Freedom Has Its Limits

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Testamentary freedom, namely the right to leave your property to anyone you choose upon your death, is a highly-valued and cherished concept in English common law.  The concept of testamentary freedom is based on a philosophy of the primacy of individual rights which has dominated legal and political thinking in common law countries.   It is interesting to note that, in contrast, in civil law jurisdictions such as France and many other European countries, there is no testamentary freedom.   One’s estate must pass on death in fixed proportions to various family members similar to what happens in Ontario if a person dies without a will.    

In Ontario, the Family Law Act and the dependant relief provisions set out in Part V of the Succession Law Reform Act provide that a married spouse and other dependents of the deceased have a right to a certain share of the deceased’s estate otherwise the will can be contested.

But what about an adult child or a common law spouse who is already financially independent?  Do such individuals have a right to receive a share of the deceased’s estate?    

The court had to wrestle with this issue in the recent case of Morassut v. Jaczynski Estate (2013 ONSC 2856).  Danny and Bonnie lived together as common law spouses for 12 years.  Bonnie controlled one of the most valuable car dealerships in Ontario.  Danny, who had previously worked in Bonnie’s car dealership, described himself as Bonnie’s “house-husband”.  He managed the family household and acted as the project manager in the building of a second family home.  Their relationship was extremely close and they enjoyed a very high standard of living.  In 2008, Bonnie was diagnosed with breast cancer. Danny looked after Bonnie throughout her treatment.  In 2010, Bonnie was told that the cancer had spread to her liver and six days later, on her 54th birthday, Bonnie died.   The total value of Bonnie’s estate was approximately $17 million.   Despite the fact that Danny had financial assets of his own and was paid $1 million from the estate, Danny contested Bonnie’s will on the grounds that she had not provided “proper support” to him.

The lawyers for Bonnie’s estate argued that the “principle of testamentary freedom” should not lightly be interfered with.   At age 55, Danny was capable of returning to the workforce to supplement his investment income and it was not reasonable for Danny to think that he was entitled to have the same lifestyle that he had when Bonnie was alive.

The court disagreed.  Citing the leading decision in Tataryn v. Tataryn Estate, where the Supreme Court of Canada held that “moral considerations are relevant” in determining the amount of support owed to a dependent (in other words, what would a “judicious person ...do in the circumstances, by reference to contemporary community standards?”), the court concluded that Bonnie had both a moral and a legal obligation to continue to provide support to Danny after her death.   In addition to the $1 million that Danny had already received from the estate, the court awarded Danny the second family home worth approximately $1M at the time of Bonnie’s death along with a payment of $100,000 every year from the estate and $50,000 every five years for a new car for Danny’s lifetime.

The Morassut decision is consistent with a growing trend by the courts away from the rigid application of the concept of testamentary freedom.  When drafting their wills, individuals need to give careful consideration to the potential claims of any possible “dependents” if they want to reduce the risk of expensive and acrimonious estate litigation upon their passing.

William Hinz is an Associate at BrazeauSeller.LLP. He practices in the areas of Tax & Estate Planning and Corporate & Commercial Law. William can be reached at 613-237-4000 ext. 249 or whinz@brazeauseller.com. For more information about William, please visit www.brazeauseller.com.

   

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