In this week’s episode of Hull on Estates, David Smith and Diane A. Vieira discuss the issues surrounding spousal exclusion from the will of the deceased and how to challenge this exclusion.
Click "Continue Reading" to read the transcribed version of this podcast.
Many litigants are disappointed to learn that costs are no longer automatically paid out of an estate. In fact, it is now widely accepted that estate litigation can attract the usual costs consequence. As such, costs are an issue that should be considered by a party before embarking upon estate litigation. Ukrainian Catholic Episcopal Corp. of Easter Canada v. Pidwerbecki, a recent decision of the Ontario Superior Court of Justice, is instructive in this regard.
The respondents were success at trial and sought their costs. The applicant, the Ukrainian Catholic Episcopal Corp. of Easter Canada (the “Church”), argued that no costs should be awarded and that the costs requested were, in any event, excessive.
The court recognized that in estate matters, issues frequently arose upon which “reasonable persons” could “reasonably disagree”. Ambiguity in a testamentary document was cited as one such example. The court held that where there were reasonable grounds for an application, costs should generally be paid by the estate.
However, in the case at hand, there was no dispute arising out of any mistake or lack of clarity or default of the testator. According to the court, the lack of evidence supporting the Church’s position ought to have been apparent from the beginning and certainly at the end of discoveries (a good reminder to counsel to write to clients at the end of discoveries to address the merits of the case). Given the allegations of misconduct, coupled with the lack of evidence, the court held that costs, on a partial indemnity scale, should follow the cause (loser pays the winner).
The fact that the Church was a not-for-profit organization carried no weight with the court. Moreover, even though there was no adversity of interest between the respondents, the court was satisfied, despite the arguments of the Church, that it was reasonable for the parties to be separately represented. The respondents were awarded their separate costs.
Thanks for reading and have a good weekend.
The recent decision of the Ontario Superior Court of Justice in the matter of Hutchison v. Hutchison  O.J. No. 3231 (W.A. Jenkins J.) provides an illustration of the court considering the concepts of undue influence and testamentary capacity.
The plaintiffs in this case were three of the four children of the deceased. The defendants were the youngest child, and the child’s wife.
The evidence as considered by the court seriously called into question the capacity of the deceased. By 1996, the deceased was showing early signs of dementia. In 1998, he was found in his car, parked on a railway track. He was disoriented, and was taken to hospital. He was diagnosed as suffering from dementia. While in the hospital, he wandered away, and had to be returned by the police.
Following his diagnosis, he was released from the hospital and lived with the defendants at his home until his death in February, 2002 at the age of 86.
Shortly after his assessment in 1998, the deceased transferred his home to his youngest son. He also transferred his investment account. He then made a new Will wherein he bequeathed the whole of his estate to his youngest son. (In a prior Will, executed in 1992, he divided his estate equally amongst his four children.)
Some of those persons that may make dependant’s relief claims include:
(a) the deceased’s wife or husband;
(b) a brother or sister of the deceased;
(c) a former wife or husband of the deceased;
(d) a child or grandchild of the deceased; and
(e) a person treated by the deceased as a child of the family in relation to any marriage of the deceased.
The limits set out by the legislators on testamentary power are not firmly entrenched; however, there is still a struggle between the choice of providing a reasonable level of support for dependants and the enforcement of a moral duty of a deceased to divide his or her estate amongst his or her dependants. As for the powers of the Court to make an order for support, section 58(1) of the Succession Law Reform Act provides as follows:
- 58. (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the Court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.
Some preliminary considerations include:
(a) support claims are paid out of testate or intestate estates;
(b) "proper support" is truly a term of art and we will explore it in future blogs;
(c) the "Court" means the Superior Court of Justice;
(d) the claim must be made on Application;
(e) much like "proper support", "adequate provision" is a term of art that needs careful consideration; and
(f) the claim may be paid out of the assets of the estate, meaning estate assets in the usual sense plus any "clawed back" assets referred to in section 72.
In an effort to discuss claims against an estate that relate to dependant support and to claims of the surviving spouse, we thought it would be interesting to embark on a mini-series on the topic.
Family Law Act Claims
Subject to a contract to the contrary, section 6(1) of the Family Law Act provides for the right of the surviving spouse to make an equalization claim against the assets of the estate.
Since the 1970s, a general statutory proposition prevails that the value of "family property" should be split up equally when the marriage ends, regardless of which spouse holds to the property.
With the coming into force of the Family Law Reform Act, 1986 (R.S.O. 1980, c.152 (repealed and replaced by the Family Law Act 1986, S.O. 1986, c.4)), Ontario established a deferred community of property regime, which added a new dimension in relation to its impact upon surviving spouses and estates of deceased spouses and other persons who have an interest in their estates.