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Second Marriages and Risks to the Estate

Note: This blog was updated by Adin Wagner on December 17, 2021. It was originally published on December 17, 2010.

Joseph was 60 years old when lost his wife to cancer. Online he met an Israeli called Rebecca, a 40 year old widow. They emailed each other, grew to care for one another, and decided to marry. Rebecca and her children moved into Joseph’s home. Joseph’s adult children from his first marriage feared that Rebecca and her children were going to take away their inheritance. Joseph assured his children that Rebecca signed an agreement under which she gave up all her claims under the Family Law Act and could not claim support against his estate when Joseph died. Joseph assured them that he left his children all of his money. Should the children have relaxed? Maybe – Maybe not.

Revocation by marriage

Unless Joseph made a new will after he remarried or in contemplation of marriage, the status of Joseph’s old will will depend on the date of the marriage. If Joseph and Rebecca married prior to January 1, 2022, Joseph’s old will was revoked by his marriage to Rebecca via s. 15(a) of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (SLRA).  By virtue of the laws of intestacy, despite the contract, Rebecca would receive a preferential share (the first $350,000.00) and a distributive share (1/3) of the balance.1

But on January 1, 2022, certain changes to the SLRA come into effect, one of which is the repeal of s. 15(a). Marriages which occur after that date no longer revoke a will in Ontario. Therefore, Joseph would not die intestate and his will would continue to dictate the distribution of his estate.

Family Law Act Considerations

So let’s assume Joseph makes a new will following his marriage or the marriage occurred after January 1, 2022. Can his children rely on the fact that their father had Rebecca sign a domestic contract? Rebecca’s lawyer may argue that Joseph failed to disclose significant assets when the domestic contract was signed. Furthermore, her lawyer may argue that Rebecca’s English was minimal and she did not have independent legal advice so there is no way she understood the nature and consequences of signing this contract. Accordingly, the contract may be set aside and Rebecca could exercise her right under section 6 of Ontario’s Family Law Act. That would entitle Rebecca to receive an equal division of net family property under section 5 of the legislation.

Succession Law Reform Act Issues

Now let’s imagine that at Joseph’s insistence Rebecca hires a lawyer who speaks Hebrew so she cannot later claim she did not understand the contract. Joseph’s lawyer makes full and frank disclosure of all of his assets in the agreement. Can the children now relax? Unfortunately – the answer is not yet. Under the legislation a domestic contract is only one factor the court has to take into account and the court has the discretion to ignore the contract.2 For example, in Butts Estate v Butts3 a husband and wife signed a separation agreement providing for $500 per month support. No one disputed that this was to be a final agreement. Despite the fact that there was a contract where both parties fully understood the terms of that agreement the court decided that the support provided was insufficient and increased the support payments to be paid by the estate to the separated wife by $1000 per month.

There is a very old joke that death is not the end – it is the beginning of estate litigation. While the scenario outlined above is fictional it nonetheless reflects a growing trend. People often feel they were treated unfairly and go to court despite signing a contract where they agreed not to make any claim. Based on my experience in dealing with these cases, and what should be evident from this review. Each situation’s facts may make a world of difference to how a court might view a case. Whether a party is seeking to get married or there is a dispute after death there is no replacement for seeking out the advice of a competent experienced lawyer who knows how to protect your interests.

Footnotes
  1.  A spouse’s preferential share of the estate in an intestacy is $350,000 pursuant to section 45 of the SLRA. As per the newly implemented O. Reg. 54/95, $350,000 is the prescribed amount for the preferential share of the estate of anyone who dies on or after March 1, 2021. For the estates of those who die before March 1, 2021, the prescribed amount for the preferential share will still be $200,000.
     
  2.   See Part V of the Succession Law Reform Act, R.S.O. 1990, c. S.26 and in particular section 62(1)(m) which lists the factors taken into account. By virtue of an “agreement” being only one factor the courts have made awards of support even though there was a domestic contract. As well, section 63(4) provides that an order under this section may be made despite any agreement or waiver to the contrary.
     
  3.   Butts Estate v Butts (1999), 27 E.T.R. (2d) 81 (Ont.GenDiv.)   For an excellent review on this topic see Archie Rabinowitz’s article  Dependant’s Support Applications – The Statute that Continues to “Speak”
     
Toronto Estate Litigator - 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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This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.
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