Toronto Estate Litigation Lawyer

Category: INHERITANCE

  • SURPRISE! Discovering Your Deceased Spouse Had Another Family or Unknown Children: How It Affects the Estate and Will

    SURPRISE! Discovering Your Deceased Spouse Had Another Family or Unknown Children: How It Affects the Estate and Will

    Finding out that your deceased spouse had another relationship, or even children you never knew about, is one of the most painful revelations imaginable. Beyond the emotional betrayal, this discovery creates serious legal and financial consequences for the estate.

    When There Is No Will: Intestacy and Hidden Families

    If your spouse dies without a will, Ontario’s Succession Law Reform Act (SLRA) governs who inherits. The law sets out a clear order of priority:

    • The married spouse receives a preferential share (currently $350,000).
    • The remainder of the estate is divided between the spouse and the deceased’s children.
    • If there is no spouse, the estate passes to the children; if no children, then to parents, siblings, or next of kin.

    However, if the deceased had children from another relationship, even ones you didn’t know existed, they are legally entitled to share equally with other biological or adopted children. That means your spouse’s secret child from a previous relationship could legally inherit part of the estate, reducing what you and your known children receive.

    When There Is a Will: Unequal Treatment and Dependant’s Relief

    Even if your spouse left a will, new or unknown dependants may still have legal claims. If a will excludes a child or common-law partner who was financially dependent on the deceased, Ontario law allows them to bring a Dependant’s Support Application under Part V of the SLRA.

    Courts can order that:

    • A child not named in the will receives support from the estate, even if born outside marriage.
    • A common-law spouse or partner receives adequate maintenance.
    • An estate be frozen or redistributed until all dependants are accounted for.

    Case Study: Estate of Thiodore Moiseas, Lessons from a Disputed Family Tree

    The 2021 Ontario case Stoyan v. Johnson, 2021 ONSC 7483 (CanLII), shows how courts treat uncertain or disputed family connections. In the Estate of Thiodore (Ted) Moiseas, the deceased’s spouse and son had predeceased him, leaving no clear heirs. Competing relatives in Canada and Macedonia claimed to be the closest next of kin, and one sought a Benjamin Order (a court declaration that untraceable heirs be presumed dead so the estate can be distributed).

    The court refused the request. The applicant’s genealogical evidence was inconsistent, incomplete, and based on family lore. Key documents such as birth, marriage, and death certificates were missing, and the supposed kinship link was unproven. The judge found that without solid genealogical proof, no distribution could occur. The court ordered the prior trustee’s estate to pass accounts and pay the funds into court until rightful heirs were identified, with the Office of the Children’s Lawyer representing unknown beneficiaries.

    Takeaway: Even if you believe you are the rightful heir, family stories are not evidence. The court requires verified documentation and professional genealogical proof before declaring others predeceased or distributing an estate.

    Hidden or Unknown Children: Proving or Defending a Claim

    If a person claiming to be a child of the deceased comes forward after death, the estate trustee (and any existing heirs) must verify the claim. This often involves:

    • DNA testing or genetic evidence
    • Birth certificates or official records establishing parentage
    • Affidavit evidence showing the deceased acknowledged or supported the child
    • Financial records demonstrating dependency

    Conversely, if you are a surviving spouse who learns of an unknown child, you may wish to:

    • Request a stay of distribution until the child’s claim is proven
    • Seek court directions under Rule 75.06 or s. 29 of the Estates Act
    • Appoint a neutral estate trustee to ensure fairness among potential heirs.

    Protecting Your Rights as a Surviving Spouse

    If your spouse’s infidelity or hidden family surfaces only after death:

    • You remain entitled to your spousal share under the SLRA or to elect for equalization under the Family Law Act.
    • You can demand full financial disclosure and accounting of the estate before any distribution.
    • If necessary, you can apply to the Superior Court of Justice to restrain distribution or compel a passing of accounts.

    How Derfel Estate Law Can Help

    Navigating these issues requires both compassion and precision. At Derfel Estate Law, we:

    • Investigate hidden heirs and disputed paternity claims
    • Represent surviving spouses, children, and dependants in Ontario estate litigation
    • Prepare and defend Dependant’s Support Applications
    • Pursue or defend Benjamin Orders when heirs cannot be found
    • Guide executors through complex cross-border heirship investigations.

    Key Takeaway

    When a hidden family or unknown child emerges, Ontario estate law does not turn a blind eye; it demands proof, transparency, and fairness. Courts will not distribute an estate until every potential heir has been accounted for. If you’ve discovered that your spouse had another family, an unknown child, or dependants you never knew existed, or if you believe you’ve been unfairly excluded from an inheritance, you need experienced guidance.

    Frequently Asked Questions (FAQs)

     

    1. Can unknown or secret children inherit in Ontario?

    Yes. Under Ontario’s Succession Law Reform Act, biological and legally adopted children have equal inheritance rights, even if the surviving family did not know of their existence.

    1. What if the deceased had a common-law partner and a secret spouse?

    Only legally married spouses automatically inherit under Ontario intestacy law. Common-law partners may still claim support under the SLRA if they were financially dependent on the deceased.

    1. Can DNA testing be ordered after death to prove a child’s claim?

    Yes. Courts can order posthumous DNA testing or permit comparison of genetic material to establish parentage, particularly when estate assets are in dispute.

    1. What happens if I discover my spouse’s other family after probate is granted?

    You can apply to the court to suspend or vary the Certificate of Appointment, seek an accounting, and, if needed, bring a dependant’s relief or will challenge application.

    1. What is a Benjamin Order?

    A Benjamin Order is a court declaration that allows an estate to be distributed when certain heirs cannot be located or proven to exist. Courts only grant it after exhaustive searches and credible genealogical evidence.

    1. How can I protect my rights if another family makes a claim?

    Contact an experienced estate litigation lawyer immediately. They can secure the estate assets, request a passing of accounts, and ensure your interests are protected while the claims are verified.

    1. Does Ontario recognize children from relationships outside Canada?

    Yes, if legitimate documentation or proof of parentage can be provided. International claims require certified translations and often professional genealogical support.

    1. Can a will be changed after death to include a forgotten dependant?

    A will itself cannot be altered, but the court can order support or redistribution from the estate to provide for excluded dependants under the SLRA.

    1. How long do I have to make a claim against an estate?

    Generally, dependant’s support claims must be brought within six months of probate being granted, but courts can extend this period in exceptional cases.

    1. What should executors do if they suspect unknown heirs exist?

    Executors must take reasonable steps to locate and notify all potential beneficiaries. Advertising in relevant regions and hiring a professional genealogist are often necessary steps.

     

    Contact Derfel Estate Law

    At Derfel Estate Law, our lawyers, including David Derfel and Charlie Fuhr are experienced in estate disputes. We understand the emotional and financial strain these cases cause and are committed to finding cost-effective, compassionate solutions that protect your rights.

    Contact us today to schedule a confidential consultation.

  • Why is My Stepmother Getting All the Money? The Preferential Treatment of Spouses in Inheritances

    Why is My Stepmother Getting All the Money? The Preferential Treatment of Spouses in Inheritances

    “I know my father wanted to leave me something after he died. 

    Why does my stepmother get everything?”

    It is not uncommon for a lawyer to meet with a new or potential client who raises this issue, especially in the context of a blended family. Why does the law prioritize your parent’s spouse (who is not your parent) over you, the deceased’s own child?

    There is a public policy reason behind this: the legislature seeks to provide for the financially dependent widow or widower who relied on their late spouse for support. The law is also slow to evolve; in a “traditional” nuclear family, children are often shared by the couple and likely to inherit under the surviving spouse’s estate. The law may also view an adult child of the deceased as more capable of caring for themselves than an aging surviving spouse. For whatever reason, protections for spouses in estate matters remain in place through the preferential share given to spouses under intestacy and the election under the Family Law Act (FLA), as set out below.

    (1)     The Preferential Share Under Intestacy

    If someone dies without a Will in Ontario, then their estate goes out on intestacy. As part of this legislative scheme, the deceased’s spouse is entitled to a preferential share of the estate.

    As prescribed by regulation, the “preferential share” of an estate in Ontario increased in 2021 to $350,000. However, if the deceased died prior to March 1, 2021, then the preferential share is only $200,000.[1] The preferential share is given to all legally married spouses, regardless of the length of the marriage.

    Here’s how it works: if an estate’s net value is less than $350,000, then the entirety of the estate will go to the deceased’s spouse, regardless of any children that the deceased may have.[2] If the net value is more than $350,000, then the deceased’s spouse will get the first $350,000, or the preferential share, of the estate.[3]

    The “net value” of an estate means the value of an estate after the debts, funeral expenses, and expenses related to estate administration are paid.[4] The net value also includes the proceeds of any insurance policies payable to the estate, such as mortgage insurance.[5]

    Assets remaining in the estate after the payment of the debts and preferential share are called the residue. If the deceased has a spouse and no children, then the entirety of the residue will go to their spouse. If the deceased has a spouse and one child, then the spouse and the child are each entitled to one-half of the residue. If the deceased has two or more children, then the spouse is entitled to one-third of the residue and the remaining two-thirds are divided equally among the deceased’s children.[6] All children of the deceased, whether shared with the spouse or not, are entitled to inherit under intestacy. If the deceased has no spouse or children, then their estate will go to their nearest relative, as described in section 47 of the Succession Law Reform Act (SLRA).[7]

    Separated and Cohabiting Spouses Excluded

    The preferential share is only available to those who qualify as “spouses” under the SLRA. This definition is limited to married spouses and excludes cohabiting spouses, regardless of how long a couple has been together.[8]

    In January 2022, the SLRA was also amended to exclude spouses who are separated from the deceased at their time of death.[9] A spouse will be considered separated from the deceased person for the purposes of the SLRA if:

    1.  before the deceased’s death,
      1.  they lived separate and apart due to the breakdown of their marriage for a period of three years immediately prior to the deceased’s death;
      2.  they entered into a valid separation agreement under Part IV of the Family Law Act;
      3.  the court made an order on their rights and obligations following the breakdown of their marriage; or
      4.  a family arbitration award was made under the Arbitration Act, 1991 with respect to their rights and obligations following the breakdown of their marriage; and
    2.  at the time of the deceased’s death, they were living separately and apart as a result of the breakdown of their marriage.[10]

    As such, only a spouse who is legally married, and not separated, to the deceased at their time of death is entitled to claim a preferential share from their estate upon intestacy.

    What if the Deceased was Only Partially Intestate?

    If a deceased’s Will did not deal with the entirety of their property, then they are said to have died partially intestate.[11] Under partial intestacy, the deceased’s spouse remains entitled to a preferential share of the estate. Where they were entitled to nothing under the Will, or less than the preferential share, then they are entitled to the remaining amount of their preferential share from the intestate property. For example, if a spouse receives $100,000 under the Will and the estate has $300,000 in intestate property, then the spouse would be entitled to $250,000 of the intestate property to make up their $350,000 preferential share.

    In contrast, if the spouse is entitled to more than the preferential share under the Will, then they will not receive any preferential share of the intestate property, which will go out under the normal rules of intestacy.

    (2)     Election for Equalization

    Under the FLA, upon someone’s death, their surviving spouse has the option to choose between taking their share under the Will or under intestacy and opting for equalization of net family property (“NFP”).[12]

    NFP includes the value of all the property that a spouse owns at the date of their death, excluding their debts and liabilities, and property, besides the matrimonial home, owned by a spouse at the date of marriage.[13] In the equalization of NFP, the spouse whose NFP is lower is entitled to one-half of the difference between their NFP and their spouse’s.[14] This equalization only goes one way when it is triggered by one of the spouse’s death; an estate cannot opt for equalization against a surviving spouse.[15]

    However, if a spouse elects for equalization, then they lose any gifts they were entitled to under their former spouse’s Will.[16] In addition, proceeds of any life insurance policy, pension fund, or property inherited through the right of survivorship will be credited against the surviving spouse’s entitlement to equalization.[17]

    In general, once an election is made, it cannot be revoked and the surviving spouse forfeits their right to challenge the Will.[18] However, courts can exercise their residual jurisdiction to revoke an election where it is required by the interests of justice. In Iasenza v Iasenza Estate,[19] the court set aside an election where the widow opted for election under the mistaken belief that she would receive more of her husband’s estate than the one-third granted to her under his Will; however, her equalization payment ended up being nothing. The Court set out the following factors to consider in their analysis:

    1.  Was the election filed as a result of a material mistake of fact or law made in good faith?
    2.  Was there any responsibility or culpability on the part of effected parties in relation to the election?
    3.  Was the notice of intent to seek revocation of the election given in a timely way and, in particular, how long after the six-month filing period was such notice given?
    4.  Has the estate been distributed or would interested parties otherwise be adversely effected by a revocation of the election?
    5.  Does the election result in an injustice to the surviving spouse in all of the circumstances?[20]

    Here, the applicant misunderstood what assets formed the estate and her counsel was unable to obtain the material information from the respondents. Moreover, the court held that an election under the FLA would likely be void ab initio in circumstances where the deceased’s share of NFP does not exceed the surviving spouse’s share.[21]

    As with the preferential share, the election for equalization is only available to spouses who are legally married at the time of the late spouse’s death. This means that there are significantly fewer legislative protections for cohabiting spouses, outside of dependant support claims under Part V of the SLRA.

    What Can You Do?

    The SLRA and FLA demonstrate that the Ontario legislature favours a person’s spouse over their child when it comes to inheritance. Parents looking to leave an inheritance for their children can consider the following in their estate planning:

    • Make a Will. One of the best ways to ensure that your beneficiaries are provided for after your death is to lay out your intentions in your Will. Your Will can include specific bequests to your spouse and children.
    • Create a Trust. Another option is to place your assets in a trust for your spouse’s use, with the remainder of your assets going to your children after your spouse’s death. With a trust, you can implement conditions on how much your spouse can get from the trust at any given time. It also prevents your spouse from leaving your assets in their Will to someone else.
    • Make Your Children Beneficiaries of Policies. Another way of providing for your children is naming them as beneficiaries of life insurance policies and retirement funds. As these assets pass outside of your estate, your spouse would not be able to access them.
    • Add Your Child’s Name to the Deed. If you want to leave real property to your children after your death, you can add them to the deed as a registered owner in joint tenancy. Joint tenancy carries the right of survivorship. This means that when you die, the asset will pass directly to them without going through your estate.

    Contact the Toronto Estate Lawyers at Derfel Estate Law

    There are several things to consider when estate planning and preparing your Will. While it may be tempting to save costs by creating a Will without the assistance of a professional, the consequences can be serious for both your beneficiaries and estate. To learn how we can assist you with your estate planning or the administration of your estate, call our office at 416-847-3850 or contact us online.

    This blog was co-authored by David Derfel and law student, Leslie Haddock.

    [1] See O Reg 54/95, s 1.

    [2] Succession Law Reform Act, RSO 1990, c S26, s 45(1) [SLRA].

    [3] Ibid, s 45(2).

    [4] Ibid, s 45(4).

    [5] Re Estate of Richard Lewis Crane, 2016 ONSC 291 at para 23.

    [6] SLRA, supra note 2, ss 46(1)-(2).

    [7] Ibid, s 47.

    [8] Ibid, s 1(1).

    [9] Ibid, s 43.1(1).

    [10] Ibid, s 43.1(2).

    [11] Ibid, ss 45(3).

    [12] Family Law Act, RSO 1990, c F3, s 6.

    [13] Ibid, s 4(1).

    [14] Ibid, s 5(1).

    [15] Ibid, s 5(2).

    [16] Ibid, s 6(5).

    [17] Ibid, ss 6(6)-(7).

    [18] Bolfan Estate, Re, 1992 CanLII 8634 (ON SC).

    [19] 2007 CanLII 23351 (ON SC).

    [20] Ibid at para 25.

    [21] Ibid at para 29.

  • Beneficiary Forced to Pay Legal Costs of Estate Trustee During Litigation out of Inheritance

    Beneficiary Forced to Pay Legal Costs of Estate Trustee During Litigation out of Inheritance

    Naming an estate trustee during litigation (“ETDL”) is meant to reduce conflict and streamline the administration of an estate. However, problems can arise when a former estate trustee (and beneficiary) continues to cause conflict and frustrate the efforts of the ETDL. This was the case in the recent Ontario Superior Court decision Estate of Georgia Manos, deceased, 2023 ONSC 1962 (“Manos”) from Justice Gilmore.

    Background of the Case

    This case concerned an application to pass accounts by the ETDL and a notice of objection filed by beneficiary and former estate trustee, James Manos (“James”).

    The testator, Georgia Manos, died on April 10, 2012 and appointed her sons, James and Nicholas, as co-estate trustees. Following several proceedings between the estate trustees, Doug Lewis, a qualified accountant and lawyer, was appointed as ETDL for the estate on October 31, 2018.

    After being appointed, Mr. Lewis took steps to liquidate the remaining assets of the estate, including the testator’s property in Florida and the testator’s shares in PZ Cussons PLC, a company in the UK. Throughout this process, James repeatedly objected to and frustrated Mr. Lewis’ efforts. In an affidavit, Mr. Lewis described his appointment as the most difficult he had encountered in years and remarked that he would never have accepted the role if he had known about James’ conduct.[1] On December 2020, James brought an application to remove Mr. Lewis as ETDL. In an effort to respond to James’ concerns, Mr. Lewis brought a motion to pass the accounts for the estate.

    The following issues were disputed in this case:

    • How Much Compensation Should Mr. Lewis Receive for Acting as ETDL?

    Mr. Lewis sought $70,670.71 in compensation for acting as ETDL. Justice Gilmore agreed with Mr. Lewis’ proposed compensation.

    Subsection 61(1) of the Trustee Act asserts that a trustee “is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and abut the estate.” Subsection 61(3) of the Trustee Act allows a judge to award such compensation in passing the accounts of a trustee.

    In determining how much compensation to award, courts look to the following five factors:

    1. The total value of the estate;
    2. The care and responsibility involved in the estate’s administration;
    3. The time spent by the trustee in administering the estate;
    4. The skill and ability demonstrated by the trustee; and
    5. The success of the administration.[2]

    Applying these factors, Justice Gilmore held that Mr. Lewis was entitled to the amount he sought:

    1. This was not a modest estate; the approximate value was over $1.9 million.
    2. This was not a simple estate and involved the sale of property in foreign jurisdictions.
    3. Although Mr. Lewis did engage foreign professionals, this did not mean his recorded hours were excessive. His use of outside professionals was reasonable given that he lacked the authority to undertake transactions in the US and UK.
    4. Mr. Lewis demonstrated skill and ability in his administration of the estate. By liquidating the main assets of the estate, Mr. Lewis accomplished more in three years than the previous estate trustees accomplished in five, despite the toxic environment he had to operate  in.
    5. James claimed that the administration was not successful because significant interest was charged on the sale of the UK shares due to the delay selling the shares following the testator’s death. The Court rejected this assertion; there was no evidence that the original estate trustees took any steps to sell the shares in the five years following the testator’s death.

    Justice Gilmore was also critical of James’ conduct in the proceedings:

    James could have compelled a Passing of Accounts in 2019 and avoided a significant amount of the costs in issue in this matter. Instead, the matter apparently became a personal mission to grind down the ETDL. James’ proposed reduction in compensation by 25-30 percent is unwarranted and without foundation based on the test in Laing Estate and the facts found by this Court.[3]

    • Should Mr. Lewis Be Fully Indemnified for the Legal Fees He Incurred in Defending Against James’ Objections?

    Mr. Lewis also claimed $60,000 for legal fees on a full indemnity scale which he incurred defending himself against James’ objections. Again, Justice Gilmore agreed with Mr. Lewis’ position.

    Generally, estate trustees are entitled to be fully indemnified for reasonably incurred expenses, including the legal costs of an action reasonably defended.[4] Neuberger Estate v York also introduced the concept of “blended cost awards”, in which part of the costs are payable by the losing party and the remainder are paid by the estate. These awards are available at the court’s discretion if one or more of the following public policy considerations are engaged: “(1) where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and (2) the need to ensure that estates are properly administered.”[5]

    Blended costs were awarded in the Divisional Court case, In the Estate of Stefanie Aber, deceased. In Manos, the litigation was not precipitated by the  testator’s actions.  The Court found that the Applicant was responsible for a portion of the costs as the losing party. However, the Applicant was entitled to request a Passing of Accounts and his conduct was not scandalous, reprehensible, or outrageous, and the litigation was not frivolous, therefore blended costs were appropriate. The Applicant was responsible for Mr. Lewis’ legal costs on a partial indemnity basis (approximately 60% of actual legal fees) with the remainder to be paid out of the funds of the estate.[6]

    Justice Gilmore rejected James’ argument that the costs of the litigation and his objections should be shared by all the beneficiaries. The other beneficiaries had nothing to do with the majority of the motions and objections brought by James and did not interfere with the sale of the Florida property as James had. Justice Gilmore held that “James must bear some responsibility for [his] irresponsible approach. The other beneficiaries should not be burdened with all of the costs in relation to what unfolded and which they were powerless to stop.”[7]

    However, per the approach in Aber Estate, James took a misguided approach to the litigation, but did not take a “scandalous or egregious position.”[8] Justice Gilmore held that a blended cost award was appropriate; James would be responsible for 60% of the legal costs from his share of the estate, while the remaining 40% would be payable from the estate in general.[9]

    Conclusion

    This case establishes that the compensation earned, and legal fees incurred by an ETDL while acting in their role, can be fully paid by the Estate, even in the face of strong objections from the beneficiaries.

    This case also has important implications for beneficiaries of an estate managed by an ETDL. One’s conduct does not have to meet the threshold of malicious, scandalous, or egregious to attract an adverse costs award. Even frivolous or misguided objections and actions against an ETDL can result in an adverse costs award, albeit one that is shared from the funds in the estate.  It is important to note that legal fees and expenses paid out by an estate ultimately hurt the beneficiaries; a testator does not leave funds for lawyers, a testator leaves funds for the beneficiaries.  Beneficiaries should be mindful of this when contemplating any type of litigation related to an estate.    

    Contact Derfel Estate Law for Estate Administration and Trustee Disputes

    At Derfel Estate Law, our estate litigation lawyers work with clients in all aspects of estate disputes, including trustee and executor issues and passing of accounts. We provide personalized assistance to beneficiaries, guardians, executors, trustees, and any other party involved in estate matters. If you are wondering how we can help you, please don’t hesitate to reach out online or call 416-847-3580 to speak with an estate lawyer who will work tirelessly to resolve your dispute.

    This blog was co-authored by David Derfel and law student, Leslie Haddock.

    [1] Estate of Georgia Manos, deceased, 2023 ONSC 1962 at para 35 [Manos Estate].

    [2] Toronto General Trust Corp v Central Ontario Railway (1905), 6 OWR 350 (HC) and endorsed by Laing v Hines, 1998 CanLII 6867 (ON CA).

    [3] Manos Estate, supra note 1 at para 101.

    [4] Brown v Rigsby, 2016 ONCA 521 at paras 11 and 14.

    [5] Neuberger Estate v York, 2016 ONCA 303 at paras 24-25.

    [6] In the Estate of Stefanie Aber, deceased, 2015 ONSC 5123 at paras 68-70.

    [7] Manos Estate, supra note 1 at para 114.

    [8] Ibid at para 115.

    [9] Ibid.

  • I Want My Daughter to Be Independent and Self-Sufficient – Can I Cut Her Out of My Will?

    I Want My Daughter to Be Independent and Self-Sufficient – Can I Cut Her Out of My Will?

    So you’re thinking about disinheriting your child. Contrary to what you and others might think, this does not make you a bad parent. Unlike in forced heirship regimes, children in Ontario have no legal right to inherit anything from their parents’ estates. You may disagree with their lifestyle, politics, finances, or simply desire to see them make their own way in the world without depending on you for support. Your testamentary freedom grants you the right to dispose of your estate however you choose. However, this right remains subject to various limitations from the courts and legislatures which might impact your ability to choose your beneficiaries. Here are several things you should keep in mind when considering whether to disinherit your child.

    Dependant Support Provisions

    A major limitation to testamentary freedom are dependant support provisions, which allow courts to interfere with your Will if you have not adequately provided for your dependants.

    Under section 58(1) of Ontario’s Succession Law Reform Act (SLRA), if a deceased has not made adequate provisions for the proper support of their dependants, the court can order that adequate provisions be paid out of the estate. Section 57(1) of the SLRAdefines a “dependant” as:

    (a) the spouse of the deceased,

    (b) a parent of the deceased,

    (c) a child of the deceased, or

    (d) a brother or sister of the deceased,

    to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.

    A “child” under the SLRAincludes a grandchild and “a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family.” This means that a “child” could include biological children, adopted children, and even stepchildren, in some circumstances.

    As such, per the SLRA, you cannot effectively disinherit any minor children, children you were supporting, or children you were legally obligated to support. If you fail to adequately provide for them, then your estate could be subject to a dependant support claim. But what about adult children who are not financially dependent on you?

    Adult Children

    Whether you can disinherit your adult child is more complicated. It is also highly dependent on what jurisdiction you live in as different provinces have different rules.

    While all provinces recognize support claims based on financial need, the Supreme Court of Canada also recognized the validity of moral claims which a child might have to their parents’ estate.[1] These principles were accepted to apply in Ontario in Cummings v Cummingsas factors to be considered when determining the amount and duration of support under section 62(1) of the SLRA.[2]However, there is no moral obligation in Ontario to include your child in your Will.[3]

    In Ontario, the definition of “dependants” is limited by financial need and courts can only consider moral obligations when determining how much support to award. There is no statutory entitlement for adult children to seek dependant support against their parent’s estate in Ontario.[4] In contrast, in British Columbia, courts can interfere and order support that is “adequate, just and equitable in the circumstances” for the testator’s spouse and children of any age.[5] This leaves Wills in British Columbia significantly more vulnerable to challenges from disappointed children. For instance, in Pascuzzi v Pascuzzi, the court found that the testator had a moral obligation to provide for his 32-year old daughter and awarded her 30% of his $1.8 million estate.[6]

    In practice, disinheriting your non-dependent adult child in Ontario has rarely, if ever, been interfered with by courts, as discussed in a previous blog. Courts have even upheld Wills which excluded children for discriminatory reasons. In Spence v BMO Trust Company[7], a father excluded his daughter from his Will after she had a child with a man of a different race. The Court found no discrimination on the Will itself and was unable to admit outside evidence of the testator’s discrimination. The court noted that:

    Absent valid legislative provision to the contrary, the common law principle of testamentary freedom thus protects a testator’s right to unconditionally dispose of her property and to choose her beneficiaries as she wishes, even on discriminatory grounds.[8]

    As adult children are not able to make a claim for support against their parent’s estate in Ontario, the next step for disinherited children would be to challenge the validity of the Will itself.

    What Can I Do To Prevent My Will from Being Challenged?

    Although applicants must meet a minimum evidentiary threshold to successfully launch a Will challenge, there are several things you can do to help prevent a Will challenge or decrease the likelihood of its success:

    • Document your reasons for excluding your child. This will show that the exclusion of your child is a reflection of your testamentary intentions and not a result of external influences or incapacity.
    • Ensure that your Will is properly executed and meets the formal requirements in Ontario. A Will must be in writing, signed by the testator (or someone else at the testator’s direction), and signed by two witnesses.
    • Document your mental capacity when making your Will. There are several ways you can do this.
      • You should make a Will with an experienced and reputable estate lawyer. They will ask questions to gauge your mental capacity and whether you are making decisions free from influence. They can also take notes during consultations, which can be used as evidence of your capacity.
      • Get a capacity assessment. Ontario’s Capacity Assessment Office provides training and certification to capacity assessors, who can conduct a capacity assessment and show that you have the requisite testamentary capacity.
    • Meet with your lawyer alone. If you come to the consultation with your child or another beneficiary under the Will, this could lead to challenges based on undue influence. When you are concerned that your Will may be contested, it is best to avoid even the appearance of impropriety.
    • Update your Will. By updating your Will and continuing to exclude your child, you will show that the decision to not include them was not made on a whim and remains a true reflection of your testamentary intentions.
    • Be honest with your child. While you may want to avoid an unpleasant and awkward conversation, it is best to be open about your plans to your children. Some children commence a Will challenge simply because they were surprised by their exclusion and did not understand their parent’s decision. This ensures that your child is not financially planning around an inheritance they will not receive and is not blind-sided by the news after your passing.

    Derfel Estate Law in Toronto Represents Clients in Contentious Estate Litigation or Estate Planning Matters

    These issues demonstrate the importance of consulting with a lawyer when preparing your Will. While it may be tempting to save costs by creating a Will without the assistance of a professional, it can result in serious consequences for your beneficiaries and estate.

    The experienced estate lawyers at Derfel Estate Law in Toronto act on behalf of executors to defend various estate litigation matters, including Will challenges and capacity concerns. To learn how we can assist you with estate planning or your estate litigation dispute, call our office at 416-847-3850 or contact us online.

    This blog was co-authored by Law Student, Leslie Haddock.

    [1] Tataryn v Tataryn Estate, 1994 CanLII 51 (SCC), [1994] 2 SCR 807.

    [2] Cummings v Cummings, 2004 CanLII 9339 (ON CA), [2004] CarswellOnt 99 at paras 40and 46.

    [3] For example, see Stewart v Stewart, 2021 ONSC 1222 at paras 125-127.

    [4] For example, see Shafman v Shafman, 2023 ONSC 1391 at para 1.

    [5] Wills, Estates and Succession Act, [SBC 2009] ch 13, s 60.

    [6] Pascuzzi v Pascuzzi, 2022 BCSC 907, aff’d 2023 BCCA 131.

    [7] Spence v BMO Trust Company, 2016 ONCA 196.

    [8] Ibidat para 75.

  • What Happens to One Party’s Inheritance When a Couple Separates?

    What Happens to One Party’s Inheritance When a Couple Separates?

    What happens to one party’s inheritance when a couple separates? The answer depends on how the inheritance entered the relationship, and how it was spent, if at all. If one spouse receives an inheritance during the marriage and retains it, it will most often be excluded from the division of property upon separation.

    In the case of O’Connor v. O’Conner, the Ontario Superior Court of Justice provides us with further insight into how the courts might approach such situations. This decision highlights the importance of not only having an estate plan, but also, things to consider when a party to a relationship receives a large sum of money.

    Wife receives inheritance from late aunt

    The parties were married in 1986 and separated in 2015. The parties had two children together, both of whom were adults and were living with the mother in the matrimonial home after the separation. The wife was 58 years old and unemployed at the time of the trial. Her only form of income was Canada Pension Plan disability benefits while she underwent cancer treatment. In 2021, the wife’s income tax return listed her annual income as $24,000.

    The husband had worked a variety of jobs and had a red seal certificate. After being terminated by his employer, he opened a sheet metal business with two business partners.

    Following the separation, the husband claimed that the wife owed him an equalization payment totaling ,132, which includes a portion of the wife’s inheritance from her late aunt’s estate. The wife sought confirmation from the Court that her inheritance money would remain her property, exempt from division.

    Husband says he should get a cut of the inheritance, but the wife says it belongs to her

    The husband relied on a 2013 case where the court held that funds which were received by one party as an inheritance, but were co-mingled with family funds, voided the inheritance from being excluded from a division of family property.

    In the O’Connor case, the children also received smaller sums of money from the wife’s late aunt. The husband stated that the combined inheritances were placed into a joint account and were used for expenses beyond savings or for the benefit of the children. The husband went on to say that the wife’s funds were deposited into a $USD bank account that was held in joint names of the husband and wife.

    Argument over whether inheritance should be included in equalization payment

    The wife agreed that she owed the husband an equalization payment, but argued that he was only entitled to $48,969, which excluded the inheritance. The wife relied on the traditional rule that inheritance funds are generally excluded from family property asset division.

    The wife responded to the father’s evidence that her share of the inheritance was placed into a joint account, and stated that this was only done with the intent of ensuring the right of survivorship to the funds in the event of her death. As for the intermingling of funds, the wife stated that her money was kept separate from the rest of the family funds with the single exception of using some of the money to help pay for a family trip to Disney World.

    How is inheritance division determined?

    The Court confirmed that the starting point in determining this issue was section 4(2) of the Family Law Act, which states that:

    “The value of the following property that a spouse owns on the valuation date does not form part of the spouse’s net family property:

    Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage.”

    Despite the wife’s inheritance funds being placed in a joint account, the Court found that this was only for estate planning purposes, as outlined by the wife. The Court went on to detail that while the husband could have managed the funds, he never deposited money into the account, nor did he use funds from it. This wasn’t uncommon for the couple, though, as the Court determined that the wife controlled the family finances. Further, the Court determined that the Disney trip was the only expense to come from the account.

    Court rejects husband’s argument to include inheritance

    Based on the evidence, the Court agreed with the wife’s statement that the only reason the inheritance was placed into a joint account was for estate planning purposes to ensure that the husband would benefit from the right of survivorship if she were to pass away.

    This finding was supported by both the Family Law Act and a 2007 Supreme Court of Canada decision from Pecore v. Pecore which states that when it comes to gratuitous transfers of money between spouses, where the transferee provides no consideration, the onus is on the transferee to demonstrate that the funds were intended to be a gift.

    In this case, the husband received the funds when his name was added on the account, making him the transferee. Since he provided no consideration for the funds, he was required to prove that the money was intended to be a gift, which he failed to do. The Court confirmed that the Disney trip alone does not provide sufficient evidence, as this was a one off event. As a result, the inheritance funds were determined to be the exclusive property of the wife and were not subject to property division.

    Contact the Toronto Estate Planning Lawyers at Derfel Estate Law

    At Derfel Estate Law, our lawyers understand the complexities surrounding inheritances received through the estate administration process. It is important for anyone who receives an inheritance, regardless of how much, to understand how to manage those funds and make decisions which will protect their inheritance from potential issues down the road. Whether you have questions about a recent inheritance, or have questions regarding estate litigation generally, our team can help. To discuss your circumstances with a member of our estate team, please reach out to us online or call us at 416-847-3580.