Tag: common law spouse
We sometimes hear about an elderly person marrying a much younger person. What we often do not consider, however, is the possibility that such a marriage is entered into by a “predatory” spouse in order to take advantage of an elderly victim with the ultimate goal of assuming control of his or her finances.
The “predator” is often a caregiver or a family friend or neighbour. In most cases, it is a person who uses a position of trust to cause an elderly victim to change a Will, a power of attorney, an insurance policy designation or other documents. It is also not uncommon for inter vivos transfers to be made while the senior is alive.
According to Ontario law, the act of marriage grants the new spouse certain property rights, specifically with respect to the matrimonial home and spousal support. The most significant effect of a marriage, however, is the fact that the Succession Law Reform Act, revokes any Will executed prior to the marriage. To make matters worse, predatory marriages often occur in private such that the senior’s family members are not aware that he or she has married.
The evidentiary burden imposed upon the elderly victim’s adult family members to prove that a marriage should be declared void as it is a marriage of a “predatory” nature is significant.
Why is it so tough to show that a marriage is void?
Capacity is a fluid concept. It means that a person could have capacity for one task and no capacity for another, as capacity is time and situation specific. Capacity to enter into a marriage, is the lowest threshold of capacity. As such, a person can be entirely capable to enter into a marriage but may be incapable of managing his or her own financial affairs.
In addition, a person likely does not just lose capacity in a day; it is a gradual process such that there is a “grey zone” between having capacity and having no capacity at all. It is in that “grey zone” that a predator will take advantage because a person may start forgetting things but is otherwise capable for all intents and purposes.
Because of that, many are of the opinion that Ontario laws make seniors an easy target for “predatory marriages”. Will there be a change in the law coming our way, in light of the growing phenomenon of such marriages? Only time will tell.
For more information regarding this growing concern and the manner in which this issue has been treated by the courts, please see a paper by Kimberly Whaley of WEL Partners on Predatory Marriages.
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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:
 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.
 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.
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Paul Trudelle recently blogged about the Stajduhar v. Wolfe decision of the Ontario Superior Court of Justice, wherein the court was faced with the question of whether two individuals who did not live together in the same residence could meet the definition of “spouse” for the purposes of seeking support after death pursuant to Part V of the Succession Law Reform Act (the “SLRA“). In ultimately concluding in such a decision that the two individuals did not meet the definition of “spouse”, such that the surviving individual could not seek support after death, much emphasis was placed on the fact that the two individuals did not “live” in the same residence. In coming to such a decision, the court stated:
“In conclusion, I find that Branislava has failed to prove that she was a dependent spouse as defined by s. 57 of the SLRA at the time of Jeffrey’s death. The evidence satisfies me that the couple never lived together and thus did not cohabit for any period of time.” [emphasis added]
But is such a finding in keeping with the previous case law on the subject? Do two individuals need to live in the same residence to be considered “spouses” within Part V of the SLRA?
The definition of “spouse” within Part V of the SLRA includes two people who have “cohabited” continuously for a period of not less than three years. “Cohabit” is in turn defined as “to live together in a conjugal relationship, whether within or outside marriage“. When read together, to meet the “common law” definition of spouse in Part V of the SLRA two people must live together in a conjugal relationship continuously for a period of not less than three years.
As the words “live together” are contained in the definition of spouse, when read in its literal sense it would appear self-evident that two individuals must “live together” in the same residence to be considered common law spouses. Importantly however, this is not how the court has historically interpreted the subject.
Prior to Stajduhar v. Wolfe, the leading authority on what was meant by two individuals “living together in a conjugal relationship” was the Supreme Court of Canada’s decision of M. v. H. In M. v. H., the Supreme Court of Canada confirmed that in determining whether two individuals lived together in a conjugal relationship you are to look to the factors established by paragraph 16 of Molodowich v. Penttinen, which include:
- Did the parties live under the same roof?
- What were the sleeping arrangements?
- Did they maintain an attitude of fidelity to each other?
- Did they participate together or separately in neighbourhood and community activities?
- What was the attitude and conduct of the community towards each of them and as a couple?
The Supreme Court of Canada was clear in M. v. H. that the factors established by Molodowich can be present in varying degrees, and that not all categories must be met for two individuals to be considered spouses. When the Ontario Court of Appeal in Stephen v. Stawecki applied the factors employed by M. v. H. specifically to the question of whether two individuals must live in the same residence to be considered spouses, the court concluded that they did not, and that living arrangements are only one of many factors to consider. In coming to such a conclusion, the Court of Appeal states:
“We agree with the respondent that the jurisprudence interprets “live together in a conjugal relationship” as a unitary concept, and that the specific arrangements made for shelter are properly treated as only one of several factors in assessing whether or not the parties are cohabiting. The fact that one party continues to maintain a separate residence does not preclude a finding that the parties are living together in a conjugal relationship.” [emphasis added]
The recent Stajduhar v. Wolfe decision notably does not contain any reference to Stephen v. Stawecki, nor to the Supreme Court of Canada’s previous consideration of the issue in M. v. H., such that it is not clear whether such cases were considered by the court before determining that the two individuals were not “spouses”. As a result, it is not clear whether M. v. H. and Stephen v. Stawecki will continue to be the leading authorities on the issue, such that Stajduhar v. Wolfe is an outlier decision, or whether Stajduhar v. Wolfe represents a new line of thinking for the court on whether two individuals must live in the same residence to be considered spouses.
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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
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Other Articles You Might Be Interested In
Today on Hull on Estates, David M. Smith and Stuart Clark discuss the definition of “spouse” within the meaning of Part V of the Succession Law Reform Act, and the factors that the court will look to in determining whether two parties are common law spouses within the meaning of the Act, with particular attention paid to whether two parties must live under the same roof to be considered common law spouses.
Should you have any questions, please email us at email@example.com, or leave a comment on our blog below.
Today on Hull on Estates, David Smith and Moira Visoiu discuss the differing ways in which the law treats married spouses and common law spouses.
If you have any questions, please e-mail us at firstname.lastname@example.org or leave a comment on our blog page.
Click here for more information on Moira Visoiu.
This week on Hull on Estates, Paul Trudelle and Holly LeValliant discuss what is required to prove a common law relationship. The courts take a liberal approach to determining whether a relationship is common law.
The general factors used to assess the relationship are shelter, sexual and personal behavior, services, social, societal, support and children. Paul and Holly reference two cases in the podcast: Molodowich v. Penttinen and Perkovic v. McClyment.
Click here for more information Holly LeValliant.
Equitable remedies are pushing the boundaries of just what kind of claims may be made against an estate. The most apparent beneficiary of this willingness of the Courts to expand the scope of such relief would appear to be common law spouses (see the recent decision of the Supreme Court of Canada in Kerr v. Baranow and our recent blog on the case).
In the October 2011 issue of Canadian Lawyer there is a good article on this whole issue entitled "Common Law Couples – til death do they part." The author gives, in part, a summary of some of the legislation in other provinces as it has evolved to provide for common law spouses:
- In Alberta, there is the Adult Interdependent Relationships Act and other legislation that "provide surviving spouses and common law partners the same rights to claim support from the estate and share in the deceased estate on intestacy [with the exception of the Dower Act]."
- In Manitoba, "major legislative amendments were proclaimed in 2004 such to create The Common-Law Partners’ Property and Related Amendments Act…Now in Manitoba, a common law partner is able to claim a share of a person’s estate if they’ve died without a will."
- In Saskatchewan, "the Wills Act, 1996, The Administration of Estates Act, The Intestate Succession Act, 1996, The Dependants’ Relief Act, 1996, and The Family Property Act all treat married and common law couples who have cohabited for not less than two years the same,” says Maria Markatos, Crown counsel with the Ministry of Justice’s Public Law Division in Regina.
David M. Smith – Click here for more information on David Smith.
In our modern society more and more people choose to remain in common law relationships rather than to marry. Certainly many think that few differences distinguish a common law relationship from a married one as society has responded to practical reality by making common law spouses eligible for pension benefits, family insurance benefits and spousal support. No wonder some people think it is all the same whether they are married or not. However, what many fail to realize is that it makes a very big difference with respect to property rights – both in life and after death.
A common law spouse of a deceased who has died intestate (without a Will) has no entitlement as a beneficiary of the deceased partner’s estate. It is not uncommon that a dedicated common law spouse of 20 or 30 years is faced with the prospect of the estate of their loved one, which they helped to build over the years, going to the blood relatives, who are the legal heirs according to legislation; and often being people who never had any social relationship with the deceased whatsoever.
If a person dies intestate, Part II of the Succession Law Reform Act governs who is entitled to their estate. In the Act, a spouse is defined as a married spouse only. Here is the order in which family of a deceased is entitled to take:
1. If there is spouse and no children the spouse takes all.
2. If there is a spouse and children, the spouse gets the first $200,000.00.
3. If there is one child, the residue goes to the spouse and the child equally.
4. If more than one child, the spouse gets one-third of the residue and the children share the other two-thirds equally.
5. If there is no spouse, the estate goes to the children equally.
6. If no children, the estate goes to the deceased’s parents equally.
7. If no parents, the estate goes to the deceased’s siblings; if a sibling pre-deceased, that sibling’s share goes to the deceased sibling’s children.
8. If no siblings, the estate goes to the nephews and nieces.
9. If no nephews and nieces it goes to the next of kin of equal degree of consanguinity – that’s where it gets complicated and complete strangers end up inheriting.
10. If no next of kin, the estate escheats to the crown.
Lesson? Make sure you have a Will!
Sharon Davis – Click here for more information on Sharon Davis.