Tag: ogilvie estate
For my ‘Thursday Throwback’ post, I turn to an important 1981 decision from the High Court of Justice considering section 72 of the Ontario Succession Law Reform Act.
In Moores v. Hughes, an application was brought by a divorced wife for dependant support pursuant to Part V of the SLRA.
As a result of certain debts owing at the time of the Deceased’s passing, his net estate amounted to $40,000. However, as there were assets that passed outside of the Deceased’s Estate in the approximate amount of $365,000, comprised primarily of insurance policies, a joint bank account and a pension plan, a thorough analysis of section 72 of the SLRA, was undertaken. A helpful Hull & Hull LLP podcast on section 72 assets can be found here.
Often referred to as the ‘claw back’ provision, section 72 deems certain transactions to be included as testamentary dispositions as of the date of death and included in the value of an estate and available to be charged for payment for dependant support purposes. As the addition of section 72 had only recently been enacted, Justice Robins stated that the, “…section makes a significant change in the law as it stood before the enactment of the Succession Law Reform Act…Manifestly, the section was intended to ensure that the maintenance of a dependant is not jeopardized by arrangements made, intentionally or otherwise, by a person obligated to provide support in the eventuality of his death”.
Based on the Court’s interpretation of the (then) newly enacted section 72, the insurance policy, joint bank account, and pension plan, were all included in the estate and thus made available for dependant support.
Despite this interpretation, there remains estate planning techniques available to ensure that certain jointly held life insurance policies fall outside of the claw back provision of the SLRA, as addressed in the Ontario Court of Appeal decision in Madoire-Ogilvie (Litigation Guardian of) v. Ogilvie Estate.