One of the most cherished icons of the law affecting the making of one's Will in this country is the freedom to leave your estate to whomever you want. It had a certain appeal in a pioneer society such as Canada at the turn of the 20th century, but Canada was also a country where the tax base had hardly evolved to the point where familial obligations assumed by its citizens during their lifetime could be left on the doorstep of the state after death in response to this need. The provinces began to create legislation to allow the courts to impose these obligations on a testator who failed on death to make adequate provision for the support of his dependants.
Any legislation to remedy this problem naturally leads to the question of who is a dependant, and what is a reasonable level of support for that dependant in the context of the family circle to which the dependant belongs.The right to claim support arises for a dependant when the testator has died, leaving a Will which makes inadequate provision for that dependant, or when the testator has no Will at all. Under the Succession Law Reform Act (SLRA), a dependant can come from any one of the following groups: a surviving spouse; a brother or a sister of the deceased; a former spouse of the deceased; a child or grandchild of the deceased; or a person who has come to be treated by the deceased as his or her child during the course of the deceased's marriage to his or her parent.
One can easily see a small crowd of applicants forming at the courthouse, except that the legislation also contains the caveat that the dependant must have been someone to whom the deceased, at the time of death,was providing support, or was under a legal obligation to provide support.The spousal category has been expanded to include common law spouses. These are persons who have cohabited in a conjugal relationship for not less than three years, or have been in a relationship of some permanence from which a child has been born or adopted.
Therefore, the court has to go through the crowd at the courthouse door to determine if the deceased was, or should have been, providing support to the potential dependant and failed to make adequate provision in a Will for that dependant. The list of circumstances that the court must consider is found in the SLRA and is not exhaustive; although it may be exhausting for the judge in terras of having to explore the minutiae of the relationship between the deceased and putative dependant.
Some examples of the criteria considered by the court include the current assets and means of the dependant while residing with the deceased, the measures available for the dependant to provide for his or her own support, and the length of time that would be required to enable the dependant to achieve those measures to become independent. Contributions made by the dependant to the deceased's property or business may also quality the dependant for support, but that is reflected in the actual benefit achieved and enjoyed by the deceased as a result of these efforts.
A child remains dependent if the child remains within parental control.A child who is 16 years of age or over,and has withdrawn from parental control is not owed an obligation for support from the deceased's estate. If the court gets a sense that the deceased's behaviour was the reason the child withdrew however, it will not disqualify the child from the dependant's relief for this reason alone.
The court will also examine the course of conduct of the surviving spouse of the deceased during the deceased's lifetime, and if that conduct was so unconscionable as to constitute an obvious and gross repudiation of the relationship, the misbehaving spouse may also be disqualified. Examples of this kind of behaviour would be longstanding alcoholism, physical or mental cruelty, or a lifetime of infidelity. In my experience, an applicant for dependant relief has to be realty bad to be deprived of financial relief. The legislation has tried to be as all-encompassing and remedial as possible to ensure that the deceased has assumed all legal responsibilities for his or her dependants instead of imposing them on the state.
Sometimes the testator's failure is not deliberate. As an example, the testator who excluded his wife from his Will because he had provided for a large life insurance policy on his death to replace his obligation to look after his spouse's even need; but he also forgot to pay the premium during his lifetime and let it lapse because he had lost mental capacity and was unable to manage his own affairs. The court will correct this lapse on the part of the testator and provide support in the circumstances; usually if possible, equivalent to what he had intended in the first place.
One of the best illustrations of the struggle endured by the court in coming to a reasonable and responsible conclusion in the face of so many competing interests is the Cummings Estate decision.The case revolves around Mr. Cummings, who lived with his first wife for 30 years, but divorced in 1992.The couple had two children by their marriage. The court had no difficulty finding that their 28-year-old son was dependent because he was seriously and permanently disabled, and he was already in receipt of support from his father at the time of his father's death. It was not questioned by any of the parties to the case that the needs of this son could easily take up the entire resources of the estate in order to support the son for the rest of his life. Mr. Cummings, however also left behind a daughter who was 18, was attending university and was receiving support under a court order.
Two years after Mr.Cummings separated from his first wife in 1986, he commenced living with another woman whom he would marry in 1997. Mr. Cummings had a significant income of approximately $300,000 a year, but he lost his employment in 1994 with the result that he could not keep up the support payments that he had put in place for his first wife. Strangely enough, it was his second wife who helped him cover his support payments as well as share the costs of their matrimonial home.
Mr. Cummings made a Will in December of 1997, and then a Codicil in June of 1998, only 20 days before he died. In it, his second wife was named as the estate trustee, and he set up a trust fund of $125,000 for his children for their support,leaving the remainder to his second wife. In actual fact, neither his first nor his second spouse made a claim for support as his spouse.The only claim of the first wife was for her two children.The judge at trial awarded the matrimonial home, valued at $422,500, to the second wife because she had contributed significantly to its purchase. However,the remainder of the estate was divided into two parts: the first part in the sum of $10,000 was granted to the daughter, and the remaining funds were placed in trust for the son during his lifetime.
In reviewing the matter, the Ontario Court of Appeal looked to a recent British Columbia decision called Tataryrt, which went to the Supreme Court of Canada. The case explored British Columbia's version of Ontario's Succession Law Reform Act, which had broader wording, allowing the Supreme Court to find a remedy that was adequate, but also just and equitable in the circumstances. In other words, it reviewed the moral aspects of a father and his obligations towards his family.The Ontario Court of Appeal in the Cummings decision, without similar wording in the Ontario legislation, embraced this approach and looked at the Succession Law Reform Act not only as support legislation, but also as a way of ensuring that the spouses and children of a testator receive a fair share of the family wealth.
Not everyone who applies for support as a dependant is successful in obtaining money. In one case, a deceased testator left his second wife over $1 million, which was most of his estate. The balance was left to his children by his first marriage and to his grandchildren.The court held that his second wife was his dependant, and that the only question left to decide was whether the provisions made for her by the testator were adequate. In this case, the widow cleared $45,000 net of tax each year, and the court found that the widow's claim was driven by her wish to maintain the standard of living she was used to while her husband was alive and not by need, so her claim failed.
These cases indicate a trend to treat the issue of dependant's relief as a morality play to provide a broader level of justice and equity between the parties than is afforded by the stricter language of the legislation. As William Shakespeare wrote, "all's well that ends well; still the fine's the crown; whate'er the course, the end is the renown."
John Johnson is a partner with the law firm of Nelligan O'Brien Payne (www.nelligan.ca), and leader of the firm's Will and Estates practice group.
[This article was originally published in the July 2014 issue of Fifty-Five Plus Magazine.]