Tag: Domestic contract

03 Aug

Dependant’s support – notwithstanding any agreement to the contrary

Sydney Osmar Estate & Trust, Litigation, Support After Death Tags: , 0 Comments

Last week, Jonathon Kappy and I podcasted on the recent decision out of the Superior Court of Justice, Virey v Virey, 2021 ONSC 2893.

In this decision, The Honourable Madam Justice Dietrich tackled the question of whether an Estate should have an ongoing obligation to support a dependant, even where the dependant had entered into an agreement, which the Estate Trustee argued, released the Estate from any ongoing support obligations.

In Virey v Virey, at the time of the Application, the Applicant was 94 years old. The Applicant had been married to the deceased for 42 years, together having 9 children. However, the Applicant and the Deceased divorced in 1994. The Deceased died with a Will dated December 9, 2018 – neither the Applicant, nor any of their children, were named as beneficiaries of the Will. Instead, the Deceased’s spouse, the Respondent, was named sole beneficiary and Estate Trustee.

At the time of the divorce, the Applicant was 67. The Minutes of Settlement and the Divorce Judgment (based off of the Minutes of Settlement), set out that the Deceased was to pay three lump sum installments, along with monthly child and spousal support. The Minutes of Settlement set out that the monthly spousal support was final and not subject to variation, and, included a release with respect to support pursuant to the Family Law Act, the Divorce Act, pursuant to the common law, or otherwise.

At the time of death, the Deceased was survived by 7 of his 9 children, the Respondent and the Applicant. He had no debts, owned real property valued at approximately $923,000 and liquid assets of approximately $972,000. The Applicant had no significant savings, with her primary income comprised of OAS and CPP benefits.

While the Respondent argued that the Minutes of Settlement fully released the Estate from any ongoing obligation to support the Applicant, the Court reached a different determination.

As a starting point, the Court turned to section 63(4) of the Succession Law Reform Act (“SLRA”), which sets out that the court has the discretion to make an award for support “despite any agreement to the contrary”. Relying on this sub-section, the Court held that the Minutes of Settlement and the Divorce Judgment, while relevant documents to factor into the analysis, were not determinative and did not oust the Court’s jurisdiction.

As part of its analysis, the Court looked to the decision in Butts v Butts Estate, where the court held that “s. 63(4) gives the court a broad judicial discretion to award support to a dependant, as defined in s. 57, notwithstanding the existence of any prior agreement or waiver. The language of s. 63(4) could not be broader or clearer in its purpose and is obviously aimed at achieving justice and equity at the date of the hearing, notwithstanding what the parties have agreed to earlier on”. Therefore, the Court in Virey concluded that even if the Deceased’s legal obligation ended on his death, the Court is not precluded from ordering support payable by the Estate under the SLRA, as support may ultimately be ordered to achieve equity.

In turning to the analysis regarding quantum required by the SLRA, and the factors provided for at section 62(1), the Court considered Cummings v Cummings, finding that while the SLRA provides a remedy akin to spousal support, unlike spousal support which is determined on the payor’s means and the recipient’s needs, with regard to dependant’s support, the Court must consider not only the Applicant’s needs but also the legal, moral and ethical claims.

In conducting this analysis the Court further considered the fact that at the time of the Minutes of Settlement and the Divorce Judgment (i.e. 1994) societal values regarding quantum and term of support were different than those of today – in 1994, the prevailing view was that on the termination of marriage, the dependant spouse was to be maintained, and nothing more. This is in contrast to the prevailing view today, which is that spouses are entitled to not only proper support, but also a share in each other’s estates when the marriage is over.

In light of the above analysis, the Court ultimately ordered the Estate to pay monthly support to the Applicant for the remainder of her life.

For more on this decision, please see here to listen to last week’s podcast.

For more on dependant support, please see the below blogs:

Dependant Support – Quantum of Support

Dependant’s and Their Entitlement to a Deceased’s Estate

Thanks for reading!

Sydney Osmar

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

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