Category: Support After Death

05 Dec

Interim Support – The Intersection of Spousal Support & Dependant’s Support

Rebecca Rauws Support After Death Tags: , , , , , , , , , 0 Comments

In the recent decision of Gabourie v Gabourie, 2019 ONSC 6282, the court considered a motion for (among other things) interim support by the deceased’s separated spouse.

The applicant wife had separated from her spouse (now deceased) approximately two years prior to his death in March 2018. At the time of the deceased’s death, he and the applicant had been in the process of negotiating the terms of their separation and divorce. They had already entered into an interim separation agreement, which dealt with the proceeds from the sale of their matrimonial home. After the deceased’s death, the applicant and the respondent (who was the deceased’s sister, estate trustee, and sole beneficiary)  were able to agree on the issue of equalization of net family property, and a payment was made to the applicant. The issue of spousal/dependant’s support remained outstanding.

The applicant sought a lump sum interim support payment of $50,000.00. Ultimately, the court awarded the applicant interim support of $30,000.00.

Providing Support or Under a Legal Obligation to Provide Support

The fact that the spouses had been separated at the time of the deceased’s death was considered as part of the court’s determination of whether the applicant was a “dependant” (specifically as to whether the deceased was providing support to her, or was under a legal obligation to provide support to her, immediately before his death) and whether the deceased made adequate provision for the applicant’s support.

The court found that there was no evidence that the Deceased had been actually providing support to the applicant prior to his death. They had been separated for two years; in that time the deceased had several health complications and lost his job. He was not supporting the applicant, nor was the applicant relying on him for support. However, spousal support remained an issue to be resolved as part of the separation between the deceased and the applicant. The court stated that there was no evidence that the applicant had waived her right to spousal support, and that, as a married spouse, the deceased was under a legal obligation to support the applicant.

Amount of Interim Support

In arriving at the amount of interim support awarded to the applicant, the court considered the financial circumstances of the deceased’s estate, and of the applicant. Based on preliminary disclosure from the respondent, the Deceased’s estate had a value of approximately $650,000.00, as well as an insurance benefit of $75,000.00. The applicant’s net worth was around $220,000.00, and she earned only a modest part-time income. The applicant also had a significant amount of debt relative to her assets, which the applicant submitted she was required to incur as she was not receiving spousal support and was unable to meet her expenses.

However, the court was mindful of the amount of support sought relative to the value of the estate. The applicant sought $50,000.00, stating that this amount was sought for legal fees that she had incurred in pursuing her dependant’s support claim.

The court was disinclined to award the applicant the full amount sought given the stage of the proceeding, and that it was not yet known whether the applicant would succeed on her application, stating that it was nearly seven percent of the value of the deceased’s estate.

Thanks for reading,

Rebecca Rauws

 

These other blog posts may also be of interest:

29 Nov

When Administering an Estate, Don’t Let Things Drag

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Support After Death, Trustees, Uncategorized, Wills 0 Comments

My father used to have a saying: “Whatever drags gets dirty.” He would trot it out whenever one of us waited too long to do something and as a result, doing that thing became messy, complicated or impossible. For example: I was supposed to mail a letter. I didn’t mail the letter. Now I can’t find the letter. “Whatever drags gets dirty!”. Thanks, Dad.

Growing up, I thought that this was a widespread adage. Apparently, it isn’t. I searched it up on the internet and most of the results referred to Rupaul’s “Drag Race”.

The adage may fittingly sum up the lesson contained in the decision of the Nova Scotia Court of Probate in Kelly Estate, 2019 NSPB 1 (CanLII).

There, the deceased’s daughter and estate trustee, Carrie, brought an application for the possession of an urn containing the cremated remains of the deceased. The deceased died 13½ years before the application. Probate was granted 8 years before the application.

In the deceased’s will, cremation was requested, and Carrie was expressly given “the powers to decide what will happen with the said ashes.” This was consistent with the court’s observation that “Disposition of the deceased is one of the most fundamental tasks an executor/rix can undertake on behalf of the deceased.”

However, after the deceased’s death, the ashes were taken by Carrie’s sister, Cheryl. They remained at Cheryl’s home, apparently with the acquiescence of Carrie. The court noted that there was no evidence to suggest that there were prior attempts by Carrie to regain custody and control of the ashes over the 13½ years since death.

The court cited the BC decision of Re Popp Estate, 2001 BCSC 183 (CanLII) where the deceased’s husband, as estate trustee, was said to be entitled to control the disposition of the deceased’s remains, provided he did not act capriciously. As the husband was acting capriciously, he lost the right to deal with his spouse’s remains.

The court went on to find that by allowing the urn to remain in Cheryl’s possession for 13½ years, Carrie as estate trustee had in fact determined the disposition and final resting place of the urn: with Cheryl. A change of Carrie’s decision this late in the game “seems capricious at best or malicious at worst”, and the court was not prepared to order a transfer of the urn from Cheryl to Carrie.

When administering an estate, as in life in general, don’t let things drag.

Thanks for reading.

Paul Trudelle

06 Sep

No Love Lost: Sisters, Parents, Loans and Forgiveness

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Support After Death, Trustees, Wills 0 Comments

“There is no love lost between sisters [K] and [A].” So starts the endorsement in Nutzenberger v. Pryde, 2019 ONSC 5030 (CanLII).

There, the parents made a loan to A of $75,000. In their wills, the residue of the estate is to pass to the surviving parent. Both wills contained a clause that provided that if the other spouse was not living on the 30th day following the first spouse’s death, the $75,000 was to be forgiven.

Mother died on September 25, 2015. Father died on May 30, 2016.

K, as estate trustee of mother’s estate, brought a claim against A for the repayment of the loan. A moved for summary judgment on the claim.

Justice Harris agreed that summary judgment was appropriate. There were no primary facts in dispute, and no credibility issues. He dismissed the claim on two basis: first, mother’s estate had no standing to bring the claim, and second, the loan had been forgiven according to the terms of the wills.

On the first point, the loan came from father’s assets. Any interest that mother had in the loan passed to father under the terms of her will. Only father, or father’s estate had standing to pursue the loan.

Secondly, although the terms of the wills forgiving the loans were not “a model of drafting dexterity, to put it mildly”, the court interpreted the wills to mean that the intention of the parents was that either one could call in the loan while alive, but upon the death of the survivor, if no action was taken, the loan would be forgiven.

In determining the intention of the parties, the court looked at other terms of the wills. One term in both wills gave the estate trustee the discretion to pursue a loan. Another term acknowledged that a certain advance was in fact a gift. The term in question was “an awkward hybrid”. However, the court was able to conclude that the intention was that the loan would be forgiven if the surviving parent did not take any steps to collect on it.

As usual, more careful drafting may have avoided the litigation.

Thank you for reading.

Paul Trudelle

13 Aug

Severing a Joint Tenancy – A Loosening of the “Course of Dealing” Rule?

Natalia R. Angelini Estate & Trust, Estate Litigation, Estate Planning, Support After Death, Trustees, Uncategorized, Wills Tags: 0 Comments

There are three ways in which a joint tenancy may be severed (Hansen Estate v. Hansen):

  1. Unilaterally acting on one’s own share (e.g. selling or encumbering it).
  2. A mutual agreement between the co-owners.
  3. Any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.

In Marley v. Salga, the Court addressed the third manner in which to sever joint title – by course of dealing. In this case, there were competing applications brought by Ms. Marley, the deceased’s widow, on the one hand, seeking sole legal and beneficial ownership of the matrimonial home, and by the deceased’s children from a prior marriage, on the other hand, seeking an order that the estate is entitled to a half interest in the property as a tenant-in-common.

The Court declared that the estate was entitled to a half-interest in the property as a tenant in common. The evidence considered to determine the issue included a deathbed conversation between deceased and Ms. Marley, in which Ms. Marley acknowledged the deceased’s wish to divide the property 50:50 between his children and Ms. Marley. The Court seemed to place great weight on this evidence, finding that the deceased and Ms. Marley “were in agreement as to how the property should be handled on his death.” One commentator criticizes the Court for accepting that Ms. Marley was prepared to compromise her property rights “…on the basis of soothing words spoken to her husband on his deathbed without fully understanding her rights, without the benefit of any advice as to the consequences that would result to her and without any compensation or consideration for the loss of those rights.”

Another consideration for the Court was the language of the deceased’s Will, which allows Ms. Marley to occupy the deceased’s half of the property on certain terms, purports to terminate her rights in certain circumstances, and provides for the sale of the property. The Will’s language assisted in swaying the Court, as the Court treated it as a piece of evidence used to discern if there was a common intention, and it inferred that the provision in the Will was known to Ms. Marley. This rationale has been the subject of debate as (i) a testamentary disposition cannot sever a  joint tenancy and should not be relied upon as evidence of a mutual intent, and (ii) there does not seem to have been evidence of both spouses taking steps showing a mutual treatment of their co-ownership as a tenancy in common.

If appealed, we may get some helpful clarification on this important issue.

Thanks for reading,

Natalia Angelini

15 Jul

Where There’s a Will to Contract, There’s a Contract to Will

David M Smith Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Mutual Wills, Support After Death, Trustees, Uncategorized, Wills 0 Comments

In researching common errors in will drafting, we recently stumbled (as one often does through research) on the following question:

In the case of mutual wills, what happens in the event of remarriage?

Mutual wills operate as a contract. Simply put, the terms of the contract are that absent any revocation during the joint lives of the parties, the survivor will not revoke thereafter. The conundrum then becomes: If a will by its very nature is revocable, and wills are automatically revoked by marriage, what then happens to the agreement in the event of a second or third marriage?

The question at hand is best described with an example:

Jane has two children from a prior marriage, as does John. John and Jane get married and draft wills. The wills of Jane and John are identical except for some names and dates and include an agreement that says in part, that if John dies, all assets will be transferred to Jane absolutely, and when Jane dies all assets shall be divided equally among their four children. When John dies, his assets vest in Jane, and her will is now locked such that changing it would frustrate the terms of her agreement with her now deceased husband. But what if then Jane meets and marries Oscar? If all prior wills are null. . . Now what?

The courts have wrestled with the concept of mutual wills since the death of Lord Horatio Walpole in 1797. In his will of 1756, a nephew of the English author and statesman, George Earl of Walpole, demonstrated intent to enter in to a “compact” with his late uncle for the disposition of his and his uncle’s estates to the benefit of their respective families. The question that arose then, as it still does today, is upon what terms the two parties were transacting, and how should they be bound? Or, to quote a commentary from the turn, “How far in law and equity was each at liberty to repent, and to recall his share of the testamentary exchanges between them?”

204 years later, the question continued to be addressed in a seminal decision of the Ontario Superior Court of Justice. In 2001’s Edell v. Sitzer, Cullity J, was tasked with unpacking a bitter family dispute where an alleged agreement not to depart from equal division of assets was at stake. The question before the court then (in part) was, do the facts give rise to a constructive trust? Justice Cullity set out the test for mutual wills thusly:

  1. The mutual wills were made pursuant to a definitive agreement or contact not only to make such wills, but that the survivor shall not revoke.
  2. Such an agreement is found with certainty and preciseness.
  3. The survivor has taken advantage of the provisions in the mutual will.

If the test is satisfied, the court can impose a constructive trust. Rooted in the law of equity, an implied or constructive trust aims to remedy any unjust enrichment by one party of a contract (a surviving spouse, for example) over another.

But what consistently seems to trouble the conscience of the court, is the idea of “contracting-away” one’s testamentary freedom. There is no restriction for a will made in defiance of such an agreement, but in equity, the court is almost bound to treat mutual wills as a single testamentary instrument. This was the problem in the 2016 ONSC case of Rammage v. Estate of Roussel: Alf and Ruth Roussel had made mutual wills 13 years prior to Alf’s death in February of 2009, agreeing in part to divide their estate equally among their four children (both Ruth and Alf went into the marriage with 2 children each). One year after Alf’s death, Ruth made a new will, disinherited Alf’s children, and left everything to her own two kids. Upon the death of Ruth, the litigation began.

The court in Rammage determined that the wills of the deceased testators amounted to mutual wills, imposed a constructive trust, and divided the assets according to the terms of the first wills of Ruth and Alf.  If the court is satisfied that the wills are mutual, any property disposed of in a subsequent testamentary document is subject to a constructive trust in favour of the named legatees, and the subsequent will fails.

Returning to the question of remarriage, one could expect the need for administration and ultimately judicial intervention, should all the beneficiaries not consent to the changes in subsequent wills. Like many decisions that seem like “a good one at the time,” mutual wills should be considered very carefully and with the advice of independent counsel. A decision to enter into a contract that prohibits one from ever changing their last will and testament must be considered from all sides. To quote the late Horatio Walpole, the 4th Earl of Orford: “The wisest prophets make sure of the event first.

Thanks for reading!

David M. Smith & Daniel Enright (Summer Law Student)

03 Jun

Dependant’s Support: Was the Deceased Providing Support Before Death?

Rebecca Rauws Support After Death Tags: , , , , , , , , , 0 Comments

I recently came across an article discussing a court’s decision in respect of what appears to be a claim for dependant’s support in Tasmania. In the decision of Booth v Brooks [2018] TASSC 35, the deceased died with a Will that did not leave anything to his estranged daughter. The deceased was also survived by a long-term partner  and two adult sons, who were mentioned in his Will.

The daughter made a claim under a Tasmanian statute, the Testator’s Family Maintenance Act 1912 (the “TFMA”). Section 3(1) of the TFMA states as follows:

3 (1)  If a person dies, whether testate or intestate, and in terms of his will or as a result of his intestacy any person by whom or on whose behalf application for provision out of his estate may be made under this Act is left without adequate provision for his proper maintenance and support thereafter, the Court or a judge may, in its or his discretion, on application made by or on behalf of the last-mentioned person, order that such provision as the Court or judge, having regard to all the circumstances of the case, thinks proper shall be made out of the estate of the deceased person for all or any of the persons by whom or on whose behalf such an application may be made, and may make such other order in the matter, including an order as to costs, as the Court or judge thinks fit.

By comparison, section 58(1) of Ontario’s Succession Law Reform Act, (the “SLRA”) seems to have quite similar language. Section 58(1) provides:

58 (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.

Under the SLRA, in order to qualify as a “dependant”, one must be a spouse, parent, child, or brother or sister of the deceased, to whom the deceased was providing support or was under a legal obligation to provide support immediately before his death. The TFMA, on the other hand, provides in section 3A that the persons who may make an application pursuant to section 3(1) are the:

  • spouse;
  • children;
  • parents (if the deceased person dies without a spouse or children); and
  • person who had a certain relationship with the deceased, and who was entitled to receive maintenance from the deceased at the time of his or her death.

In Booth v Brooks, the court concluded that the daughter had been left without adequate provision. One of the factors that lead to this conclusion was that the deceased had not had a good relationship with the daughter throughout her life and had not provided her with any direct financial support. In particular, the court stated that the deceased’s “abnegation of parental responsibility during childhood increases the moral obligation of the testator to the child”.

It seems that the key difference in the law in Tasmania versus Ontario that came into play in the Booth v Brooks decision, which would likely have resulted in a different outcome had the scenario arisen in Ontario, is that the TFMA does not require that a spouse, child, or parent be receiving or entitled to support or “maintenance” at the time of the deceased’s death. Interestingly, the Tasmanian law seems to lean the other way—if the deceased has not provided adequate support during his or her lifetime, it may increase the ability of a child or spouse to obtain support from the deceased’s estate.

Thanks for reading,

Rebecca Rauws

 

You may also be interested in these other blog posts:

28 May

Legal Aid Funding and Access to Justice

Nick Esterbauer Elder Law, Estate & Trust, General Interest, In the News, Litigation, Support After Death Tags: , , , , , , , , 0 Comments

Sydney Osmar‘s blog from yesterday covered the issue of the recent cuts to legal aid funding, which can only be expected to result in increased barriers to Ontario residents in accessing the court system.

Within the context of estates, high legal fees may contribute to the inability of (would-be) litigants to obtain able assistance in accessing the court system.  Some meritorious estate and capacity-related litigation may not be commenced simply because of a lack of funds required to hire a lawyer to assist in doing so.

While successful parties may be awarded some portion of the legal fees that they have incurred, payable by the unsuccessful party to the litigation (or out of the assets of the estate), recovery of all legal fees incurred in pursuing litigation is rare.  The balance of legal fees that a party can be expected to pay out of whatever benefit they may ultimately receive dependent on the outcome of the litigation may eliminate some or all of the financial benefit of the funds that they may stand to receive.

For example, a dependant’s support application brought by a surviving spouse who lacks the financial means to support him or herself may result in protracted litigation.  Even if the application for dependant’s support is successful, the court may not always make an order that adequately reflects the entitlements of the dependant and the total fees that he or she has incurred to bring the application, limiting the funds available for the dependant’s expenses going forward.  While interim support orders or orders directing payments toward professional fees related to bringing the application may be available during litigation in some circumstances, the related motions will serve to further increase the legal fees incurred by the applicant if such relief is not obtained on consent.  In the absence of contribution from the assets of the estate to fund the litigation or an alternative arrangement for the payment of legal fees, it may not be possible for a surviving spouse in need to make a dependant’s support claim in the first place or he or she may need to do so without a lawyer’s assistance.

In 2016, it was reported that the numbers of self-represented litigants in Canada have increased over the last two decades and more significantly in recent years.  The inability to afford a lawyer and ineligibility for legal aid assistance were cited as the primary reasons why a party is self-represented.  Research suggests that parties who are self-represented are less likely to be successful in litigation (with success rates of only 4% in responding to motions for summary judgment, 12.5% for motions and applications, and 14% at trial) than represented parties.

While assistance with estate-related matters may be available to some from the Advocacy Centre for the Elderly, the Queen’s University Elder Law Clinic, or other clinics (which are funded by Legal Aid Ontario and will be impacted by the recent budget cuts) in some circumstances, many individuals simply do not qualify for assistance or require assistance that is not provided by these clinics.

Our colleague, The Honourable R. Roy McMurtry, is a strong advocate for access to justice and has expressed the following sentiment: “[O]ur freedoms are at best fragile…they depend on the ability of every citizen to assert in a court or tribunal their rights under law as well as receiving sound legal advice as to their obligations.  Indeed, our laws and freedoms will only be as strong as the protection that they afford to the most vulnerable members of society.”

Unfortunately, greater numbers of individuals than previously may struggle to access just resolutions of estates and other matters as a result of the recent changes to legal aid funding in Ontario.

Thank you for reading.

Nick Esterbauer

05 Apr

Nova Scotia Proposes “Presumed Consent” Legislation for Organ Donations

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Support After Death, Trustees, Uncategorized, Wills Tags: , , 0 Comments

Nova Scotia is proposing legislation that will make it the first jurisdiction in North America to adopt “presumed consent” around organ donation.

Under the Human Organ and Tissue Donation Act, all people in Nova Scotia will be presumed to agree to organ donation upon their death, unless they opt out. The Act does not apply to those under 19, or those without decision-making capacity. In those cases, a parent, guardian or alternate decision maker may consent on their behalf.

The Act will not be proclaimed immediately: it is to take effect in 12 to 18 months, so as to allow for public education and support for health care workers.

Under previous Nova Scotia legislation, the right of a family member to veto an organ donation decision made by a deceased was removed. See our blog on the topic, here.

Several European countries already have presumed consent laws for organ donation.

In Ontario, the current system is an “opt-in” system, rather than an “opt-out” system. Under the Trillium Gift of Life Act, consent must be given prior to the removal of organs after death. The person must be at least 16 years of age. In addition to the person, other persons are entitled to consent on the person’s behalf. These include,

  • a spouse, either married or common-law;
  • if there is no spouse or the spouse is not readily available, the person’s children;
  • if there are no children, or if none are readily available, either of the person’s parents;
  • if there are no parents, or none are readily available, any of the person’s siblings;
  • if there are no siblings, or none are readily available, any of the person’s next of kin;
  • if there are no next of kin, or none are readily available, the person lawfully in possession of the body, other than the administrative head of the hospital, where the person dies in a hospital. Further, the coroner, Public Guardian and Trustee, embalmer or funeral director are not authorized to consent.

Consent cannot be given if the person has reason to believe that the person who died or whose death is imminent would have objected.

Organ donation has helped so many. Please consider opting in to Ontario’s organ donation program.

Have a great weekend.

Paul Trudelle

25 Feb

Fancy Cats and Estate Planning: the Future for Karl Lagerfeld’s Cat, Choupette

Charlotte McGee Estate Planning, Pets, Support After Death Tags: , , , 0 Comments

Karl Lagerfeld – the iconic German designer best known for his work as creative director of Chanel and Fendi’s fashion houses – died this past Tuesday, February 19, at the age of 85.

In the wake of his death, news outlets have reported on a variety of different aspects of Lagerfeld’s illustrious life, from his legendary influence in the fashion industry, to his penchant for controversial commentary, to the impact his work has had on various celebrities and other  household names. The articles that caught my eye last week, however, were those with headlines stating that Lagerfeld’s beloved pet cat, Choupette, was set to inherit his approximate $200 million fortune.

“Although one may view their adored pet as a fellow family member, Canadian Law has a different perspective.”

Choupette, a seven-year-old, white Birman cat, was one of Lagerfeld’s most cherished companions during his lifetime. Lagerfeld would regularly speak of his pet in human terms, referring to her as “Mademoiselle”, a “chic lady”, and calling her his favourite travel partner (the two would often travel together by private jet). Choupette reportedly has her own sets of customized Louis Vuitton cat-carriers, several personal maids, and a bodyguard, amongst other luxuries. She and Lagerfeld also often ate together, with Choupette dining on caviar and croquettes at the table, opposite Lagerfeld.  As Lagerfeld’s right hand cat, she lived a life of extravagance of which many can only dream.

While Lagerfeld has suggested in past interviews that Choupette would be an heir to his vast Estate, the headlines about Choupette’s alleged inheritance drew my attention specifically for reasons of semantics: in Canada, at least, pets cannot technically hold or inherit assets themselves.

Although one may view their adored pet as a fellow family member, Canadian Law has a different perspective. In Canada, pets are legally treated as property – they are a “living asset” which will form a part of a deceased’s estate at death. In the words of Justice Danyliuk, writing in the Saskatchewan case of Henderson v Henderson, 2016 SKQB 282 : “…after all is said and done, a dog is a dog… a domesticated animal that is owned. At law it enjoys no familial rights”.

Given that it is impossible to give property to other property, a testator must come up with an alternative strategy to naming their pet as a beneficiary. For example, a testator could include a provision in their Will to gift their pets to a successive owner, and could leave a specific cash gift to the successive owner to cover costs associated with caring for their pets or pet. A formal “pet trust” – typically being a sum of money, held in trust, to be used only for the purpose of a pet’s care – could also be established to finance a pet’s care after an owner’s death

While many article titles may suggest that Choupette is personally set to inherit a portion of Lagerfeld’s Estate, it is more likely that Lagerfeld has used one of these alternative strategies to ensure his dear Mademoiselle can live comfortably for the rest of her life.

For more on Pet Trusts, read Kira Domratchev’s and Rebecca Rauws’ past blogs commenting on this same subject.

Thanks for reading!

Charlotte McGee

13 Dec

Testing the waters of Section 72(1)(d) of the Succession Law Reform Act

Hull & Hull LLP Joint Accounts, Support After Death Tags: , , , , 0 Comments

Many of our readers will be aware that on an application for dependant’s support under Part V of Ontario’s Succession Law Reform Act, certain property that may not be considered an asset of the deceased’s estate can be “clawed back” into the estate for the purposes of considering and funding an award of dependant’s support.  Subsection 72(1)(d) provides that “a disposition of property made by a deceased whereby property is held at the date of his or her death by the deceased and another as joint tenants” shall be deemed to be part of the estate.

Whether jointly-held property is caught by s.72(1)(d) depends on whether there was a “disposition” into that joint tenancy.  When a property is initially purchased by a deceased person and another in joint tenancy and remains as such at the time of death, it can not be said that there was a disposition into joint tenancy: s. 72(1)(d) would not appear to apply.

However, when the ownership arrangement of a property is more intricate, whether or not jointly-held property will be deemed to be an asset of the estate within the context of a dependant’s support application becomes less clear.

Consider the following scenario:

  • At first instance, title to a property is taken as follows:
    • 50% held solely by A; and
    • 50% held jointly by A and B, who are common law spouses.
  • Years later, A conveys the 50% held by her alone to herself and her common law spouse jointly.
  • Therefore, immediately preceding A’s death, 100% of the property is held in joint tenancy by A and B.

Now, after A’s death, A’s minor children assert a dependant’s support claim. Does section 72(1)(d) apply, such that the property can be made available to fund a payment of dependant’s support?

The decision in Modopoulos v Breen Estate, [1996] O.J. No. 2738 interpreted section 72(1)(d) of the Succession Law Reform Act to mean that, only if the property was owned solely by the deceased and later transferred into joint tenancy prior to death, would there be a “disposition” into joint tenancy.

In the unique set of circumstances described above, it could be argued that A never solely owned the property and, therefore, the later disposition is not captured by section 72(1)(d).  However, another perspective is that the 50% interest held initially by A as a tenant in common (with A and B jointly as to the other 50%) would have formed part of her estate if the subsequent disposition to B as a joint tenant did not take place. This interpretation strongly supports that section 72(1)(d) of the Succession Law Reform Act would in fact apply to make the 50% interest in the property available in satisfaction of a dependant’s support claim.  Certainly such an argument is consistent with the remedial intent of the legislation.

To our knowledge, there has yet to be a decision in Ontario that addresses whether section 72 would apply to a disposition out of a tenancy in common and into a joint tenancy, such as that featured in our hypothetical example.  It will be interesting to see how a court would interpret similar transactions if encountered in the future.

Thank you for reading.

David Morgan Smith and Nick Esterbauer

 

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