Spoiler alert: It didn’t work.

In Smith v. Smith, 2022 ONSC 63 (CanLII), the court dealt with an unusual claim for a declaration that real property owned by a deceased had vested with the beneficiary under the Will.

There, a husband and wife separated. Prior to separation, they both signed a promissory note in favour of a third party. The promissory note was in default, and the third party was threatening collection proceedings against the husband and wife.

The wife had no assets. However, she was the sole beneficiary of her mother’s estate. The principal asset of the estate was a house. The wife was the estate trustee of her mother’s estate. Although three years had passed since the date of death, the house remained in the mother’s name.

The husband, afraid of being the only one on the hook for the debt to the third party, brought a motion for an order vesting the mother’s property in the wife.

Unfortunately for the husband, the motion failed. While s. 9 of the Estate Administration Act provides that “Real property not disposed of, conveyed to, divided or distributed among the persons beneficially entitled thereto … within three years after the death of the deceased is … thenceforth vested in the persons beneficially entitled thereto under the will…”, this did not apply to the property in question. The court relied on the leading Ontario Court of Appeal decision of Di Michele v. Di Michele, 2014 ONCA 261 to the effect that an entitlement under a will as a residual beneficiary did not amount to an interest in the property. The wife had a beneficial interest in her mother’s estate, but not in any specific asset of the estate.

Thanks for reading.

Paul Trudelle