Joseph was 60 years old when he lost his wife to cancer. Online, he met an Israeli named 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. The adult children from Joseph’s 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 If Joseph and Rebecca married prior to January 1, 2022, Joseph’s old will was revoked by his marriage to Rebecca via s. 15(a) of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (SLRA).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)1 and a distributive share (1/3) of the balance.
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 Rebecca’s mother tongue 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 Ontario law, such an agreement is only one factor the court has to take into account and the court has the discretion to ignore the contract. For example, in Butts Estate v Butts, 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 to $1,000 per month.
There is a tension between respecting aging parents’ autonomy and protecting them as the parents become more vulnerable. Children can certainly influence the process by suggesting their parents consult competent professionals to advise their parents on the family law and estate law implications of their decisions. But, no matter what precautions, legal agreements or plans are put in place, legal and financial responsibilities flow from marriage. There is also little that can be done if an elderly person with capacity acts contrary to their and their children’s financial interests.
There is always a risk that some rogue will victimize the vulnerable elderly person. Bill 245’s change to the SLRA is just one step taken to protect the elderly from financial predators. It is up to the family of the elderly to be vigilant, consult competent professionals and examine what other options are available.
- 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 ↵