Testamentary freedom is a core tenet of estate planning in Ontario. In general, testators are at liberty to set up their estate plan to include or exclude whomever they wish. Where part or all of a testator’s estate plan fails as a result of an intestacy, Ontario’s Succession Law Reform Act (the “SLRA”) steps in to provide the parties who will benefit as a result. Occasionally, the principles of testamentary freedom and intention and the laws of intestacy intersect in peculiar ways. This intersection came to a head in the Eissmann v Kunz (2018 ONSC 3650) decision.
In Kunz, the testator, Siegfried Kunz, died leaving no fewer than four testamentary documents purporting to be wills, briefly summarized as follows:
- A will drawn in 1967, which divided Mr. Kunz’s estate between his wife and their daughter, Petra;
- A will drawn in 1982 in Mr. Kunz’s handwriting, which stated that the “beneficiary after [his] death is Petra”;
- A will drawn in 2000, again in Mr. Kunz’s handwriting, which purported to modify the 1967 will and listed a number of specific legacies to various beneficiaries. Mr. Kunz appears to have later written over the original bequests to increase the amount of each. Petra was once again listed as the sole residuary beneficiary; and
- A will drawn in 2009, also in Mr. Kunz’s handwriting, which provided that Petra would “not receive a single Euro of out [the] Estate.” In the margin of the 2009 will, Mr. Kunz expressly indicated that the 2009 will was to be an “amendment” to the 2000 will.
The Court was first tasked with determining which will was to govern. The Court concluded that the 2000 will was a valid holograph will, though noted that the subsequent handwritten amendments were of no force and effect as they did not comply with the formal requirements for valid alterations under the SLRA. The Court concluded that the 2009 will operated instead as a codicil to the 2000 will as it did not dispose of any property on its face and, therefore, could not function as a standalone will.
The interplay between the 2000 will and the 2009 codicil is such that a conflict arose with respect to the disposition of the residue of Mr. Kunz’s estate. The 2000 will names Petra as the sole residuary beneficiary. The 2009 will revokes Petra’s interest entirely. The 2009 codicil therefore created a partial intestacy with respect to the residue of Mr. Kunz’s estate, and the Court looked to the SLRA to determine who would inherit.
The hierarchy of beneficiaries on an intestacy is set out in Part II of the SLRA. Mr. Kunz died leaving no surviving spouse, and so the next intestate beneficiaries were to be his children, that is, Petra. In an ironic twist of fate, the Court concluded that Petra was solely entitled to all of the residue of Mr. Kunz’s estate, notwithstanding that he had intended to expressly disinherit her under the 2009 codicil. The Court declined to give effect to Mr. Kunz’s apparent intention to exclude Petra.
Simple estate planning steps, such as the appointment of an alternate beneficiary under the 2009 will, could have prevented this great irony. Ensure the effects of your testamentary dispositions are properly understood by taking time to review your will with a lawyer.
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