Testamentary freedom has limits when you plan on disinheriting a child.
The idea that people are entitled to choose how they want their assets distributed after they die has deep roots in English common law, and has become entrenched in the minds of many people — even if it fails to tell the whole story, said Matthew Urback, a partner with Shibley Righton LLP.
“The theory is that you can give what you want to who you want, but practically speaking, it’s not always the case,” he said. “If you intend on withholding a gift from someone who would expect to be a beneficiary, then you need to be cognizant of the laws in your particular province.”
While most common-law jurisdictions embrace some form of testamentary freedom, Urback explained that courts can generally step in when inadequate provisions have been made for the deceased’s dependants. (Quebec, as a civil-law jurisdiction, has forced heirship laws.)
Nuances in provinces’ legislative and judicial approaches to who is considered a dependant help explain the relative strength and weakness of testamentary freedom, which varies widely across the country, he added.
At one extreme, Ontarians can have the most confidence that a decision to treat their children unequally will withstand judicial scrutiny, thanks to a test for dependant support that is underpinned by financial need — largely limiting claimants to the spouse and minor children of the deceased, and adult children if they were financially dependent on the deceased.
Ontario judges are also empowered to void wills that offend public policy, but it was the Court of Appeal’s landmark decision not to intervene in the case of Spence v BMO Trust Company that reinforced the strength of testamentary freedom in the province, said Marly Peikes, a partner with O’Sullivan Estates Lawyers LLP in Toronto.
The Appeal Court found a lower court judge was wrong to consider evidence suggesting the father had written his daughter out of the will because she had a child with a man of a difference race. Even if the father had disinherited her on discriminatory grounds, the principle of testamentary freedom “protects a testator’s right to unconditionally dispose of her property and to choose her beneficiaries as she wishes,” the 2016 decision reads.
The uncompromising nature of the ruling in Spence makes the job of Ontario-based estate planners more straightforward, but Peikes said she understands why the decision made many practitioners queasy.
“When you get into public policy questions, it gets messy,” she said. “But I’m not sure it’s the court’s role to go digging through the layers of a person’s decision to disinherit a child.”
At the other end of the scale, testamentary freedom is widely regarded as less robust in B.C., thanks to section 60 the province’s Wills, Estates, and Succession Act, which grants judges broad authority to alter the division of an estate based on the testator’s legal and moral obligations to a short-changed spouse or child.
Because the test is not needs-based, it opens the door to claims from independent adult children, such as in the recent case of Pascuzzi v Pascuzzi, when a B.C. Supreme Court judge ordered 30% of a man’s $1.8-million estate to go to his 32-year-old daughter from a previous relationship that he had left out of his will.
Similar provisions can also be found in laws governing estates in both Newfoundland and Labrador and Nova Scotia. The latter province recently reinforced its position at the B.C. end of the spectrum when its Appeal Court reversed a lower court ruling that appeared to grant Charter protection to testamentary freedom in the case of Nova Scotia (Attorney General) v Lawen Estate.
Testators may dislike that their will may not be the last word on how their estate is distributed, but lawyer Anna Alizadeh said drafting one is always a better option for clients compared with the alternative.
“If there’s no will and they die intestate, then they don’t get any say,” explained Alizadeh, an associate in the wills, trusts and estates practice group with WeirFoulds LLP in Toronto. “The entire estate administration is governed by the law, regardless of what they wanted.”
In Ontario, the province’s Succession Law Reform Act sets out a strict order of priority for the distribution of assets in an intestacy. If the deceased was married, the order begins with the spouse, who gets the first $350,000 in the estate, with the remainder divided between them and any surviving children.
Wherever in Canada they live, testators can reduce the chances of a will challenge by explaining the decisions they have taken, either as part of the will itself or in a memo attached to the document, said Kim Gale, principal with Toronto estate litigation firm Gale Law.
“Maybe one child took care of you while you’re sick, or you’ve already given the other children a lot of money in your lifetime, or you haven’t spoken with someone in 20 years and you’re completely estranged,” Gale said. “It’s not a requirement to give your reasoning for a particular decision, but it can be helpful if you’re straying from the usual course to show that it was a conscious one.”
Brave testators could try to lower expectations by warning snubbed beneficiaries while alive. But they must accept that there are no guarantees when it comes to insulating an estate from a claim, Peikes said.
“At the end of the day, if someone is determined to litigate and has the means, you can’t always avoid it,” she said. “If they’re motivated to go to court, it sometimes doesn’t matter whether or not they have standing or any chance of success.”