Tag: Spousal Support
The answer is no according to Borges v. Santos, 2017 ONCJ 651.
In Borges v. Santos, a garnishment proceeding was commenced by Maria, who was entitled to child support from Antonio. Maria sought to garnish a trust that was established from the Estate of Antonio’s mother. Pursuant to the Will of Antonio’s mother, the Trustees were given an absolute and unfettered discretion to pay any part of income or capital for Antonio’s benefit and to keep Antonio’s comfort and well-being in mind in exercising their discretion. In this case, the Trustees also happened to be Antonio’s brother and sister as well as the gift-over beneficiaries of this Trust such that they will be entitled to all income and capital that were not distributed to Antonio 21 years after their mother’s death.
In one of her arguments, Maria contended that the Trust was not truly discretionary because of the non-arm’s length relationship between the Trustees and Antonio since they were siblings. The Court in case clarified that Tremblay v. Tremblay, 2016 ONSC 588, “does not stand for the proposition that all familial relationships between trustees and beneficiaries automatically demonstrate that the trust is under the control and hence the property of the beneficiary” for the purposes of the Family Law Act.
Interestingly, Antonio gave evidence in this proceeding that he wanted the Trustees to honour his child support obligations to Maria, although they chose not to comply with his wishes. Ultimately, as obiter, the Court also asked the Trustees to consider making a distribution to Antonio for his comfort and well-being by supporting his son, Christopher, while acknowledging that he could not order them to do so.
For those of you who are interested in the essential elements of a Henson Trust, click here, for a previous blog on this topic by Ian Hull.
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I am often asked what effect child and/or spousal support obligations have on an estate. Do they cease as a result of the payor’s death or does the payor’s estate owe an obligation to continue the payments?
In Ontario, the law is clear as to an estate’s obligation to continue making support payments. According to section 34(4) of the Family Law Act, “an order for support binds the estate of the person having the support obligations unless the order provides otherwise”.
The rationale is explained by the leading decision of Linton v. Linton where the Ontario Court of Appeal held that as long as no contrary order is made, a support order is binding on the payor’s estate. Specifically, “…the practice of the family law bar…in which support is an issue…is to provide for the continued payment of support by the estate of the payer, or the payment of a capital sum, usually through life insurance, as a substitute”. Otherwise, the Court of Appeal states that if a support order is not binding on an estate, the needs of the survivor remain intact without any payments to satisfy them.
In the context of the Linton decision, the Court of Appeal states that the surviving spouse has every reason to expect that she is to be looked after in a financial way in the event her husband predeceased.
So what’s the bottom line? When seeking an order or negotiating in a separation agreement for the payment of child and/or spousal support, parties must be explicit as to whether support continues post death and whether that obligation is secured by life insurance.
Find this topic helpful? Please also consider these related Hull & Hull LLP Blogs:
- Dependants’ Support and the Spousal Support Guidelines
- Support Orders and the Limiting Role of the OCJ
- When Does a Separation Agreement Release an Entitlement Under a Will?
Listen to A Review of Dependant Support Claims
This week on Hull on Estates, David Smith and Jonathan Morse review some of the recent podcasts and hone in on some of the evidentiary requirements of a common-law spousal relationship as it relates to dependant support claims under the Succession Law Reform Act. They look at some recent case law and some of the requirements under the Ontario statute.
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Listen to Declarations of Death Act
This week on Hull on Estates, Sean Graham and Rick Bickhram talk about the Declarations of Death Act. They discuss what happens when a person goes missing from a jurisdiction and some possible remedies.
Read the transcribed version "Separated Spouses and Estate Planning Issues"
During Episode #58, Ian and Suzana discuss estate planning and separated spouses including the equalization process, the importance of valuation on the day of separation, and how issues of spousal support and child support can dovetail into estate planning.
Suzana mentions the case of A.A. v. B.B., 2007 ONCA 2 from the Ontario Court of Appeal, wherein a child may have three parents.
Read the transcribed version of "Tax Considerations for Separated Spouses"
During Hull on Estate and Succession Planning Podcast #57, Ian Hull and Suzana Popovic-Montag discuss tax considerations to keep in mind within the context of separated spouses.
They cover such issues as tax liability, spousal support and child support deductability and the deductability of legal fees.