Part V of the Ontario Succession Law Reform Act (SLRA) is such a powerful piece of legislation that it is easy to forget that it nonetheless has limitations. While life insurance proceeds and jointly held properties are often caught by s. 72 (and therefore deemed to be estate assets for the purpose of calculating support), such is not always the case.

As an example, take proceeds of life insurance. To be caught by s.72(1)(f) of the SLRA, “any [such] amount [must be] payable under a policy of insurance effected on the life of the deceased and owned by him or her.”

In Madore-Ogilvie (Litigation Guardian of) v. Ogilvie Estate, the Ontario Court of Appeal clarified that a joint held (or “first to die”) life insurance policy was not “owned” by the deceased. As such, it was not caught by s. 72:

In reaching this conclusion, I begin by noting that, on a plain reading of s. 72(1)(f), it does not apply to the second policy. That policy was not owned by the deceased; it was jointly owned by him and Mary Ogilvie. Further, s. 72(1)(f) refers to a policy “effected on the life of the deceased” whereas the jointly owned policy was effected on the lives of both co-owners.

Apart from the plain reading of the statute, the Court of Appeal considered competing entitlements and the over-arching intention of the legislation:

Manifestly, [s. 72] was intended to ensure that the maintenance of a dependant is not jeopardised by arrangements made, intentionally or otherwise, by a person obligated to provide support in the eventuality of his death. It is designed to alleviate the hardship that can be visited on a dependant by causing money or property to pass directly to a beneficiary (donee or joint tenant) and not as part of the estate.

The second policy was not an arrangement that was made to jeopardise the maintenance of the deceased’s dependants. Given the financial circumstances of the deceased and Mary Ogilvie, the second policy was a reasonable and sensible measure to ensure that the survivor of the two had the capacity to pay the first mortgage on the matrimonial home.

Thanks for reading,

David Morgan Smith