All About Estates

Moving to another Province? Update your Estate Plans

It is common for Canadians to move from one province to another. As part of such a relocation, financial planning and personal relationships are among two aspects of life that often change or evolve. The law applicable to a particular matter may also change depending on the province. The jurisdiction of the applicable law governing pension plan funds was at issue in Rehel Estate v Methot.

The deceased died in April 2015. At the time, he was married to but separated from the respondent Sharon.  Sharon and the deceased married in Quebec in 2005 and moved to Ontario in 2008.

In 2013, the deceased opened a Life Income Fund account and funded the account with the proceeds of his Quebec pension plan he had converted earlier.  The application to open the account noted: “Pension governed by the laws of Quebec.” The deceased designated Sharon as the beneficiary.  Approximately two years later, the deceased and Sharon separated.

In 2015 (two days before he died), the deceased executed his will and directed that the funds in his LIF account be used to pay his debts. The estate trustee applied to the court to clarify, among other things, whether Sharon is automatically entitled to the LIF account funds as the surviving spouse or whether the funds were to pay the estate debts pursuant to the deceased’s will.

The estate trustee submitted that Sharon was not automatically or otherwise entitled to the LIF account funds, regardless of which jurisdiction governed, as Sharon and the deceased were separated at the time of the deceased’s death.  Sharon argued that Quebec law governed the LIF account funds.  Moreover, she submitted that she was not legally separated from the deceased and thus automatically entitled to the LIF account funds.

Based on the estate trustee’s evidence (which included correspondence between Sharon and the deceased), the court found that Sharon and the deceased were “beyond any doubt” separated at the time of his death.  The court then had to determine whether Sharon was still automatically entitled to the LIF account funds.

Pensions are governed by provincial legislation (in Ontario, by the Ontario Pension Benefits Act).  Pursuant to section 48 of the Ontario act, the spouse of a plan member at the time of the plan member’s death is entitled to the deferred pension plan proceeds, so long as the plan member and that spouse were not “living separate and apart” at the time of death. This is regardless of who is designated as the beneficiary of the pension plan.  The estate trustee submitted evidence that, under Quebec law , a spouse’s automatic right to pension plan proceeds is also terminated by “separation from bed and board.”

Sharon responded that “separation from bed and board” under the Quebec act had a different meaning than “living separate and apart” under the Ontario act as spouses in Quebec need a court decision to legally separate. However, she provided no evidence to support her submissions.

The court explained that the law of another province is foreign law, which must be proved. If foreign law is not proved, the court assumes that it is the same as Ontario law.  While the court made no determination as to the applicable law, it held that there was no evidence that the definition of “separation from bed and board” was different than “living separate and apart”. As the court had earlier found that Sharon and the deceased were separated at the time of the deceased’s death, the court concluded that Sharon was not automatically entitled to the LIF account funds regardless of the applicable law. The court further held that the deceased revoked his earlier designation of Sharon as the beneficiary of the LIF account funds by designating in his will that the funds were to be paid to his estate trustee to satisfy the estate’s debts.

It is important to remember that moving to a different province entails a slew of changes, including applicable law to financial and personal affairs. Pension plans and succession laws are two examples of matters that may be affected by a relocation to another jurisdiction. Legal advice should be sought as to how the law varies in respect of such issues from province to province.

 

About Anna Alizadeh
Anna was called to the Ontario Bar in June 2016. Prior to joining de VRIES LITIGATION LLP, she articled at a full service firm where she developed a strong background in litigation and alternative dispute resolution. Anna also worked on estate litigation files and estate planning matters, and co-authored a chapter on Physician Assisted Dying for Key Developments in Estates and Trusts Law in Ontario, 2015-2016 edition. She obtained her Honours Bachelor of Science in Psychology, with a minor in Biology, from York University, and her Juris Doctor from the University of Ottawa. While in law school, Anna participated in an exchange program in Paris, France, where she obtained her Certificate in French and European Union Law. Anna practices in the areas of estates, trusts and capacity litigation. She is fluent in Farsi and has a professional working proficiency in French. Email: AAlizadeh@devrieslitigation.com

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