Tag: Intestate Estate
Living a double life can be complicated. A double life that involves a secret second family can be especially complicated, both during the deceiver’s life and after their death. How is the deceiver’s estate to be divided as between his first family and his secret second family? What rights does the unmarried secret spouse in particular have in the deceased’s estate? The Supreme Court of British Columbia addresses these issues in its recent decision of Boughton v Widner Estate, 2021 BCSC 325.
Boughton concerns the Estate of Michael Gregory Widern. Michael was a known member of the infamous Hells Angels and died on March 9, 2017 by homicide. Michael left behind his married spouse, Sabrina, and their two children. He also left behind Sara – whom he had been seeing for roughly eight years unbeknownst to his wife – and their two children. While Michael was alive he spent time with both of his families, alternating between the two households. Sabrina had no knowledge of Michael’s second family until after he passed away.
Michael died without a last will and testament, leaving his estate to be distributed in accordance with the intestacy provisions set out in British Columbia’s Wills, Estates and Successions Act (“WESA”). In Boughton, Sara brought a claim against Michael’s estate seeking, amongst other things, a declaration that she is a spouse of Michael for the purposes of the WESA and is consequently entitled to a share of his estate. As such, one of the issues to be dealt with by the court was whether the WESA permits the division of an estate as between two individuals who were in concurrent, subsisting spousal relationships with the deceased at the time of death.
The honourable Justice Jennifer Duncan declared that Sara was a spouse for the purposes of the WESA. Section 2 of the WESA provides that two persons are spouses of each other if immediately before the deceased person’s death they were married to each other or they had lived together in a marriage-like relationship for at least two years. Justice Duncan found that on his death, Michael was still married to Sabrina and was also in a marriage-like relationship with Sara. Section 22 of the WESA states that if two or more persons are entitled to a spousal share of an intestate estate, they share the spousal share in the portions to which they agree or as determined by the court. Justice Duncan reasoned that this section clearly provides for more than one spousal share in the estate of an intestate. She also analyzed the legislative intent of section 22 and found that the intention of the Legislature was to continue to provide for individuals in a marriage-like relationship with an individual who was still married to someone else at the time of death. On this basis, Justice Duncan held that Sara was entitled to a declaration that she is a spouse of Michael as that term is defined in the WESA. It was further ordered that Sara and Sabrina were each entitled to half of Michael’s estate.
If this case were decided under Ontario law we would likely see a different result. Ontario’s Succession Law Reform Act (“SLRA”) has no provision equivalent to section 22 of the WESA which recognizes a “spousal share” in an intestate estate for someone other than the deceased’s married spouse. For purposes of intestate succession in Ontario, “spouse” has the same meaning as in section 1 of the Family Law Act (“FLA”), which is in essence a married person. It follows that an unmarried secret spouse would likely have no statutory entitlement to share in their deceased spouse’s estate. However, a secret spouse in Ontario could potentially claim an interest in their spouse’s estate pursuant to the dependent support provisions contained in Part V of the SLRA. In Part V, “spouse” has the same meaning as in section 29 of the FLA, which defines “spouse” more broadly as including persons not married to each other and have cohabited continuously for a period of not less than three years, or have children together and are in a relationship of some permanence. If a secret spouse meets this definition, they may still have a right to a portion of their deceased spouse’s estate by way of a dependent support claim.
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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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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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This week on Hull on Estates, Natalia Angelini and Laura Betts discuss a recent decision of the Queen’s Bench of Alberta, Re Johnson Estate, 2016 ABQB 616 (http://bit.ly/2fDNwNX)
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I recently came across an article published in the Toronto Star with a headline sure to catch the attention of any estates lawyer: How Ontario disinherits children in second marriages.
In the article, the author details what they believe to be the lack of awareness that many people have regarding the legal effect that a second marriage may have upon their estate plan. In outlining such concerns, the author provides the following eye-catching statement:
“Here’s a little-known fact: A second marriage invalidates your will – automatically disinheriting your children”.
While the first part of this sentence is true (subject to certain exceptions, a Will is automatically revoked upon marriage by section 16 of the Succession Law Reform Act), the second part is not necessarily true, insofar as, just because a Will is revoked upon marriage, it does not necessarily follow that the Deceased’s children would be “disinherited” by such an action. It should also be noted that the automatic revocation of a Will upon marriage by section 16 of the Succession Law Reform Act does not only apply to second marriages, but any marriage which the testator may enter into after the Will was executed.
With respect to the statement that the second marriage has the effect of “disinheriting” your children, if the Deceased should not have executed a further Last Will and Testament following their marriage, they will have died intestate. In Ontario, intestate estates are governed by Part II of the Succession Law Reform Act, which provides that, should the Deceased have died leaving a surviving married spouse and children, the first $200,000.00 of their estate is to go to the surviving spouse as a “preferential share”, with whatever remains after the payment of the preferential share being distributed to the spouse and children in accordance with specified allotments. If the Deceased should only have had one child, whatever remains after the preferential share would be distributed 50% to the spouse and 50% to the child. If the Deceased should have had two or more children, 1/3 would be distributed to the surviving spouse, with the remaining 2/3 being equally distributed to the Deceased’s children. To this effect, so long as the Deceased’s estate is valued at greater than $200,000.00, the Deceased’s children would not be “disinherited” by the marriage per se, although they could of course have stood to inherit a greater amount had the Deceased executed a new Will.
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