The notion that testamentary freedom is entrenched in Canada contains a caveat: the freedom to dispose of assets has been restricted by statute and legal principles. One such principle limiting freedom to distribute your estate is the doctrine of public policy.

The doctrine of public policy is usually deployed to void bequests deemed to be in violation of public decency or ones attaching offensive conditions to gifts. The reasoning is that the person making the bequests cannot compel an estate trustee or a beneficiary to do something contrary to public policy. The Court in McCorkill v. Streed, Executor of the Estate of Harry Robert McCorkill (aka McCorkill), Deceased, 2014 NBQB 148 (“McCorkill“) stated that bequests against public policy are those “when the law refuses to enforce or recognize them, on the ground that they have mischievous tendency so as to be injurious to the interests of the state, apart from illegality and immorality.”

In McCorkill, the bequest was the residue of an estate left to a white supremacist group in the United States called the National Alliance (a Virginia Corporation). The New Brunswick judge found through the evidence presented at the hearing that the National Alliance was a “neo-Nazi group … that promotes a political program parallel to the … National Socialist Party of Germany … including genocide, ethnic cleansing and the use of hate motivated violence and terror to achieve its aims.” The judge found that such activities would be illegal in Canada, both pursuant to the Criminal Code and Human Rights legislation. For these reasons, the judge held that the bequest to the National Alliance was void as it was contrary to public policy. This decision was upheld by the New Brunswick Court of Appeal.

Other examples of bequests that were declared void on the grounds of public policy include:

• a bequest which stated that a child will inherit if he or she is no longer living with a named parent;
• a bequest that imposed a condition or restriction on who (or what faith) a beneficiary could marry or remain married to;
• a bequest that was conditional on a person changing membership in a named church or faith;
• a bequest that established a foundation to provide financial aid only to male persons (females could only receive 25% of the maximum of amount available to males) and who were Caucasian, Protestant and of British heritage was modified by the Ontario court to delete these restrictions but allowed the financial aid. The court amended the terms of the foundation’s mandate to require it to provide equal financial aid to all persons who applied.

Of course, the decision in McCorkill stands in contrast to an opposite finding (on different facts) of the Ontario Court of Appeal in Spence v. BMO Trust Company. In that case, the Ontario Court of Appeal noted the key distinguishing characteristic of McCorkill: “In McCorkill, the implementation of the testator’s intentions would have facilitated the financing of hate crimes, contrary to Canada’s criminal and human rights laws, by funding an organization dedicated to such illegal and discriminatory ends – an unworthy heir. “

Thank you for reading.

David Morgan Smith and Chigozie Enwereuzo (student-at-law)