Tag: Divorced spouse
It is commonly understood that an Attorney for Property can do anything that the grantor of the Power of Attorney could do other than make a Will. Indeed, s. 7(2) of the Substitute Decisions Act provides: “The continuing power of attorney may authorize the person named as attorney to do on the grantor’s behalf anything in respect of the property that the grantor could do if capable, except make a will.”
In practice, “will” has been expanded to mean testamentary dispositions. Accordingly, as an example, beneficiary designations under RRSPs and life insurance policies cannot be changed by an attorney on behalf of the incapable grantor.
The unpredictable onset of incapacity can make for some unintended consequences. And the choice of attorney can create situations of inevitable conflict of interest that challenge the limitations of the statute.
An example would be a situation in which a separated but not divorced spouse is appointed under a Power of Attorney for Property. What if an application for divorce was jointly initiated by the grantor and his spouse and the grantor then becomes incapable before the divorce is finalized and before the Power of Attorney is revoked?
In such a situation, the Attorney for Property/separated spouse is in a curious predicament: on the one hand, the grantor would presumably (but not as a certainty) have wanted to complete the steps required to conclude the divorce. On the other hand, the separated spouse clearly has a competing interest: he or she would presumably financially benefit from the divorce not being finalized. To complicate matters further, if the grantor/incapable spouse chose to maintain his separated spouse as his attorney for property, he or she may been seen as wanting to trust that person to act in his or her best interests despite the conflict.
The reality is that there can be no certainty that the grantor would have as a matter of indisputable fact performed the additional steps required to conclude a divorce. While the surviving spouse in this scenario would have a conflict of interest which raises a question of whether there would be a motive to avoid concluding the divorce, it would seen that, in addition to not being able to make a Will, an Attorney for Property, could not necessarily conclude a divorce on behalf of an incapable Grantor.
There are surprisingly few cases on point. One such case is O.(M.K.) (Litigation Guardian of) v. C.(M.E.) in which the British Columbia Supreme Court decided against allowing a Divorce to proceed at the behest of a Committee for an incapable husband where the Court found, on a balance of probabilities, that no intention to divorce had been demonstrated before the incapacity.
Of course, it is a nice question as to whether intent to separate is the same as intent to divorce….
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Marriage is commonly understood to have the effect of revoking a will. The public policy rationale is simple: legal obligations are imposed on spouses to provide support to one another. A will predating the marriage that does not reflect this obligation would force the surviving spouse to have recourse to statutory remedies. Better to simply start from scratch from the commencement of the marriage and make a will that (presumably and hopefully) adequately provides for the surviving spouse.
The Common Exception to Revocation by Marriage
Marriage does not, however, always have the effect of revoking a will. There is an exception which gives a nod to the possibility that the testator who is about to marry may have the foresight to make an appropriate will “in contemplation of marriage.” Accordingly, pursuant to s. 16(a) of the Succession Law Reform Act, if there is a declaration contained in the will to such effect, it will not be revoked and will remain in force on the death of the testator.
The Lesser-Known Exception to Revocation by Marriage
Just as the testator has the power to avoid revocation by marriage by advance planning, the surviving spouse is empowered by the statute as well. Although not so well known, Section 16(b) of the Succession Law Reform Act allows the surviving spouse to elect “to take under the will, by an instrument in writing signed by the spouse and filed within one year after the testator’s death in the office of the Estate Registrar for Ontario.”
Presumably, it is a somewhat rare circumstance for a surviving spouse to elect under s. 6(b). In most circumstances, a Will benefiting the surviving married spouse that is made in advance of the marriage would contain the “in contemplation of marriage” declaration, thereby negating the need to elect. However, by addressing the circumstance of a Will that does not include the declaration yet still benefits the surviving spouse to his or her satisfaction, unnecessary litigation and recourse to statutory remedies is avoided.
For the uninformed, s. 6(b) of the SLRA can result in unintended consequences. Consider a situation in which a testator, incorrectly assuming that his Will which solely benefits the woman who became his wife was automatically revoked by marriage, separates but does not divorce. He assumes he will die intestate, leaving his estate to his children from a prior marriage. However, on his death, his separated but not divorced wife is empowered under the SLRA to choose to benefit under a Will which the testator did not realize was open to be relieved from revocation by the surviving wife’s right of election.
As is usually the case, unintended consequences can be avoided by knowledge and information. In the context of a matrimonial dispute, all possible ramifications of an unexpected death should be considered.
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This week on Hull on Estates, Paul Trudelle and Umair Abdul Qadir discuss recent amendments to the definition of “spouse” under Part V of the Succession Law Reform Act, and the implications for former and divorced spouses. For more on this topic, read our associate Stuart Clark’s recent blog post on the amendments.