Category: Support After Death

11 Dec

Preserving the Right to an Equalization of Net Family Properties

Nick Esterbauer Estate & Trust, Support After Death, Wills Tags: , , , , , , , , , , , , , 0 Comments

A recent decision of the Ontario Superior Court of Justice highlights the importance of preserving a surviving married spouse’s ability to elect for an equalization of net family properties within the six-month limitation period.

Upon death, a surviving married spouse in Ontario can elect for an equalization of net family properties under Sections 5 and 6 of the Family Law Act instead of taking under the predeceasing spouse’s will or, if the spouse has not left a will, on intestacy.  Subsections 6(10), 6(11), and 7(3)(c) of the Family Law Act provide that the surviving spouse must ordinarily make an election within six months of date of death and not after that date.  The Court may, however, extend the election deadline in the event that: (a) there are apparent grounds for relief; (b) relief is unavailable because of delay that has been incurred in good faith; and, (c) no person will suffer substantial prejudice by reason of the delay (subsection 2(8) of the Family Law Act).

Courts have reviewed the circumstances in which an extension is typically ordered.  The requirement that the delay be incurred in good faith has been interpreted as meaning that the party has acted honestly and with no ulterior motive (see, for example, Busch v Amos, 1994 CanLII 7454 (ONSC)).

In Mihalcin v Templeman, 2018 ONSC 5385, a surviving spouse had commenced two claims with respect to the estate of her late husband and an inter vivos gift made to a live-in caregiver.  However, neither of the proceedings had sought any relief relating to an equalization of net family properties, nor did the wife take any steps to make an election or to extend the time within which she was permitted to do so.  The Court reviewed whether the delay in making the election was in good faith.  The evidence regarding the reasons for the delay in electing for equalization were considered to be vague and insufficient to satisfy the evidentiary burden that the delay was incurred in good faith.  Accordingly, the applicant was not permitted to amend her pleadings to incorporate this relief.

Justice Bruce Fitzpatrick commented as follows with respect to the importance of limitation periods, generally (at para 48):

I am mindful of the general importance of limitation periods for the conduct of litigation. There is an obligation on parties to put forward all known legitimate claims within certain time limits. In this case, the time limit was relatively short. I think it cannot be readily ignored. The evidentiary record is not sufficient for me to say that justice requires me to exercise my discretion in favour of allowing [the applicant] to amend her claim so as to include a claim for equalization in all of the circumstances.

Where an equalization of net family properties may be sought at a later time (for example, pending the outcome of a will challenge or dependant’s support application), it is prudent to seek an extension well before the expiry of the six-month limitation period as courts may or may not assist a surviving spouse in seeking this relief down the road, if and when it may become advisable.

Thank you for reading,

Nick Esterbauer

 

Other blog entries/podcasts that may be of interest:

 

29 Oct

Can there be a “break” in a common law relationship?

Stuart Clark Support After Death Tags: , , , , , , , , , , , , , , , , 0 Comments

As anyone who has ever watched the show Friends can attest, “breaks” can happen in any relationship. For those attempting to claim common law spousal status however, what impact, if any, do such “breaks” have upon the length of time that the couple has to be together? Do you have to re-set the clock of the relationship after every “break”, or can the “breaks” be ignored?

Part V of the Succession Law Reform Act incorporates the definition of “spouse” from section 29 of the Family Law Act. Section 29 of the Family Law Act in turn defines “spouse” as including “two persons who are not married to each other and have cohabited continuously for a period of not less than three years“. This definition is often what is being referred to when someone says that a relationship is “common law”, with significant corresponding legal rights potentially being given to the two individuals if they are found to be “spouses”.

As the word “continuously” is included in the definition, one would be forgiven for thinking that there cannot be any “breaks” in the relationship, and that you must have a continuous three year period of “cohabitation” for two people to be considered spouses. As we will see below however, this may not necessarily be the case.

I have previously blogged about the factors that the court may look to in determining whether two people are “cohabitating”, with the Supreme Court of Canada in M. v. H. having confirmed that you look to the factors listed in Molodowich v. Penttinen to determine whether to individuals are “cohabitating” to the extent that their relationship becomes spousal. For the purpose of this blog however, the interesting question which follows is whether a couple who otherwise meets enough of the factors from Molodowich to be considered to be “cohabitating”, but had a “break” in their relationship during the three year period, could still be considered “spouses”.

In Boothe v. Gore, [1996] O.J. No. 4376, the Ontario Court of Justice (General Division) provides the following commentary regarding the effect of a “break” on a relationship:

The law in Ontario recognizes that a man and a woman are considered to have continuously cohabitated, despite that while living together, there might have been separations for varying periods of time before reconciling. Cohabitation does not terminate until either party regards it as being at an end, and, demonstrate convincingly that this is the party’s intent. A brief cooling off period does not convincingly show a settled state of mind that cohabitation has terminated…

The effects of temporary separations depends on the intention of the parties. When one party leaves the other and provides an objective basis to believe that they do not intend to resume cohabitation and the separation lasts for a meaningful period of time, the period of cohabitation could well have been interrupted.” [emphasis added]

As Boothe v. Gore suggests, a “break” in a relationship should not necessarily preclude a finding that two persons are common law spouses. Rather, the court is to attempt to ascertain the intentions of the parties at the time of the “break”, with the spousal status only coming to a close if either of the parties regards the relationship as being “at an end“, or the period of separation lasts for a “meaningful period of time“.

Thank you for reading.

Stuart Clark

01 Oct

Are you still a “spouse” if you are “Living Apart Together”?

Doreen So Common Law Spouses, Elder Law, General Interest, Support After Death, Wills Tags: , , , , 0 Comments

The Globe and Mail recently published an article on couples that live apart from each other.  This particular article focuses on the story of a couple who has never shared a home in the course of their twenty-year relationship.  This couple is not alone; approximately 1.9 million unmarried adults in Canada were in an intimate relationship with someone who occupies a separate residence in 2011.

This form of intimate relationships are considered to be a historically new family form.  Sociologists have coined this phenomenon as “LAT couples“, i.e. couples that are living apart together.

 

While the article focuses on couples who are deliberately choosing to live apart, there are also external factors that may prevent a couple from living together (such as immigration or capacity issues where one spouse has greater care needs than the other spouse).

LAT couples raise an interesting question with respect to whether such couples would be considered as a “spouse” within the meaning of Part V of the Succession Law Reform Act for the purposes of dependant’s support.  Pursuant to section 57 of the SLRA, the word “spouse” has the same meaning as section 29 of the Family Law Act.

Section 29 of the Family Law Act in turn defines the term spouse as,

  • people who are married to each other;
  • unmarried people who have cohabited continuously for a period of not less than three years; or
  • unmarried people who are in a relationship of permanence if they have children.

Interestingly, the Ontario Court of Appeal has made the following comment in Stephen v. Stawecki, 2006 CanLii 20225:

“the specific arrangements made for shelter are properly treated as only one of several factors in assessing whether or not the parties are cohabiting”.

Thanks for reading.

Doreen So

24 Jul

SLRA Dependant Awarded Entirety of Estate

Doreen So Common Law Spouses, Continuing Legal Education, Estate Planning, Executors and Trustees, Litigation, Support After Death Tags: , , , , 0 Comments

In Michael v. Thomas, 2018 ONSC 3125, Justice Ramsay awarded a dependant support claimant the entirety of the Estate net of all debts and liabilities.  The dependant support claimant in this case was a common law spouse of approximately 20 years.  Ms. Michael was in her late-fifties/early sixties when Mr. Chambers died suddenly from cancer without a will. 

Mr. Chambers and Ms. Michael were not married at the time of Mr. Chambers’ death.  Accordingly, Ms. Michael was not a beneficiary of Mr. Chambers’ Estate pursuant to the rules of intestacy.  Mr. Chambers did not have any children either so the beneficiaries of his Estate were his surviving siblings and two nephews who were the sons of his predeceased sister.

Justice Ramsay found that Mr. Chambers and Ms. Michael lived modestly during Mr. Chambers’ life.  They were joint owners of their home, which Ms. Michael received by right of survivorship.  The home was subject to a mortgage of about half its market value in the amount of $150,000.00.  Ms. Michael was also the beneficiary of a modest $80,000.00 life insurance policy and her income became supplemented by an additional $3,325 per month through the deceased’s CPP and pension benefits.  Ms. Michael worked part-time and has two adult children of her own.  Interestingly, Justice Ramsay commented that Ms. Michael should not have to seek support from her adult children under the Family Law Act (even though she could, theoretically) before seeking support from Mr. Chambers’ Estate.

In considering the Respondent’s case, Justice Ramsay found that Mr. Chambers did not have any other dependants and that he was estranged from the only party who responded to Ms. Michael’s claims in Court.  Mr. Chambers’ sister argued that Ms. Michael already received $203,965 out of the assets of the Estate, which, including section 72 assets, were worth a total $285,000.   She further argued that Ms. Michael would be able to maintain the same standard of living that she used to enjoy if Ms. Michael supplements the pension income by working full-time at minimum wage.  In his analysis, Justice Ramsay squarely stated as follows:

[19]           I do not agree. It is not reasonable to expect the Applicant to take an entry level job at the age of 62 when she is already past the point of being able to sustain full time physical labour, even light physical labour. Even if it were possible, it would only raise her earnings to the low $40,000 range, which would still not be enough to continue the modest standard to which she was accustomed. I do not think that the intestate made adequate provision for the proper support of the Applicant.

[20]           The estate is not big enough to make periodic payments. In fact it is not big enough to provide the proper support the Applicant needs. I think that a judicious spouse would have left her the entire estate, such as it is. The Applicant is the only dependant and the only person with any moral claim on the estate. Accordingly I order the trustee to convey to the Applicant the entire residue of the estate after payment of taxes, debts of the estate and his own fees and I declare that the amounts already received or already in the Applicant’s possession are hers to keep.

Ms. Michael was also awarded partial indemnity costs from Mr. Chambers’ sister.  Mr. Chambers’ sister was found to have no need for “more found money” from Mr. Chambers’ Estate because of the inheritance that she received from their mother, and that costs from the Estate would have the same effect as awarding costs against Ms. Michael.

Thanks for reading!

Doreen So

25 Apr

How are you storing the photos of your life?

Ian Hull Estate & Trust, Estate Planning, Support After Death, Trustees, Uncategorized, Wills Tags: , , , 0 Comments

With the improvement in phone cameras, photographs are a bigger part of our lives than ever, at least in terms of volume. And while digital photos don’t take up any actual space, they can clutter the lives of our loved ones when we leave a mess of hard drives and memory sticks behind, with thousands of photos to sort through.

When we think about arranging our affairs, the author of this blog makes a very compelling argument for including photographs as part of the arrangement process, and organizing family photos so they provide comfort, not nuisance. The article also contains some great advice on how to leave a photo legacy.

Here’s a thought: with photographs now so ubiquitous, it may be possible to actually “do with pictures” what we used to “do with words” in terms of providing a memoir for those we leave behind. The process of reviewing digital photos, scanning older prints, culling and organizing, and then producing a visual timeline of your life, can not only produce a wonderful gift for your family, it can be an important opportunity for reflection for you as well.

While arranging your photo collection may not be top of your priority list during your work life, it might be something you move up the priority ladder when you retire and have the time to devote to the task.

In the meantime, if a parent or older family relative dies and you’re the one sorting through the photos left behind, this article  has some valuable tips on how to make the process both practical and meaningful.

Thank you for reading,
Ian Hull

10 Apr

The Policy of Setting Policy: Cotnam v Rousseau and Judicial Activism

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Planning, Litigation, Pension Benefits, Public Policy, RRSPs/Insurance Policies, Support After Death Tags: , , , , 0 Comments

The practice of injecting policy considerations into court decisions has long been a tenet of the Ontario judiciary.  However, such considerations may arguably raise questions that go beyond the scope of the decision.  Cotnam v Rousseau, 2018 ONSC 216, is one such case.

In Cotnam, the Court was tasked with determining whether a pre-retirement death benefit received by a surviving spouse was available to be clawed back into an Estate pursuant to section 72 of the Succession Law Reform Act (the “SLRA”).  The Respondent took the position that section 48 of the Pension Benefits Act (the “PBA”) sheltered the death benefit from being clawed back given that she was the spouse of the Deceased.  The Court disagreed and held that such benefits ought to be available for claw back in order to prevent irrational outcomes resulting from their exclusion.

In the context of the facts at play in Cotnam, the Court reasoned in favour of equity, in particular, to ensure a dependant disabled child of the Deceased was properly provided for. However, the Court’s reasons appear to gloss over a fundamental conflict between the SLRA and the PBA, a clash about which the estates bar might have appreciated some judicial commentary.  Specifically, the Court held that the provisions of the SLRA ascribing pension death benefits as available to satisfy a claim of dependant’s relief ought to prevail over the PBA’s provisions sheltering them from claw back.

Section 114 of the PBA provides that, “[i]n the event of a conflict between this Act and any other Act […] [the PBA] prevails unless the other Act states that it is to prevail over [the PBA].”  The SLRA, in contrast, is silent as to whether its provisions are to prevail over those of the PBA.

However, the Court’s reasons make no mention of the interplay between section 114 of the PBA and the equities of ensuring the dependant daughter in Cotnam was properly provided for.  While we may opine on the fact that the outcome in Cotnam favours equity over rote statutory interpretation, the estates bar is left to grapple with the apparent inconsistency with the intention of the Ontario legislature, and whether it will affect similar decisions going forward.  As of this date, no written decisions have yet interpreted Cotnam, nor has the decision been appealed.  Accordingly, it may be some time before the impact of the decision, if any, is felt.

Thanks for reading.

Garrett Horrocks

If you enjoyed this blog, please consider these other related posts:

Dependant Support and Pre-Retirement Death Benefits

Rehel v Methot: Life Income Funds and Spousal Entitlements

09 Apr

The Support Claim as a Remedy for the Disappointed Spouse

Kira Domratchev Support After Death, Wills Tags: , , , , , , , 0 Comments

Occasionally, a person finds themselves in a situation in which, following their spouse’s death, they were either not adequately provided for under their spouse’s Will or were not provided for at all.

Especially in situations where the deceased fully supported his or her spouse, one viable option is for the surviving spouse to assert a claim for support under Part V of the Succession Law Reform Act, RSO 1990, c. S. 26 (the “SLRA”).

A surviving spouse, either married or common-law as defined in the SLRA fits into the definition of a “dependant” and is thus entitled to support from the deceased spouse’s estate.  The question for the Court is whether the deceased made adequate provision for his/her surviving spouse and, if not, what ought to be the quantum of support.

Under the SLRA, a “dependant” includes not just married spouses, but also either of two persons who,

  • were married to each other by a marriage that was terminated or declared a nullity; or
  • are not married to each other and have cohabited,
    • continuously for a period of not less than three years, or
    • in a relationship of some permanence, if they are the natural or adoptive parents of a child.

It is important to keep in mind that such a claim under the SLRA must be brought within six months of obtaining probate, unless the Court allows for an extension of time. Probate is another term for a Certificate of Appointment of Estate Trustee with a Will that is usually obtained by the Estate Trustee for proper administration of the Estate.

The Court may consider various factors in assessing the nature, amount and duration of support, including the eighteen factors listed under section 62(1) of the SLRA some of which are:

  • The Dependant’s current assets and means;
  • The Dependant’s capacity to contribute to their own support;
  • The Dependant’s age and physical and mental health;
  • The Dependant’s needs – with regard to accustomed standard of living;
  • Any agreement between the Dependant and the deceased spouse; and
  • The proximity and the duration of the Dependant’s relationship with the deceased spouse.

If a claim for dependant’s relief is successful, the Court has broad discretion and can make a variety of orders for support, including but not limited to:

  • A monthly or annual payment, for an indefinite or limited period of time or until the occurrence of a specific event;
  • A lump sum payment;
  • The transfer of specified property, either absolutely, for life, or a specified number of years; or
  • The possession or use of any specified property for life or for such period as the Court considers appropriate.

In any event, if a person believes that they may have a good case for a Dependant’s Support Claim under the SLRA, it is important to consult with a lawyer as soon as possible so as to file the claim within the allotted limitation period and discuss any other options.

Thanks for reading.

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

Dependant’s Support – Do common law spouses have to live in the same residence?

Dependant Support and Pre-Retirement Death Benefits

Can Divorced Spouses No Longer Be Dependants?

 

23 Feb

Man Ordered to Pay Ongoing Spousal Support to Dead Spouse’s Estate

Hull & Hull LLP Estate & Trust, Estate Planning, Support After Death, Uncategorized, Wills 0 Comments

In Marasse Estate (Re), 2017 ABQB 706 (CanLII), the Court of Queen’s Bench of Alberta recently ordered a man to make ongoing support payments to his dead spouse’s estate.

In that case, Tracy and Jean were married in October, 1998.  They separated in April, 2012.  A divorce was granted in March, 2015.

Tracy and Jean entered into a Separation and Property Agreement (“the Agreement”) in October, 2014.  Both Tracy and Jean were represented by counsel.

The Agreement dealt with all issues of spousal support and the division of property.  It provided that Jean was to pay support to Tracy in the amount of $3,000 per month, for 60 months.  Jean’s obligations were secured by a policy of insurance in the event that Jean died before full payment was made.  The Agreement provided that it was non-reviewable by the Court, and that it was binding on and would inure to the benefit of the estate of the parties.  It was otherwise silent with respect to what would happen in the event that Tracy was to die before all payments were made.

Tracy, who was ill at the time of the negotiation of the Agreement, died in June, 2015.  At the time of her death, only 8 of the 60 support payments had been made.

Tracy’s Estate Trustee brought a claim for the payment of the balance of the support payments.  Jean opposed, arguing that:

(a)        as Tracy died, there was no longer economic need on Tracy’s part; and

(b)       Tracy’s right to support was personal to her.

The Court disagreed, finding that it was not clear that the support was “non-compensatory”.  Nothing in the Agreement specifically addressed the conceptual basis for the support payments.

The Court held that the entitlement to support payments was contractual in accordance with the Agreement.  While a claim for spousal support under statute may die with the Claimant, contractual rights do not necessary suffer the same fate.

The Court did not order a lump sum payment of the total of the outstanding payments, but rather, declared that Jean’s obligation to make ongoing payments to Tracy’s estate continued.

Have a great weekend.

Paul Trudelle

 

12 Feb

Does spousal support end on death?

James Jacuta Litigation, Support After Death Tags: , , 0 Comments

Family law has long been clear on the question of spousal support in that it is provided to satisfy the needs of the spouse during his/her lifetime and the entitlement to support does not survive the death of the recipient.

Whether this remains the status quo may have been put into question with the recent Alberta’s Court of Queen’s Bench decision in Marasse Estate. In this case, the couple’s separation agreement required the husband to pay monthly support to the wife for five years. The wife passed away after the husband had made only a few payments, and her estate trustee sought the remaining payments. The husband resisted the claim, asserting that the premise underlying the support was the wife’s need. As she no longer had need, he should not be required to make further payments.

The Court concluded that the estate was entitled to continue to receive the support payments. It reasoned that the contractual agreement of the parties created a juristic reason to continue support for the following reasons:

1.The separation agreement contained the fairly standard enurement clause, which provides that the agreement enures to the parties’ heirs, executors etc.

2. The separation agreement contained a non-reviewability clause that states: “entitlement, quantum, and duration of spousal support is non-reviewable and may not be varied on any material change of circumstances.”

3. The separation agreement was comprehensive, negotiated with give and take on both sides, and it should be considered as a whole.

4. Actual need is not expressed in the agreement to be a precondition to payment. For instance, if the converse to the husband’s argument were true, being that the wife remained in financial need and lived longer than five years, the wife would not have been able to collect any further amounts.

Notably, the parties had also turned their minds in the agreement to what would happen if the husband died before all payments were made, as he agreed to maintain life insurance to secure support in the event of his death.

The Court found that the agreement was unambiguous, and could not be set aside as the parties to it (1) intended it to be a full and final resolution, and (2) there were no new circumstances not reasonably anticipated that led to a situation that could not be condoned.

A recent article found here discusses the Court’s decision.

Thanks for reading and have a good day,

Natalia Angelini

26 Jan

What Hat Are You Wearing, and Why It Matters

Hull & Hull LLP Beneficiary Designations, Capacity, Estate & Trust, Estate Planning, Hull on Estates, Power of Attorney, Support After Death, Trustees, Wills 0 Comments

We act in different capacities: sometimes in a personal capacity, and sometimes in a representative capacity, such as in the capacity as Estate Trustee. What capacity we are acting in can sometimes have a significant impact on our legal rights.

Take, for example, the Court of Appeal decision in Bennett v. Bennett Estate, 2018 ONCA 45 (CanLII). There, four brothers, Dennis, George, Donald and John, owned several parcels of land. They entered into an agreement that provided a right of first refusal in the event that any of them sought to sell any of the lands to a third party. Donald died, and was survived by his wife, Darlene. John died, and his property was transferred to his wife Joyce and two sons.

In 2012, Joyce and her sons proposed to sell their property to a third party. The agreement of purchase and sale acknowledged the right of first refusal, and the sale was conditional upon George, Dennis and the estate of Donald not exercising their right of first refusal. Darlene purported to exercise her purported right to purchase the property.

The third party purchaser took the position that Darlene could not exercise the right of first refusal because she was not a party to the first right agreement. It was acknowledged that Donald’s estate was entitled to exercise the right of first refusal. However, Darlene claimed to exercise the right of first refusal not as estate trustee of Donald’s estate, but as a family member. The motions judge rejected this submission based on the judge’s review of the first right agreement, and the Court of Appeal upheld the motions judge’s ruling.

On appeal, Darlene submitted that she in fact exercised the right of first refusal on behalf of Donald’s estate. However, there was no evidence of any right of Darlene to act on behalf of the estate. In fact, the third party specifically asked Darlene to produce proof of her authority to act on behalf of Donald’s estate, but Darlene refused to produce such evidence. “The appellant [Darlene] had many opportunities to establish the facts upon which she seeks to rely but chose not to do so. As a result, there was no evidence before the motions judge – and no evidence before this court on appeal – concerning the appellant’s ability to exercise the right of first refusal on behalf of the [Donald’s] estate.”

In assessing legal rights and positions, it is important to not only assess what those legal rights are, but to consider in what capacity we hold them.

Thank you for reading. Have a great weekend.
Paul Trudelle

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