In previous blogs I’ve talked about why you should have a Will. Now it’s time to discuss what limitations are imposed on you when leaving your estate. In general, you are free to leave your assets to whomever you want. This is called “freedom of testamentary disposition”. However, for certain policy reasons, the law does impose some restraints on you. To avoid costly disputes after you are gone, it’s important that these legal limitations be addressed.
One limitation is the obligation to ensure your dependants are adequately provided for. If you do not adequately provide for the proper support of your dependants, in accordance with your means, then in all provinces and territories your dependants are entitled to bring an application against your estate for relief. In Ontario this relief is available under Part V of the Succession Law Reform Act (which I will refer to as the “SLRA”). A claim for relief will cost money to defend and, if successful, will impact the terms of your Will.
Under the SLRA a dependant is (i) a person who stands in a certain relationship to you; and (ii) to whom you were actually supporting or were under a legal obligation to provide support at the time of your death. The persons who stand in a certain relationship to you are as follows:
- children regardless of age,
- spouses or former spouses where payments are required to be made pursuant to separation agreements or divorce decrees, or
- parents (including grandparents) or siblings.
Once a person qualifies as a “dependant”, then they may apply to the court for an order for support. The determination as to whether an order for support should be made and the amount to be awarded is wholly within the discretion of the judge. The considerations which are taken into account are:
- the dependant’s present and likely future assets and means and their capacity to contribute to their own support;
- the dependant’s age, physical and mental health;
- the dependant’s needs, having regard to the dependant’s accustomed standard of living;
- the proximity of relationship with you;
- the contributions made by the dependant to your welfare, property, business, career potential;
- your personal circumstances at the time of death;
- any agreements between you and the dependant;
- any other evidence considered necessary or proper, and
- any reason stated by you in writing as to why the dependant was not provided for.
The number of considerations that are weighed by a judge and the inherently discretionary nature of the test for support means that this is an area where it may not always be possible to reach a firm conclusion about whether an obligation will exist or how best to satisfy the obligation. What is a certainty though is that the costs incurred by your estate in defending a claim will most certainly be more than the cost of obtaining advice at the time you prepare your Will.