extension, concluding that the spouse did not show that her delay in bringing the motion was incurred in good faith. The court held that the spouse did not explain why she failed to assert a claim or failed to seek an extension of the FLA limitation periods if she believed she needed further time and information in order to investigate and evaluate her FLA claim. In denying the extension sought by the spouse, however, the court noted that doing so would not leave the spouse without any remedy, as she may still be able to pursue a claim for dependant’s support under the Succession Law Reform Act, R.S.O 1990, c. S.26.
The decision in Lundy Estate v Lundy provides a reminder to surviving spouses to act quickly and diligently with respect to their entitlement to their deceased spouse’s estate, and any potential claims they may have in this regard. It is advisable for a surviving spouse to seek advice from a trusted legal professional to ensure that they are aware of their rights, assert them within the applicable limitation period, and do not lose the opportunity to pursue any potential claims.
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