Category: Common Law Spouses

08 Sep

Bad Romance: Dependant Support

Hull & Hull LLP Common Law Spouses, Estate Planning, Hull on Estate and Succession Planning, Trustees, Uncategorized, Wills Tags: , , , 0 Comments

“Can a romantic partner – even one in an apparently close and loving relationship for several years – make a claim for dependant relief without establishing that she actually lived together with the deceased for at least three years?”

This was the question raised in the recent decision of Stajduhar v. Kerzner Estate, 2017 ONSC 4954.

Spoiler alert: the answer is no.

As reported in the decision, the deceased died on December 31, 2016. The deceased died leaving a Will made three years after the relationship was alleged to have commenced, which did not provide for the claimant. The deceased’s estate passed to his two children from a prior marriage.

The main issue in the proceeding was whether the claimant met the definition of “spouse” set out in the Succession Law Reform Act. The definition incorporates the definition of “spouse” from the Family Law Act, s. 29. There, “spouse” is defined as including “either of two persons who are not married to each other and have cohabited … continuously for a period of not less than three years”. “Cohabit” is defined in the SLRA as meaning “to live together in a conjugal relationship, whether inside or outside marriage”.

The respondents disputed whether the claimant and the deceased lived together continuously for the required three year period. They maintained separate residences. Although this is not conclusive, and parties can have separate residences and still be found to be spouses, the case states that “living together implies something more than having conjugal relations, spending time together or doing so for a long time.”

The claimant was unable to provide sufficient corroborated evidence to support a finding that she lived together with the deceased for the requisite period.  The court concluded that “The evidence simply fails to establish the core and necessary fact that [the claimant] and [the deceased] lived together in any arrangement capable of being so described.  They needn’t have had a single residence. They needn’t have never been apart. There must however be evidence of an arrangement that, viewed as a whole, can fairly be described as “living together”. Such evidence should be capable of some objective verification and not rely almost entirely upon self-serving general statements of conclusion.”

The application was dismissed with costs. Although the estate trustee incurred costs of over $75,000, they agreed to limit costs to $25,000. The claimant unsuccessfully tried to oppose these costs on the basis of impecuniosity.

Thank you for reading.

Paul Trudelle

22 Aug

Cohabitation and Marriage

David M Smith Common Law Spouses, Estate & Trust, Support After Death, Uncategorized Tags: 0 Comments

While not all married spouse cohabit, most do.  How does the law view the distinction when considering remedies on the death of a spouse?

Under the Family Law Act, section 5(6) speaks to the circumstances under which the Court may exercise its discretion to determine that an equalization of net family property would be unconscionable.  One of the criteria is set out in s. 5(6)(e): “the fact that the amount a spouse would otherwise receive…is disproportionately large in relation to a period of cohabitation that is less than five years.”

Under the Succession Law Reform Act, section 62(1)(g), a determination of the quantum of support that a dependant spouse is entitled to will vary depending on “the proximity and duration of the dependant’s relationship with the deceased.”  And s.62(1)(r): “if the dependant is a spouse, (ii) the length of time the spouses cohabited.”

As is always the case, the specific facts of a case are relevant to the application of the law.  In Mokhorya v. Mokhoria, 2010 ONSC 893, [2010] O.J. No. 1024, the parties were married five-and-a-half years, from the date of their marriage in Russia, to the date of separation. Although they did not cohabit until the wife immigrated to Canada a year after the marriage, the only thing that kept them apart was her immigration status.  Therefore, the court determined that s.5(6)(e) had no application to the case.  Even if the marriage were four-and-a-half years, as the husband contended, the court could not conclude that an equalization of net family properties would be unconscionable on the facts.

The bottom line is that cohabitation matters and will have a bearing in many cases (with notable exceptions such as Mokhorya) on the statutory remedies available to a surviving spouse.

Thanks for reading.

David Morgan Smith

Other articles you might be interested in :

https://hullandhull.com/2017/07/occupation-rent/

https://hullandhull.com/2016/11/revocation-will-marriage-saskatchewan/

11 Aug

The Chambers Global Private Wealth Guide

Nick Esterbauer Charities, Common Law Spouses, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, News & Events, Pension Benefits, Power of Attorney, RRSPs/Insurance Policies, Trustees, Wills Tags: , , , , , , , , 0 Comments

Earlier this year, Ian M. Hull, Suzana Popovic-Montag and I contributed the law and practice content for the Canada chapter to the Chambers and Partners 2017 Global Private Wealth Guide.

The Global Private Wealth Guide includes a chapter for nineteen different countries and features practical information regarding tax issues, succession law, the status of trusts, business and charitable planning, and the role of fiduciaries in each jurisdiction.  The Guide also features a profile page for each country, in which general information related to relevant business practices is summarized.

The Private Wealth Guide is a helpful tool for lawyers assisting clients who may hold property or business interests in multiple jurisdictions.  Among the interesting features of the website for the Guide is the option of comparing the treatment of each issue between two or more jurisdictions.  For example, it offers the opportunity to obtain quick and reliable information regarding any differences between the treatment of marital property in Canada and the United States.

A complete electronic copy of the guide is available here.  A link has also recently been added to the resources section of our website.

Thank you for reading and have a great weekend.

Nick Esterbauer

18 Jul

What Value? The Surviving Spouse’s Interest in the Estate Residence

David M Smith Common Law Spouses, Estate & Trust, Estate Planning, Litigation, Uncategorized Tags: , , , , 0 Comments

Cohabitation Agreements and Marriage Contracts typically operate to ensure that spouses, be they common law or married, do not benefit in the estate of the survivor other than as provided for in a Will.  For example, where a Will is not made, and if the parties are married, the domestic contract will need to provide that the surviving spouse is precluded from receiving the preferential share that would otherwise pass to him or her.

Despite the best intentions of the parties to such contracts, difficulties may nonetheless arise on the death of a spouse even where the surviving spouse has every intention of abiding by the agreement.

One such example of a common problem that may arise relates to the purchase or “buy-out” of the surviving spouse’s interest in real estate in which the estate has an equal interest.  The problems that the parties may encounter include:

  • at what date is the value of the property to be determined?  The date of death or the date of the hearing which may be many months later
  • Are adjustments to be made  for any reason? and
  • Should the purchase priced be adjusted to account for occupation rent and, if so, how is the occupation rent calculated?

In Psarros Estate v. Cook, Justice Akbarali of the Ontario Superior Court of Justice considered these questions and, on the facts of the case, concluded:

  • It was an implied term of the Marriage Contract that appraisals be carried out “within a reasonable time of the decision to sell one party’s interest to the other.”  As such, the fair market value was calculated as of November, 2013 rather than 2017;
  • In this case there was insufficient evidence to consider adjustments; and
  • Occupation rent, if any, is offset by the estate’s share of the expenses incurred by the surviving spouse and occupant.

Thanks for reading,

David Morgan Smith

Other blog posts that may be of interest:

Does Jointly Owned Property Pass to the Surviving Spouse?
Equitable Relief for Common-Law Spouses
The Rights of Common Law Spouses under the Charter

04 Jul

Severing Joint Tenancy: Pitfalls to Guard Against

David M Smith Beneficiary Designations, Common Law Spouses, Estate Planning Tags: , , , 0 Comments

Joint tenancy is a great way for parties to hold property when there is a common desire to pass the property by right of survivorship to the surviving joint owner.  However, when the relationship between the parties fails, proactive steps must be taken to sever the joint tenancy to ensure that the title-holding reflects the new reality of the dissolved relationship. Case law is littered with examples of spouses who did not take such steps.

MacNeil Estate v. Bower, a recent decision of the Ontario Superior Court of Justice, is a good example of how litigation can ensue when arrangements don’t fully keep pace with the reality of a failed relationship.  In this case, Robert and Mark began a conjugal relationship began in 1995 and the relationship progressed such that Robert designated Mark as beneficiary of his RRSP and group life insurance in 2007.  In 2008, Robert and Mark purchased a property as joint tenants, notwithstanding that Robert contributed the entire down payment approximating about 20% of the value of the property. In 2010, the relationship between the two ended and Robert entered into a new relationship.  Thereafter, Robert became seriously ill and began to arrange his affairs such that he changed his beneficiary designations and sought legal advice to draft an agreement changing title to the townhouse to tenancy in common.

Litigation ensued because the Agreement was not finalized and executed before Robert died.  Mark claimed right of survivorship as title was still held in joint tenancy.  Robert’s Estate Trustee argued that the joint tenancy had in fact been severed regardless of the incomplete status of the Agreement.

Severing joint tenancy requires one of: (i) a unilateral act affecting title, (ii) a mutual agreement between the co-owners to sever the joint tenancy, or (iii) any course of dealing sufficient to clearly demonstrate or intimate that all owners’ interests were mutually treated as constituting a tenancy in common.  In MacNeil, the Court found that both the second and third types of severance were realized.

Thanks for reading,

David Morgan Smith

23 Jun

Dependant Support Claims, Limitation Periods and the Vesting of Real Property

Umair Common Law Spouses, Estate & Trust, Executors and Trustees, In the News, Litigation, Support After Death, Trustees Tags: , , , , , 0 Comments

We have previously blogged about the limitation period that applies to claims for dependant support under Part V of the Succession Law Reform Act (“SLRA”), and the circumstances in which the Court will exercise its discretion to extend the period.

In the recent decision of MacDonald v Estate of James Pouliot, 2017 ONSC 3629, the Honourable Justice Nightingale considered whether the limitation period could be extended for a dependant’s support claim where the real property owned by the deceased had already vested in a beneficiary, by operation of section 9 of the Estates Administration Act.

Limitation period for dependant support claims

Under subsection 61(1) of the SLRA, no application for  dependant support can be made more than six months after probate has been granted.

However, subsection 61(2) provides the Court with the discretion to allow an application to be made at any time “as to any portion of the estate remaining undistributed at the date of the application.”

As we have previously blogged, the Court has generally interpreted section 61(2) to allow claims that are made more than six months after probate as against the assets that remain undistributed as of the date of the application.  In one recent decision, the Court granted leave even though the assets of the estate had been distributed due to the conduct of the estate trustee.

The issue in Pouliot

In Pouliot, the Applicant (“Mary”) was in a common-law relationship with the Deceased for 22 years. The Deceased died intestate on September 10, 2013.

The primary asset of the Estate was a house (the “Home”) that Mary and the Deceased purchased together in 1999. Although each contributed to half of the cost of the Home, title to the Home was in the name of the Deceased. The Court found that Mary and the Deceased shared the expenses of the Home during their relationship. Following the Deceased’s death, Mary continued to live at the Home and made all of the monthly mortgage payments on the Home.

As the Deceased died intestate, and given that common-law spouses do not inherit on an intestacy, the Deceased’s son was the sole beneficiary of the Deceased’s Estate. The Deceased’s son (the “Estate Trustee”) obtained probate on June 8, 2015. Mary commenced her Application on November 10, 2016, seventeen months after probate was granted.

Mary’s Application sought a declaration that she had an equal interest in the Home by way of a constructive or resulting trust. Mary also sought support as a dependant pursuant to Part V of the Succession Law Reform Act. The Estate Trustee opposed Mary’s Application, arguing that it was statute-barred due to section 61 of the SLRA and section 9 of the Estates Administration Act.

Under section 9(1) of the Estates Administration Act, real property that has not been disposed of, conveyed to, divided or distributed amongst the persons who are beneficially entitled to it within three years after the death of the deceased owner automatically vests in such persons. Mary’s Application was commenced more than three years after the Deceased’s death.

In the circumstances, although Mary was successful in her claim that she held an equal interest in the Home, Justice Nightingale held that “the applicant’s SLRA claim in this proceeding is barred as it relates to the only property of the estate that has already vested in the respondent….”

The Court concluded that there were no assets in the Estate against which an order for support could be made in Mary’s favour.

Thank you for reading,

Umair Abdul Qadir

Other blogs you may enjoy:

30 May

Contracting Out of Statutory Entitlements?

David M Smith Beneficiary Designations, Common Law Spouses, Estate Planning, Pension Benefits, RRSPs/Insurance Policies, Uncategorized Tags: , , 0 Comments

As an estate planning tool, legal and financial advisors often impress upon their clients the benefits of designating beneficiaries of certain instruments such as RRSPs, TFSAs, and life insurance policies. In the absence of a beneficiary designation, the proceeds will fall into the estate and attract Estate Administration Tax and be available to creditors of the Deceased, possibly thwarting the objectives of the estate plan.

Pensions, however, are a special case.  Like Part V of the Succession Law Reform Act, section 48(7) of the Pension Benefits Act is remedial in nature and contemplates the necessity to provide safeguards for surviving spouses, including common law spouses.  In short, if a beneficiary is not designated on the death of a member of a pension plan, the proceeds do not fall into the estate; rather, the surviving spouse is entitled to the asset.

But what if the spouses have entered into a cohabitation agreement prior to the relationship?  What kind of language will suffice to contract out of this statutory entitlement if the pension plan member had not designated a beneficiary during his or her lifetime?

In Burgess v. Burgess Estate, the Ontario Court of Appeal considered whether a former wife of the deceased was entitled to receive all of the benefit available under the deceased’s deferred profit sharing plan for which she was the sole designated beneficiary, or whether she was entitled only to one-half of the benefit in accordance with the parties’ separation agreement, which read as follows:

“Except as specifically provided, neither the Husband nor the Wife will make a claim to a share in any pension of the other, including but not limited to any company pension plans, registered retirement savings plans and registered home ownership plans, provided that the Wife shall be entitled to one-half of the benefits under the Husband’s deferred profit sharing plan.” (emphasis added)

As a result of the express and specific wording of the separation agreement, the Court concluded that the former wife was restricted to receiving half of the benefit.

Following the principle in Burgess, the Ontario Superior Court of Justice in Conway v. Conway Estate, concluded that the separated spouse in similar circumstances was entitled to receive the pension benefit when there was no express reference in the Separation Agreement precluding her entitlement:

“…there is no provision like the one in Burgess. There is no express term which has the effect of revoking the designation of [the separated spouse] as beneficiary of the pension benefit or precluding her from receiving the benefit as beneficiary.” (emphasis added) (at para. 26)

Accordingly, having regard to the foregoing authorities, in order for a spouse to contract out of a benefit, the Court would appear to require specific and express language to such effect. A general release will not be sufficient.

It is a nice question whether a statutory entitlement under the Pension Benefits Act is to be considered as being in exactly the same category as a beneficiary designation.  Certainly the plan which passes to the recipient is the same in either case and, arguably, the hurdle for contracting out of a statutory entitlement may be higher as compared to a beneficiary designation.  In any event, the caselaw should be equally applicable to either situation

Thanks for reading,

David Morgan Smith

Other Articles You Might Be Interested In

The Ontario Retirement Pension Plan – Implementation and How It Works

The Proposed Made-In-Ontario Pension Plan

Pension Plans Take a Hit: The Chain Reaction that Follows

 

08 May

Common law relationships – they’ve come a long way, but not as far as you may think

Ian Hull Common Law Spouses Tags: , 0 Comments

According to Statistics Canada, between 2006 and 2011 the number of common-law couples rose 13.9%, more than four times the 3.1% increase for married couples.

The trend is clear – more people are choosing to skip the formalities of a marriage and move in together. No cost, no ceremony, no family fights about who’s invited – plus, it’s really the same as marriage, isn’t it?

Not so fast…

Common law couples need to think very carefully about the what their union means from a financial perspective, especially as time passes, their assets grow, and children enter the picture. Because in many cases, it’s not the same as marriage.

Yes, from a tax perspective, the Canada Revenue Agency treats married couples and common-law couples the same. But looking beyond tax events to other life events, such as separation and eventually death, the treatment may be very different indeed.

This recent article provides an excellent summary of what can happen to assets when a common-law couple separates.

http://business.financialpost.com/personal-finance/why-confusing-common-law-relationships-with-marriage-can-be-a-costly-mistake

In terms of estate matters, the article below provides a clear overview of how estate laws differ across the country – and the impact of these differences on common law couples when one spouse dies.

http://www.advisor.ca/tax/estate-planning/estate-planning-pitfalls-for-common-law-partners-163166

In today’s world, it’s great to have a choice in how we form couple relationships. My only advice is that couples ensure they’re making an informed choice – and that they have a clear understanding of what their marriage or common law decision could mean in the future.

Thanks for reading,

Ian M. Hull

Other Articles You Might Be Interested In

Common Law Spouses’ Rights to Property

Common Law Spouses – Not all relationships are created equal

Common Law Spousal Property Entitlements Prior to Death

02 Nov

Revocation by Marriage in Saskatchewan

Suzana Popovic-Montag Common Law Spouses, Estate Planning, Wills Tags: , , 0 Comments

A recent decision of the Saskatchewan Court of Appeal paraphrases an interesting provision (s.17) of the Saskatchewan Wills Act: “Once a testator cohabits continuously for two years and then makes a will, the law presumes the testator has turned his or her mind to the question of disentitling one’s spouse and, if the parties subsequently marry, the marriage does not revoke the prior will.”

When marriage does not revoke a prior will
“Once a testator cohabits continuously for two years and then makes a will, the law presumes the testator has turned his or her mind to the question of disentitling one’s spouse and, if the parties subsequently marry, the marriage does not revoke the prior will.”

In Santiago v Trottier 2016 SKCA 113, the daughter of the deceased (Dawn) appealed the lower court’s finding that her father’s will was revoked by his marriage. Roy Trottier died in 2012, survived by his wife, Paulette, and his two children from a previous relationship. In 1998, Roy and Paulette began to cohabit. Around the same time, Roy made a will in which his two children were appointed executors and primary beneficiaries, with some specific bequests to Paulette. Roy and Paulette married in 2012, after Roy was diagnosed with cancer. Roy died shortly thereafter.

Section 17(3) reads as follows: “[revocation by marriage] does not apply where the testator marries a person with whom he or she is cohabiting and has cohabited in a spousal relationship continuously for two years.”

Dawn’s argument was not without merit. Her submission was that, on a plain reading of the statute, Paulette and Roy had married each other after having cohabited in a spousal relationship continuously for many years. As such, Dawn submitted that subsection 17(3) should operate to prevent the 1998 will from being revoked by the marriage.

The Court of Appeal upheld the decision of the lower court, which found that the marriage did in fact revoke the 1998 will. The decision is complicated by the fact that the cohabitation provision was proclaimed in force in 2001, after the 1998 will was made. Both the lower court and the appeal court found that the making of the 1998 will prior to the spousal relationship was a key factor. Essentially, the lower court and appeal court concluded that the presumed intention of common law and married spouses to contemplate their obligations to one another would be defeated if Dawn’s argument prevailed. To quote from the appeal decision: “…the Chambers judge settled upon an interpretation that best conforms to achieving equality between married and common law couples.”

It is important to review a will or estates plan periodically, particularly after major life events, such as marriage, cohabitation, or the birth of a child. We have previously blogged on the effect of marriage on a will and estate planning after a second marriage.

Thank you for reading.

Suzana Popovic-Montag

18 Oct

Weigand v. Weigand Estate: Limitation Periods and Dependant Support Claims

Laura Betts Common Law Spouses, Estate Planning, Executors and Trustees, Litigation, Support After Death Tags: , , , , , 0 Comments

Section 61(1) of the Succession Law Reform Act (the “SLRA”) provides that an application for dependant’s support must be made within 6 months from the issuance of the Certificate of Appointment of Estate Trustee (also known as “Probate”).

An application may be made beyond the six-month limitation period, with leave as, s. 61(2) of the SLRA provides the Court with discretion to allow an application to be made by a dependant “at any time with respect to any portion of the estate remaining undistributed at the date of the application”.

Weigand v. Weigand Estate, 2016 ONSC 6201, deviates from prior case law, granting leave for an application for support, after assets of the estate had been distributed.
“Generally, case law has interpreted s. 61(2) to limit any claim made after six months to the remaining, undistributed portion of the estate, and to bar any claim made after the assets have been fully distributed.”

Generally, case law has interpreted s. 61(2) to limit any claim made after six months to the remaining, undistributed portion of the estate, and to bar any claim made after the assets have been fully distributed. Paul Trudelle previously blogged on this application of s. 61(2).

The recent decision of the Ontario Superior Court of Justice in Weigand v. Weigand Estate, 2016 ONSC 6201, deviates from this prior case law, in that it grants leave for an application for support, despite the fact that the assets of the estate had already been distributed.

In that case, the Deceased died on May 5, 2013. He was survived by his common law spouse and three children from a prior marriage. The Deceased left a Will, in which he named his common law spouse the Estate Trustee and sole beneficiary of his Estate. The Estate consisted of the matrimonial home, two promissory notes and the Deceased’s bank accounts.

The common law spouse obtained probate on November 5, 2013 and took steps to administer the Estate. Eleven months after the Estate had been fully administered, two of the Deceased’s three children brought an Application for leave to advance their respective claims for dependant support. They alleged to have been misled by the common law spouse and provided Affidavit evidence, which was corroborated by evidence from their grandfather. Specifically, they alleged that the common law spouse had told them she intended to sell the house and distribute the proceeds equally among the Deceased’s children. They relied on her promise, to their detriment, as the home was subsequently transferred into the common law spouse’s name after the limitation period had expired.

In deciding to grant leave, George J, stated that the discretion to extend (or refuse) is a question of what is equitable between the parties, in all the circumstances (para. 32). He stated that it would be wrong to allow the respondent to rely on the fact that she has distributed the Estate as a basis to not grant an extension and that it would be unconscionable to allow her to defeat a claim by virtue of a passed limitation period (para 34). He also reasoned that it was inconceivable that the language used in s. 61(2) was intended to shield administrators who engage in such behaviour (para 34).

Thank you for reading.

Laura Betts

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