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Disinheriting Spouse & Double Dipping

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Have you ever wanted to disinherit your spouse? In Makan v. McCawley [1998] O.J. No. 1206 a Mother had enough of her husband. She called her lawyer and instructed him to make sure that all her assets would be inherited only by her children and grandchildren. Mother and her husband owned certain property together as Joint-Tenants. In this type of ownership the one who lives longer automatically becomes the owner of the whole of the property. For the testator’s children and grandchildren to inherit this property, the lawyer had to change the type of ownership to Tenants in Common so that each spouse’s interest could be left to anyone the testator wishes in his or her Will. Since the estranged Husband was the executor and sole beneficiary under the old Will, the Lawyer had to draft a new Will which excluded the spouse and named the new beneficiaries.

Mother died several months after the instructions were given. The lawyer did not have the new Will signed and failed to change the ownership of the property. Under the old Will the estranged husband received the entire estate and the property held in joint tenancy automatically went to him. The children and grandchildren sued the lawyer for negligence, since they received nothing.

The Defendant’s lawyer brought a motion asking the court to dismiss part of the claim. He argued that even if everything in the plaintiffs’ claim was true, they had no legal case against him regarding his failure to change title from joint tenancy to tenancy in common. He suggested that had the property been owned as Tenants in Common, it was the Estate that would have received the property. Accordingly, it was unfair for the lawyer to be liable to both the disappointed beneficiary and to the Estate for the same loss. In other words- No double dipping. If he were right, then the children and grandchildren had no standing to sue him for failure to change the type of ownership from joint tenancy to tenancy in common.

In this motion the Court did not have to decide if the lawyer was negligent. The Judge only had to determine whether the intended beneficiaries had a chance to win at trial. If they did, the court case would continue. In making this decision he decided that the legal obligation to promptly implement Mother’s wishes regarding the property was also owed to the children and grandchildren. Justice Lax, of the Ontario Court of Justice pointed out that the testator only cared about the nature of how she owned her property because it made a difference to other people after her death. Since only the beneficiaries would suffer the loss, it was their right to sue. Furthermore, the court recognized the reality that the estranged husband would not commence proceedings on behalf of his wife’s estate against her solicitors for breaches of duty since he had everything to lose and nothing to gain. Finally, the Judge clarified that by permitting the action to proceed to trial, “… the trial judge will be afforded the opportunity to examine the substantive and remedial issues which arise in claims of this kind on the basis of a full factual record, which I do not have.”

This area of the law can be very complicated. Despite the temptation to jump to conclusions, it would be a mistake to substitute this case review for substantive legal advice. For those considering this option, there is no replacement for hiring a competent solicitor whose own research, analysis and judgment should be canvassed prior to going to court.

Charles Wagner

The author of this blog is Charles B. Wagner. Charles is a Certified Specialist in Estates and Trusts and partner at Wagner Sidlofsky LLP.

This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

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