Dr. Gertrude Ewart died at the age of 93, leaving a son and a daughter. Prior to her death, she gifted a cottage to her son having a value of $145,000. In her Will, she made a bequest to her daughter of $145,000. The balance of her estate was divided equally between her son and daughter.
Subsequently, Ewart established a family trust. The trust provided that upon her death, her daughter was to receive $150,000, and the balance of the trust assets were divided between her son and her daughter.
Does the daughter get the $145,000 bequest in the Will, AND the $150,000 provision in the trust?
This question was decided by Justice Lococo in Campbell v. Evert, 2018 ONSC 593 (CanLII).
There, the court considered the principles of ademption by advancement, and the presumption against double portions. The court also considered the impact of extrinsic evidence on these principles.
The court considered case law regarding the reliance on extrinsic evidence as to intention. As there was no ambiguity or equivocation in the words of the will or the trust, extrinsic evidence as to Ewart’s intentions was not admissible.
The son argued that the principle of ademption by advancement applied. An ademption is the failure of a bequest of property due to the non-existence of the property at the time of death. An ademption by advancement occurs when the testator, after making the Will, gives the beneficiary all or part of the property that the beneficiary would have received under the Will.
In the present case, there was no adempetion as the property (the $145,000) existed.
As to the presumption against double portions, the court questioned whether the presumption arose at all. The court noted that Canadian courts placed a narrow construction on the principle. Further, the presumption only applied “to a gift to a child made with a view to establishing him or her in her life.” In the present case, the daughter was already “established”. The court also noted that the presumption against double portions “is not strong, and is easily rebutted”.
In any event, the court held that even if extrinsic evidence was admitted (which supported a conclusion that Ewart wanted to treat her two children equally), it would not have assisted the son. The court observed that the gift of the cottage was made 21 years before Ewart’s death. Therefore, it was possible that the extra gift to the daughter was to take into account the rise in value of the cottage over time.
Finally, the court noted that Ewart did not take any steps to amend her Will after establishing the trust.
A lesson to be learned from this fact situation is that estate plans must be reviewed whenever there is a significant change in circumstances. The litigation may have been avoided if the testator made it clear, in her Will and trust document, as to whether the daughter was entitled to both the $145,0000 and the $150,000, or just one of the gifts.
Thank you for reading.