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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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.
Thank you for reading.
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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Shortly after a death, the Estate Trustee is called upon to make important decisions about the funeral and burial arrangements for the deceased.
In many instances, the deceased’s Last Will and Testament may provide instructions to the Estate Trustee regarding the funeral or the burial. However, such wishes regarding burial and funeral arrangements are precatory and not binding on the Estate Trustee. Generally speaking, while it is advisable for an Estate Trustee to consider the wishes of the deceased and his or her next-of-kin when making decisions about the funeral and the burial, the Estate Trustee’s authority to make such decisions is only constrained by a legal duty to dispose of the remains in a dignified manner.
While the authority to make these decisions is fairly straightforward where a deceased person leaves a Will naming an Estate Trustee, conflicts between family members can arise when the deceased dies intestate. This was recently illustrated by the Honourable Justice Smith’s decision in Catto v Catto, 2016 ONSC 3025.
In Catto, the Deceased died after less than a year of marriage to his spouse, Donna. Donna made arrangements for the Deceased’s funeral and burial in his hometown of LaColle, Quebec. However, before the Deceased’s ashes could be buried in his family’s plot in Quebec, Donna advised the funeral director that she wished to transport the ashes back to Peterborough. The funeral director advised Donna that the Deceased’s place of burial was ultimately her decision, and Donna decided to have the ashes interred in Peterborough without notice to any of the Deceased’s family members.
The Deceased’s mother subsequently brought an Application, alleging that the Deceased had wished to be buried in the family plot in Quebec and that Donna had agreed to the Deceased’s burial in the family plot. The Deceased’s mother sought Orders that the Deceased’s ashes be exhumed and that half of the ashes be returned to the family plot. As the Deceased had died without a Will, she also sought an Order appointing her as the Deceased’s Estate Trustee.
Where a person dies intestate, section 29 of the Estates Act gives the Court the discretion to appoint the spouse or common law partner, the next-of-kin, or both the spouse and the next-of-kin as the Estate Trustee. Justice Smith confirmed that section 29 does not confer a priority to the spouse to be appointed as Estate Trustee.
However, in the circumstances, given that the Deceased’s mother lived outside Ontario, that Donna was the sole beneficiary of the Deceased’s Estate, and that there was no potential conflict of interest with her appointment as Estate Trustee, Justice Smith concluded that the administration of the Deceased’s Estate should be committed to his spouse.
Thus, Justice Smith held that “[t]he decision on where the deceased is to be buried and the manner of burial is a right that is granted to the administrator of the Estate which in this case, is his wife Donna.” The relief sought by the Deceased’s mother with respect to the exhumation and reburial of the Deceased’s ashes was denied.
The Catto decision highlights the conflicts that can emerge on an intestacy, and serves as a reminder of the importance of making a Will: although the testator may not be able to dictate the terms of his or her funeral and burial, he or she may be able to minimize the conflict and acrimony over who has the authority to make these decisions by simply naming an Estate Trustee.
Thank you for reading,
Umair Abdul Qadir
As speculation starts to appear in the media about the estate of the late Muhammad Ali, who passed away this past weekend, the typical estate questions emerged in the press: who will inherit his estate and how much do they stand to benefit?
When a celebrity such as Muhammad Ali (or Prince) passes away it is always an important reminder of estate issues that may arise, particularly when blended families are involved. For instance, my colleague Laura Betts recently revisited the issue of mirror or mutual Wills and what can happen when the surviving spouse changes their Will after their spouse has passed away.
Another issue that comes to mind are the possible claims that could be made against an estate by a long lost child.
In Ontario, any person appearing to have a financial interest in an estate may make an application to the court under the Rules of Civil Procedure seeking the court’s direction with respect to the estate.
Where a person claims to be a child of a deceased, section 8 of the Children’s Law Reform Act (the “CLRA”) imposes a rebuttable presumption of paternity in limited circumstances. In the alternative, the court has the jurisdiction pursuant to s. 10 of the CLRA to order DNA testing so that a finding as to the parentage of the applicant can be made.
Depending on the circumstances of the case, once the applicant is found to be the biological child of the deceased, a number of claims could potentially be asserted. For example, if the deceased died testate, the wording of his or her Will could give rise to an interpretation issue. Alternatively, in the case of an intestacy, the biological child may assert their statutory entitlement to the estate. In both instances, however, if the biological child falls within the scope of Part V of the Succession Law Reform Act then a claim for dependency may also be asserted.
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Would it occur to you if you had nearly 200 reptiles living with you, that you really should make a Will? Recently in Ontario, this issue slithered into the Courts.
The National Post this week reported the story of a Welland, Ontario man who died, as a result of an unexpected stroke, in May at the age of 52. Uniquely, he was survived by 200 exotic reptiles. Unfortunately, he did not leave a Will. Without a Will, there was no named executor for his estate and no directions with respect to the division of his assets or care of his exotic pets. This resulted in litigation, which only recently settled.
If you die without a Will, you are considered to have died "intestate." Simply put, this means that statutory provisions decide how your assets will be divided. Any intentions you may have had for your assets, which technically include any animals you own, are not factored into the statutory distribution scheme.
In Ontario, if a person dies intestate, Part II of the Succession Law Reform Act governs who is entitled to their estate. As regular readers of our blog know, the order in which relatives of a deceased are entitled to inherit in an intestacy is, as follows:
- If there is a spouse (defined as a married spouse only) and no children, the spouse takes all.
- If there is a spouse and any children, the spouse gets the first $200,000.00 (the preferential share) of the estate. If there is only one child, the balance of the residue is divided between the spouse and the child equally. If there is more than one child, the spouse gets one-third of the balance of the residue and the children share the other two-thirds equally.
- If there is no spouse, the estate goes to the children equally.
- If there are no children, the estate goes to the deceased’s parents equally.
- If there no surviving parents, the estate goes to the deceased’s siblings equally; if a sibling has predeceased, that sibling’s share goes to his or her 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 who may have had no relationship with the deceased can end up inheriting.
- If there are no next of kin, the estate escheats to the Crown.
Having a thoughtfully considered and up-to-date Will is necessary not only to ensure that your intended beneficiaries share in your estate in a manner that it is appropriate and reflects your wishes, but also to ensure that your menagerie, should you have one, is provided for too.
Thanks for reading. Enjoy the weekend,
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.
Common law spouses are not included in Part II of Ontario’s Succession Law Reform Act, which governs intestate succession (dying without a valid Will).
In British Columbia, unlike Ontario, intestate laws now provide the same rights to common law spouses as to married spouses, if the couple lived together in a marriage-like relationship for a period of at least two years before the death of one of them. Recent case law out of British Columbia has grappled with the issue of identifying common law spouses in cases of intestacy.
In Austin v. Goerz, 2007 BCCA 586, the deceased had been separated, but not divorced, from his wife for six years. During the last six years of his life, the deceased lived with another woman, Ms. Goerz, as husband and wife. The deceased died without a Will. On the death of the deceased, the legally married spouse, Mrs. Austin, brought a claim seeking a declaration that Ms. Goerz was not the deceased’s common law spouse. The lower court dismissed Mrs. Austin’s claim, and she appealed to the British Columbia Court of Appeal. On appeal, Mrs. Austin argued that the deceased, while legally married, could not have a common law spouse as he lacked the legal capacity to marry. Mrs. Austin also argued that Ms. Goerz was not a common law spouse as there was no financial dependence between her and the deceased during their relationship. Both arguments were dismissed. The Court of Appeal recognized that common law relationships can exist even though one or both partners lack the capacity to marry. Furthermore, lack of financial dependence is not determinative in identifying common law relationships.
Have a great day!
Bianca La Neve