A recent decision by an Egyptian court saw the reversal of the trend in following Islamic Sharia inheritance law under which female beneficiaries are entitled to half the interest of their male counterparts.
The claimant, a human rights lawyer, applied to obtain the same rights as her brothers on the death of her father. Her case was previously dismissed by two courts.
In Egypt, Sharia principles are typically applied unless the parties agree that Christian inheritance laws, which do not favour male beneficiaries over females, instead be followed. In this case, the claimant and her brothers agreed that the administration of their father’s estate would not be subject to Sharia inheritance rules.
Last year, a proposed law in Tunisia designed to promote equality in respect of inheritances sparked discussion regarding unequal inheritances in a number of jurisdictions including Egypt. A 2017 survey suggests that over half of Tunisia’s population remains opposed to equal inheritance rights.
It is anticipated that this decision may result in significant change in jurisdictions where Sharia law has historically been applied in respect of personal property, regardless of religion.
Canadian courts have also considered the issue of cultures that may support an estate plan favouring sons over daughters simply on the basis of their gender. In Grewal v Litt, 2019 BCSC 1154, the daughters of the deceased challenged the Wills left by their parents, who both died in 2016, on the basis that they discriminated against them in favour of their brothers on the basis of their sex. The four daughters applied under Section 60 of the Wills, Estates and Succession Act, SBC 2009, c 13 (the “WESA“), for the variation of the Wills that directed the payment of $150,000 to each daughter, while the residue of the estates valued at greater than $9 million was left to the two sons.
Justice Adair noted that there was no dispute that the parents owed a moral obligation to their daughters under BC law, and, as the Wills made inadequate provision for them, they should be varied under the WESA. The Court attempted to resolve the matter by balancing the adequate, just, and equitable provision for the daughters with their parents’ testamentary autonomy and varied the division of estate assets from approximately 93% in favour of the sons with only a combined 7% for the daughters, to the more equitable division of 15% of the value of the estates for each daughter and 20% for each son. Notwithstanding the granting of the variation of the Wills, the Court stopped short of finding that the parents’ testamentary intentions were motivated solely by unacceptable discrimination against the daughters.
While many provinces do not recognize a parental obligation to benefit a non-dependant adult child after death, coming years may nevertheless see an increase in the number of challenges to a will on the basis that its terms are discriminatory.
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Most people know that if a person dies without a Will, the laws of intestacy govern the division of his or her estate. Specifically, it is Part II of the Succession Law Reform Act, RSO 1990, c S.26 (the “SLRA“) that is titled “Intestate Succession” that comes into play.
The question of who inherits where there is no Will is easily answered in some of the following scenarios:
- Where there is a surviving spouse (limited to married spouses, by the way), said spouse is entitled to the entirety of the property of the deceased (section 45(1));
- Where there is a surviving spouse and one child, spouse receives a preferential share of the estate of the deceased (i.e. $200,000.00 as of today) and if anything is left over, it is divided equally between spouse and child (section 46(1));
- Where there is a surviving spouse and two or more children, the spouse is entitled to a preferential share of the estate of the deceased and 1/3 of what is left over. The remainder is then divided between the issue of the deceased (section 46(2)).
The SLRA further addresses how the division of assets is to take place where the only surviving relatives are parents, brothers and sisters and nieces and nephews (in respective order of preference). If the deceased has no surviving parents, brother/sisters or nieces/nephews, the next of kin provision (section 47(6)) applies.
Despite the fact that the SLRA attempts to bring clarity to the division of one’s intestate estate, it appears that certain situations may arise that would lead to confusion, absent case law that would provide some guidance.
In Farmer Estate v Karabin Estate, an executor of a niece who predeceased the deceased commenced an application in respect of her alleged share in the estate of the deceased. The Ontario Court of Appeal found that the SLRA is confined to nieces or nephews who do not predecease the deceased and does not extend to more remote issue. The Court of Appeal relied on section 47(4) of the SLRA which is worded as follows:
“Where a person dies intestate in respect of property and there is no surviving spouses, issue or parent, the property shall be distributed among the surviving brothers and sisters of the intestate equally, and if any brother or sister predeceases the intestate, the share of the deceased brother or sister shall be distributed among his or her children equally.” [emphasis added]
In interpreting this provision, the Court relied on the definitions of “child” and “issue” as defined in the SLRA, namely the definition of “child” includes a child conceived before and born alive after the parent’s death and the definition of “issue” includes a descendant conceived before and alive after the person’s death.
In another matter, Kiehn v Murdoch, the Ontario Superior Court of Justice found that grandnieces and grandnephews are excluded from sharing in the estate of a deceased by operation of section 47(4).
Unfortunately in the circumstances where a particular scenario arises that has not been clearly addressed by the SLRA and subsequent case law, an application for directions may need to be commenced to receive some clarity from the Court as to how a particular intestate estate is to be divided.
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Traditionally, the transition from adolescence into formal adulthood has been marked by certain milestones: moving in with one’s partner, engagements, weddings, and the first purchase of a car or house, for example.
Today, however, as Dr. Steven Mintz notes in this Psychology Today article on modern adulthood, the journey to achieving adult status is “far slower and much less uniform” than it was in previous generations.
The Canadian Encyclopedia reports that in recent years, the average age of first marriage in Canada is close to 30 years old for women, and 32 years old for men. This contrasts sharply with the 1960s and 1970s, when young people in Canada were more likely to marry between the ages of 23 and 25 years old.
Similarly, while the average young adult in the sixties could expect to achieve such “emblems of adulthood” as home ownership, marriage, children, and a stable job by around the age of 24, far fewer young adults in the 2000s will have attained these markers by this same period. According to Statistics Canada, 54% of men and 43.4% of women in Canada have never married by their early thirties. In Mintz’s article, he notes that rates of childbearing, homeownership, and even car ownership for young adults have also distinctly declined from those of past generations.
Notably, many of the traditional adulthood markers relate to asset accumulation – whether it’s the paycheque associated with a steady and lucrative job, or an investment in a home or vehicle, for example. With fewer millennials travelling down these conventional paths to adulthood, and arguably having fewer assets to their names, should today’s young adults be concerned with formulating a plan for their Estate?
In my view, the answer is yes. This blog will address three of many reasons to set up an Estate Plan as a young adult today.
- Your assets can be distributed to the beneficiaries of your choice, instead of being determined by Intestacy
In Ontario, Part II of the Succession Law Reform Act (the “SLRA”) governs how one’s assets will be divided if a person dies “intestate” – namely, without a Last Will.
As many young millennial adults are unmarried and without children, I will focus on subsections 47(3)-(11) of the SLRA. These subsections delineate how an estate will be divided if one dies without a will and has neither a spouse nor children (notably, common law spouses are not included as a “spouse” on intestacy). These rules can be summarized as follows:
- If the Deceased has no spouse and no issue, the estate goes to the Deceased’s surviving parents, equally.
- If there are no surviving parents, the estate goes to the Deceased’s siblings equally (and if a sibling has predeceased, that sibling’s share goes to their respective children).
- If there are no siblings, the estate goes to the Deceased’s nephews and nieces equally.
- If there are no nephews or nieces, it goes to the next of kin of equal degree of consanguinity – in some cases, distant relatives can end up inheriting from the estate, despite otherwise having no relationship with the Deceased.
- If there are no next of kin, the estate escheats to the Crown.
Making an estate plan empowers a party to decide specifically to whom their assets – of both financial and sentimental value – will go.
Importantly, and as we have blogged on previously, any unpaid debts of the Deceased, in addition to the expenses and liabilities of the estate (e.g. funeral expenses, taxes, legal fees, etc.), are a first charge on the assets of the estate, and must be paid by the estate before assets will be distributed to beneficiaries.
- You can choose who will manage your assets, limited or not
By way of a Last Will and Testament, one can appoint an Estate Trustee (or Estate Trustees) of their Estate. Among many other critical duties, the Estate Trustee is responsible for securing the assets of the Estate; settling any of the of the Deceased’s debts and taxes; ensuring the Deceased’s assets are distributed in accordance with the Deceased’s wishes; and, often, tending to funeral arrangements.
When a person dies intestate and an Estate Trustee is not appointed, the process of the administration of their Estate becomes much more onerous, potentially more expensive, and can be significantly delayed. By executing a Will which appoints an Estate Trustee, one can ensure that a responsible and trustworthy person, who is up to the task, will give effect to their final wishes and manage their estate effectively after death.
- You can document your intentions for your intangible, digital assets
This recent Globe and Mail article sums it up succinctly: neglecting to plan for one’s online assets can create “huge headaches” for executors, especially in light of Canadians’ “expanding digital footprints”.
In addition to those online assets which have true financial value – such as cryptocurrency, Paypal accounts, and some loyalty rewards programs – many digital assets, like Facebook or Instagram accounts, can have significant personal and sentimental value. By stating one’s preferences for digital assets management in an estate plan, one can better ensure that their wishes for these assets are honoured, and potentially reduce conflicts between loved ones that might otherwise arise in this respect. The Globe and Mail cites Facebook profiles as a prime example:
” … some loved ones may want a family member’s Facebook profile to remain active after they pass away, for remembrance; while others might want to delete the account, for closure.”
If this article has inspired to start your estate planning process, we encourage you to meet with a trusted Estates Lawyer to assist with your planning needs.
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One of the most gifted items this past holiday season were apparently the home DNA tests which can reveal your genetic ancestry or even if you are predisposed to certain health conditions. As anyone who has taken one of these tests (myself included) can tell you, the test results also contain a long list of other individuals who have also taken the test who you are related to, allowing you to reconnect with long lost relatives.
While my own test results did not reveal any family secrets, the same cannot be said for other individuals who have taken the test, as there have been a growing number of articles recently about how home DNA tests have revealed family secrets which otherwise may never have come to light. Although not all of these secrets are necessarily negative, such as finding a long-lost sibling, others, such as finding out that the individual who you believed to be your father was not in fact your biological father, could be life changing. For the latter, the phenomena is apparently common enough that the Atlantic has reported that self-help groups have formed around the issue, such as the Facebook group “DNA NPE Friends”, with “NPE” standing for “Not Parent Expected”.
In reading through these stories I couldn’t help but wonder if having such a result could impact your potential entitlements as a beneficiary of an estate. What happens if, for example, the individual who you previously believed to be your biological father but the test reveals was not in fact your father should die intestate, or should leave a class gift to his “children” in his Will without specifically naming the children. Could finding out that you were not actually biologically related to your “father” result in you no longer being entitled to receive a benefit as a beneficiary? Could you potentially be disinherited as a beneficiary of an estate by voluntarily taking a home DNA test if your right to the gift is founded upon you being related to the deceased individual?
Who is legally considered an individual’s “parent” in Ontario is established by the Children’s Law Reform Act (the “CLRA“). Section 7(1) of the CLRA provides that, subject to certain exceptions, the person “whose sperm resulted in the conception of a child” is the parent of a child. Section 7(2) of the CLRA further provides for a series of presumptions regarding the identity of the individual’s “whose sperm resulted in the conception of a child“, including, for example, that there is a presumption that such an individual is the birth parent’s spouse at the time the child is born, or the individual in question certified the child’s birth as a parent of the child in accordance with the Vital Statistics Act (i.e. signed the birth certificate). To the extent that there are any questions about parentage, section 13(1) of the CLRA provides that any interested individual may apply to the court at any time after a child is born for a declaration that a person is or is not the legal parent of the child.
In applying these presumptions to our previous questions about the home DNA test, if, for example, the individual who you previously believed was your biological father was your birth mother’s “spouse” at the time you were born, or signed the birth certificate, it would appear that, subject to there being a declaration under section 13(1) of the CLRA to the contrary, there would continue to be a presumption at law that the individual who you previously believed to be your biological father would continue to be your legal “parent” in accordance with the CLRA. To this respect, in the absence of a formal declaration under section 13(1) of the CLRA that the individual was no longer your legal “parent”, there would appear to be an argument in favour of the position that the individual who you previously believed to be your biological father would continue to be your legal “parent”, and that you should continue to receive any benefits which may come to you as a “child” on the death of your “father”, whether on an intestacy or a class bequest to his “children” in his Will.
This presumption, of course, is subject to the ability of any interested person (i.e. the Estate Trustee or one of the other beneficiaries) to seek a formal declaration under section 13(1) of the CLRA that you were not in fact a “child” of the individual you believed to be your biological father. If such a formal declaration is ultimately made by the court, you would cease to be the legal “child” of the individual who you previously believed to be your biological father, and would likely lose any corresponding bequests which may have been made to you on an intestacy or as a member of the class “children” in the Will.
The use of DNA tests to establish the potential beneficiaries of an estate is not a new phenomenon (see: Proulx v. Kelly). What is new, however, are people voluntarily taking such tests en masse in a public forum, potentially voluntarily raising questions about their rights to receive an interest in an estate when such questions would not have existed otherwise.
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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,
Other blog entries/podcasts that may be of interest:
- When is it Appropriate to Extend the Time Granted in Favour of Equalization Under the Family Law Act?
- Equalization Claims and Unequal Division of the Net Family Property
- Family Law Equalization Claims and Bankruptcy
- Consolidation of Family Law Act and Dependant Support Claims
In Canada a person generally has the freedom to leave their estate to whomever they choose; known as “testamentary freedom”. However, in many of the civil code countries of Europe, a portion of the estate must be distributed to legitimate heirs; known as “forced heirship”. In Portugal, legitimate heirs include the spouse, biological descendants, adopted children, and ascendants of the deceased. The reserved portion covers up to two thirds of the whole estate, with division of the estate generally as follows:
Spouse’s portion in absence of descendants or ascendants: 50%.
Spouse and Descendants: The reserved portion is two thirds; normally distributed per capita, but in any case the spouse gets a minimum of one quarter of the reserved portion (which results in one sixth of the whole estate).
Only Descendants: The reserved portion depends on the number of children. For one child it is 50%, for two or more it is two thirds.
Spouses and Ascendants: two thirds, of which two thirds are intended for the spouse and one third for the ascendants.
Only Ascendants: 50% for those of first degree, for further degrees one third.
In the case of an intestacy and no spouse, ascendant or descendant, the estate passes to the siblings and their descendants, in their absence to the family up to the fourth degree of kinship, and then finally to the State.
The testator’s freedom to leave the remainder of the estate after the reserved portion is not generally restricted except in some cases like: the deceased’s last treating doctor if the testament was written during the illness which caused the death, the priest of the community where he attended, or a curator, tutor, or administrator of the deceased.
If you are interested in further information on the topic of international inheritance we are pleased to assist, along with our lawyer colleagues in Lisbon Portugal.
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When a marriage breaks down, spouses often have an overwhelming amount of issues to consider. For many, all they want to do is figure out how to split up the assets (and kids) and move on with their lives. Sometimes, spouses will separate without formally divorcing. Although life after marriage may be the key consideration for most, separated spouses should also take time to consider what happens on their death and whether or not they want their spouse to share in their estate.
Draft a Will
The most obvious way of ensuring that your separated spouse doesn’t benefit from your death is to draft a Will. By setting out one’s intended disposition of assets, a testator will avoid the provisions of Part II of the Succession Law Reform Act, which provides for a share of the Estate to pass to the legally married spouse of a person who dies intestate. But remember, including a provision in the will that the spouse is to be excluded from inheriting is not sufficient to keep a surviving spouse from inheriting on an intestacy (see our recent blog on this topic here).
Of course, if property rights between the spouses have not been settled following separation, the surviving spouse may still be at liberty to elect in favour of equalization of net family property pursuant to the Family Law Act.
Separation Agreements and Release of Intestacy Rights
If the parties have consulted lawyers and formally settled all of the issues surrounding their marriage, they are likely to have entered into a separation agreement. Often, parties to such agreements will walk away thinking that they have fully separated out their lives and settled all issues arising as a result of marriage, cohabitation, or the breakdown of the relationship. However, solicitors drafting such agreements should be careful to properly release each spouse’s interest in the estate of the other, in case of an intestacy. In particular, while no one likes to think of it, cases have occurred where a spouse dies only days after entering into a separation agreement and before they have had the opportunity to draft a Will.
In order to properly release a spouse’s intestate interests in the other spouse’s estate, there must be a specific release of such rights using clear, direct and cogent words (see the leading case in Ontario of Re Winter,  DLR 134 (Ont H Ct)). In Re Winter, the wife released the husband as follows:
The wife of the second part covenants and agrees and does hereby release the husband of the first part from all claims present, past or future against the husband for maintenance, alimony or separation allowance and acknowledges that she has no further claims against the husband nor against the estate of the husband of the first part.
The Court found that although there was a release against the husband’s estate, the release only dealt with claims for “maintenance, alimony or separation allowance” and was not sufficiently clear and cogent for the wife to have released her intestacy rights against the husband’s estate. As a result, the wife inherited on the husband’s intestacy (a result likely to have displeased the other intestate heirs and the husband, had he been alive).
Change Your Beneficiary Designations
Finally, in addition to thinking of the potential intestacy rights of a surviving spouse, don’t forget assets passing outside of the estate. Make sure to have all beneficiary designations on insurance policies, registered accounts (RRSPs and TFSAs), and pensions updated following separation.
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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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In a recent decision in Newfoundland and Labrador, three individuals in a polyamorous relationship were ruled to be the legal parents of a child (Re CC, 2018 NLSC 71). The trio consists of the biological mother of the child and two men, none of whom are married. Furthermore, by choice, none of the parties know which of the two men is the child’s biological father. The trio brought an application for a declaration recognizing all three as the child’s parents. The Court found that the statutory scheme in Newfoundland and Labrador regarding parentage had a gap as there was no recognition of the possibility of a child having more than two parents. The Court therefore exercised its parens patriae jurisdiction to issue a declaration that each man is the child’s father, with the result that all three parents are to be listed on the child’s birth certificate.
A moment to send some well-wishes to the officially recognized family!…And now on to the topic of their eventual deaths.
While the Court has recognized the parentage of all three members of the trio, it remains unclear how this will affect the intestacy rights of the child, should any of the fathers die without a will. Newfoundland and Labrador’s intestacy laws, like in other provinces, provide that the child of an intestate deceased person is to receive a share of the deceased’s estate. Section 2(2) of Newfoundland and Labrador’s Intestate Succession Act sets out that, for the purpose of determining intestacy rights, the relationship of parent and child is to be determined under the province’s Children’s Law Act or Adoption of Children Act.
In light of the Court’s finding that a statutory gap existed in the Children’s Law Act requiring the Court’s intervention in declaring both men to be fathers of the child, it is not clear what may happen on the death of the men in terms of potential intestacy rights of the child. The gap was such that, instead of issuing a declaration pursuant to the Children’s Law Act, the declaration was issued by relying on the Court’s parens patriae jurisdiction. While perhaps unlikely, this could potentially lead to a question of whether the child would be considered a child of both fathers for the purposes of the Intestate Succession Act. In issuing the declaration, the Court clearly intended for the declaration to provide the child the same rights as any other child when the Court stated that “to deny the recognition of fatherhood (parentage) by the Applicants would deprive the child of having a legal paternal heritage with all the rights and privileges associated with that designation.” In all likelihood, given the declaration of parentage, the child will inherit on the intestacy of any of the three. However, given the uncertainty of these newly recognized parental relationships and the possibility of future challenges by disgruntled family members (for example, other potential biological children or siblings of a deceased), parents in these types of situations should carefully consider their estate planning needs to best protect their family.
For more on this type of situation in Ontario, read our blog on the Ontario Court of Appeal decision in AA v BB.
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When is it Appropriate to Extend the Time Granted in Favour of Equalization under the Family Law Act?
Applications for an extension of time (beyond six months from date of death) to elect under the Family Law Act (“FLA”) are regularly brought before the Court. Decisions with respect to that are often dealt with by way of short endorsements.
Justice Dunphy, in Aquilina v Aquilina, 2018 ONSC 3607, a recent court decision, made some interesting comments regarding applications for an extension of time in such circumstances.
The Deceased passed away in December, 2017, leaving the Applicant (his wife) and their three adult children. The Applicant was primarily a homemaker and as such, her level of information regarding the family financial affairs was imprecise. The Estate was not a simple one to administer, in part due to a number of business interests the Deceased had in the family’s native country, Malta, held through various corporations, real estate holdings and an active business.
At the time of the hearing, the Estate did not have an administrator. It was determined that the Deceased did not leave a Will.
The Applicant in this matter had two options – making a claim under the Succession Law Reform Act (“SLRA”) or the FLA.
Under the SLRA, in the event of an intestacy, the beneficiaries of the Deceased’s estate are the Applicant and their three adult children. Under s. 46(2) of the SLRA, where there is no Will and there is more than one child of the Deceased, the surviving spouse is entitled to 1/3 of the Estate plus the “preferential share” prescribed by s. 45 of the SLRA.
In contrast, s. 5(2) of the FLA provides that the surviving spouse will receive 1/2 of the difference between the value of the net family property of each of the spouses where the Deceased had the higher of the two amounts.
The Applicant has a period of six months from the date of death to make the election as per s. 6(10) of the FLA. Absent an election, the surviving spouse takes under the SLRA.
Criteria for Extension
The Applicant requested that the court: (i) extend the time to make an election until two years from the date of the application; (ii) extend the time for the deemed election to the same date; and (iii) extend the time during which distributions from the Estate are suspended until the same date.
In making a finding, the Court must consider:
- Whether there are apparent grounds for relief;
- Whether delay, if any, was incurred in good faith; and
- Whether anyone will be substantially prejudiced by the delay.
It is important to note, that the surviving spouse does not have to have precise and accurate information but that he or she must have sufficient information to make an informed choice. Justice Dunphy noted that extensions are intended to be the exception and not the rule.
Analysis and Decision
Justice Dunphy held that it was going to take a period of time – very likely a year or more – to be able to gather the facts necessary to understand the value of this Estate and the Applicant’s intersecting interests within (meaning the consequences flowing from her different roles as a shareholder, widow and spouse). Therefore, Justice Dunphy held that there are some grounds for relief in the circumstances of this case.
In considering whether there was any delay that was not incurred in good faith, though Justice Dunphy noted that the Application was brought very close to the six month anniversary of the Deceased’s date of death, he placed weight on the fact that the death was “sudden, unexpected and shocking” and the relative complexity of the Estate. He held that the delay was incurred in good faith.
Justice Dunphy found that there would be no substantial prejudice in this case if an election was granted because the only other beneficiaries of the Estate are the three adult children of the Deceased and the Applicant, who confirmed that they did not oppose the motion. He did balance against that finding, however, the inherent prejudice in having all or a substantial portion of the Estate frozen. In making this consideration, Justice Dunphy found that any prejudice in this matter was slight.
Based on the facts, Justice Dunphy held that more time would be required to consider the rights of the Applicant, as the surviving spouse, under the SLRA as compared to the FLA. As such, he granted the Applicant all the relief sought, but reduced it to one year from the date of the Application instead of the two years that the Applicant was seeking.
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