What happens when someone who is left a life interest doesn’t want to use it? Does the executor still have to wait for the life tenant to die before distributing the property to the person who is ultimately to receive the property after the life tenant’s death, or does the act of the life tenant indicating they don’t intend to utilize the life interest accelerate the gift to the remainder person?
In Roberts v. Roberts Estate, 1993 CanLII 4671 (NSSC), the court confirms that a bequest to the remainder person can be accelerated if a life tenant disclaims their interest, stating:
“Where the person having the life interest disclaims his/her interest, there is ordinarily no further reason for postponing a residuary interest and acceleration may take place unless there is a contrary expression to be found in the words of the will.”
The potential “acceleration” of a bequest to a remainder person upon the life tenant disclaiming their interest in the property was also confirmed in Re Brannon Estate, 1991 CanLII 1622 (BCCA), wherein the British Columbia Court of Appeal summarizes the law as follows:
“…on the premature determination of the particular interest the subsequent interests are accelerated unless there is an intention to the contrary.”
In Skerrett v. Bigelow (Estate of), 2001 NSSC 116, the court confirms that with respect to the potential acceleration of a life interest a “disclaimer” and “forfeiture” are to be treated the same, and that the effect of the acceleration is to be the same result as if the life tenant died, stating:
“A disclaimer of a life interest is a premature determination of the life interest in the same way as a forfeiture of a life interest prematurely determines the interest. In both cases, unless a contrary intention appears, the remainder interests vest in the same way as they would have vested upon the contemplated determination, death of the beneficiary of the life interest.”
As a result of the doctrine of acceleration, when a life tenant does not intend to utilize their life interest their interest can potentially be extinguished, with the Estate Trustee accelerating the bequest to the remainder person as if the life tenant had died.
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