Tag: Second Marriage
There are some important milestones in life when it is imperative for a person to update their will. A later-in-life second marriage certainly is one of them.
If your first marriage ended in divorce, the provisions in your will that refer to your spouse are automatically revoked, as provided by s. 17(2) of the Succession Law Reform Act. Your former spouse will no longer be your executor or trustee or even a beneficiary of your estate unless there is an explicit reference in your will to this.
Keep in mind the same is not true for beneficiary designations relating to assets, such as RRSPs, RRIFs, life insurance policies and pensions. Those will still flow to the individual named in those plans unless you take steps to name new beneficiaries.
If you are separated but not divorced, your will remains entirely valid upon death, in the absence of a separation agreement delineating a married spouse’s entitlement. Therefore, any bequests previously made by a spouse to a surviving spouse remain valid. This situation is not ideal either, since you want to avoid having assets flowing to a person when you are no longer involved with them.
A complicating factor with later-in-life marriages is that they can bring together children from previous relationships. From an estate-planning perspective, this can create complexities.
Perhaps the children from a first relationship resent a step-parent and feel that their step-siblings are now unfairly in line for the estate. Conversely, a step-parent may welcome a spouse’s child as their own or the couple may have a child of their own or adopt one. Where does that leave the other children from previous marriages from an estate distribution perspective?
Aside from the financial implications of having your family members squabble over your estate, there is an emotional component to consider. Children may feel slighted if they do not inherit what they consider to be their fair portion of the estate, even if the intention is that the surviving spouse, in turn, leaves assets to the children upon their death. This approach leaves room for uncertainty, which is the last thing you want to create when drawing up an estate plan.
A common practice for estate planning when it comes to second marriages is to provide a “life estate” to the surviving spouse and a “gift over” to the testator’s children. If the father were to die in this scenario, the matrimonial home and all of his money would be held in trust for his widow for life. She could then make use of these assets but would not have the right to gift them to beneficiaries of her own estate, as the assets would be given to his children upon her death.
Almost any blended-family situation creates tension that can explode into estate litigation if the will is not carefully drafted to address the family’s circumstances. It is important to be clear about your wishes with the lawyer revising your estate plan, taking into account how everyone in your blended family will react to the arrangement.
To sum up, it is crucial to seek the advice of legal counsel about wills before entering into a late-life marriage. Those that do will discover estate planning will be much different than with a first marriage when they had fewer assets and beneficiaries.
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We often encounter situations where the administration of an estate is complicated by the fact that the deceased was married multiple times, and there is a clash between children from a prior relationship and a subsequent spouse (and/or his or her children). Sometimes, a couple will be closer with one set of children, which may lead to disputes following both of their deaths. Estate of Ronald Alfred Craymer v Hayward et al, 2019 ONSC 4600, was one such case, in which Joan and Ronald had been closer for much of their 32-year marriage with Joan’s children from a prior marriage. After Joan and Ronald died in 2016 and 2017, respectively, a dispute arose between their adult children.
While Ronald’s will named his own children as beneficiaries of his estate, his Continuing Power of Attorney or Property (like Joan’s), named Joan’s daughter as alternate attorney for property, should his spouse be unable to act. Joan had acted as Ronald’s attorney for property from 2006, during which he had suffered a stroke, until her death. In 2011, Joan had transferred the couple’s matrimonial home, previously held jointly, to herself alone. During this period, however, there had been no request by Ronald’s children for an accounting. Joan’s daughter had subsequently acted as Ronald’s attorney for property and as estate trustee for Joan’s estate over the period of approximately eight months between the deaths of Joan and Ronald.
Ronald’s children sought a passing of accounts with respect to the management of their father’s property by Jane and her daughter and, specifically, challenged the change in title to the matrimonial home. The Court referred to Wall v Shaw, 2018 ONCA 929, in stating that there is no limitation period to compel an accounting. Accordingly, it considered the only bar to this relief to be laches and acquiescence. Justice C.F. de Sa commented that the there was nothing improper in the manner in which the plaintiff had sought the accounting and, furthermore, that the delay was not unreasonable in the circumstances. The Court permitted the claim regarding the matrimonial home to continue, but nevertheless declined to order a passing of accounts:
…[O]rdering the passing of accounts is discretionary. And in my view, to require an accounting at this point would result in a clear injustice as between the parties.
[Joan’s daughter,] Linda, as Estate Trustee, is hardly in a position to account for Joan’s spending while she was alive. Yet, to require a passing of accounts at this point would subject every line of Joan’s spending (as Attorney for Property) to the court’s scrutiny. Moreover, as the Estate Trustee, the Defendant would be liable to account for any unexplained expenditures.
Indeed, it is unclear that the spending was spurious given the nature of the relationship between Joan and Ronald. Joan would have been spending the money as his wife as much as his Attorney for Property. The failure to keep detailed accounts is hardly suspicious given the circumstances here.
…In the circumstances, I will not order a passing of accounts.
This decision is interesting in that it clearly considers the practicality of a passing of accounts and the inability of the deceased attorney’s estate trustee to properly account in the absence of relevant records in determining that it would be unjust to order a passing of accounts, despite there being no other apparent legal reason not to do so.
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BMO Wealth Management recently released a report entitled “Estate planning for complex family dynamics,” which details the findings of a survey commissioned to ask Canadians for their views on estate planning, inheritance, and communications about these topics within their families. The results of this survey illustrate the importance of communication in avoiding family conflict, particularly in situations where a parent is in a second marriage or common-law relationship.
Only 30% of respondents indicated that their parents had discussed their estate plans or shared details about their wills with them. The report suggests that parents who were separated or divorced were less likely to discuss their estate plans with their children.
The survey respondents were asked whether they believed the distribution of their parents’ estates had been fair. About half of the respondents believed the distribution had not been fair. The report states that respondents whose parents had any kind of relationship other than a first marriage were most likely to feel that the distribution was not fair. Of the respondents who believed the distribution was fair, three-quarters responded that their parents had divided the estate equally. The remaining quarter of respondents who thought their parents had distributed their estates in a fair way reported that the unequal distribution was justified.
When asked about what would constitute a fair distribution of assets, respondents to the survey gave a wide range of answers. Most respondents believed that children of a testator should be treated equally. A minority of respondents believed an unequal division might be fairer, for reasons such as financial need or a particularly close relationship with one child.
The dynamics of a blended family are fertile ground for conflict. Communication with all interested parties about what to expect after the death of a parent or spouse can help ease tensions and avoid surprises after death that often lead to estate battles.
You can find a copy of the full report on the BMO website.
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This week on Hull on Estates, Ian Hull and Lisa Haseley discuss the Mutual Wills Doctrine. Link to Paul Trudelle’s paper: Mutual Wills A Review http://bit.ly/2fs2l5P
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.
Click here for more information on Lisa Haseley.
A recent decision of the Saskatchewan Court of Appeal paraphrases an interesting provision (s.17) of the Saskatchewan Wills Act: “Once a testator cohabits continuously for two years and then makes a will, the law presumes the testator has turned his or her mind to the question of disentitling one’s spouse and, if the parties subsequently marry, the marriage does not revoke the prior will.”
In Santiago v Trottier 2016 SKCA 113, the daughter of the deceased (Dawn) appealed the lower court’s finding that her father’s will was revoked by his marriage. Roy Trottier died in 2012, survived by his wife, Paulette, and his two children from a previous relationship. In 1998, Roy and Paulette began to cohabit. Around the same time, Roy made a will in which his two children were appointed executors and primary beneficiaries, with some specific bequests to Paulette. Roy and Paulette married in 2012, after Roy was diagnosed with cancer. Roy died shortly thereafter.
Section 17(3) reads as follows: “[revocation by marriage] does not apply where the testator marries a person with whom he or she is cohabiting and has cohabited in a spousal relationship continuously for two years.”
Dawn’s argument was not without merit. Her submission was that, on a plain reading of the statute, Paulette and Roy had married each other after having cohabited in a spousal relationship continuously for many years. As such, Dawn submitted that subsection 17(3) should operate to prevent the 1998 will from being revoked by the marriage.
The Court of Appeal upheld the decision of the lower court, which found that the marriage did in fact revoke the 1998 will. The decision is complicated by the fact that the cohabitation provision was proclaimed in force in 2001, after the 1998 will was made. Both the lower court and the appeal court found that the making of the 1998 will prior to the spousal relationship was a key factor. Essentially, the lower court and appeal court concluded that the presumed intention of common law and married spouses to contemplate their obligations to one another would be defeated if Dawn’s argument prevailed. To quote from the appeal decision: “…the Chambers judge settled upon an interpretation that best conforms to achieving equality between married and common law couples.”
It is important to review a will or estates plan periodically, particularly after major life events, such as marriage, cohabitation, or the birth of a child. We have previously blogged on the effect of marriage on a will and estate planning after a second marriage.
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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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