Last week, my colleague, Tsvetomira Niklin, blogged here about a surviving spouse’s equalization rights in Ontario under the Family Law Act (the “FLA”).
The core requirements are for the surviving spouse, within six months from the deceased’s death, to elect to (i) receive the entitlement under section 5 of the FLA, the entitlement being one-half the difference between the deceased’s net family property and the surviving spouse’s net family property if the former exceeds the latter, or (ii) take under the will, or, if there is no will, to take on an intestacy under Part II of the Succession Law Reform Act.
Though generally a final decision, it is possible for the election to be revoked in restrictive circumstances, as the case below indicates.
In Iasenza v. Iasenza Estate, it was noted that there are conflicting authorities on the issue of whether an election is irrevocable or whether the court has a residual discretion to set it aside. The Judge in this case reviewed the case law and pronounced that the court does have the residual discretion “in restrictive circumstances where the interests of justice require it and where the balance of the interest of effected parties clearly warrants it”. Further, the Court stated that in exercising the discretion the court should have particular regard to the following:
[25] …
(a) Was the election filed as a result of a material mistake of fact or law made in good faith?
(b) Was there any responsibility or culpability on the part of effected parties in relation to the election?
(c) Was the notice of intent to seek revocation of the election given in a timely way and, in particular, how long after the 6 month filing period was such notice given?
(d) Has the estate been distributed or would interested parties otherwise be adversely effected by a revocation of the election?
(e) Does the election result in an injustice to the surviving spouse in all of the circumstances?
The Court in that case considered these questions and found as a fact that there was a material misunderstanding or lack of knowledge as to what assets would form part of the estate. The Court also considered the remedial nature of the FLA, being designed to enlarge the rights of a surviving spouse. Accordingly, the election filed was set aside and declared of no force and effect.
The challenge in satisfying all of these considerations serves as a helpful reminder to us as counsel to ensure that our clients have fulsome financial disclosure from the estate trustee prior to making the election and, if not, to seek an extension to elect in advance of the limitation period deadline.
Thanks for reading and have a great day,