This blog post was written by Mohena Singh, Associate at Fasken LLP.

When preparing your estate plan, an important distinction must be made between what you direct your trustees to do with your estate assets and what you wish for them to do. In the case of Landry v. Christiansen-Hasset et al,[1] the Ontario Superior Court considered the issue of precatory language in a will and whether a wish could create a trust for residual beneficiaries.

In this case, the deceased prepared a will where he directed his trustees to transfer his interest in his home to his common-law spouse, “for her sole and only use absolutely”.[2] He then went further to say that “it is my wishes that when [my common-law spouse] sells/otherwise dispose of the home, twenty percent of the proceeds shall form part of the residue of my estate and distributed to the beneficiaries.”[3] The residual beneficiaries of the deceased’s estate were the deceased’s parents, daughter and sister.

The estate trustee argued that the “armchair rule” should apply to determine the deceased’s intentions and when the surrounding circumstances were considered, it was clear that the deceased’s intention was to create a trust to benefit the residual beneficiaries by leaving them a portion of the value of the home. On the other hand, the common-law spouse argued that the will should be read as a whole and highlighted other sections of the will where directive language was used, which evidenced the fact that if the deceased intended to create a trust, he would have used more imperative language in this provision.  

The court agreed with the common-law spouse and found that the deceased’s “wishes” did not create a trust for the benefit of the residual beneficiaries. It was not the deceased’s intention to create a binding direction to the estate trustee, as the language in the will was clear that the home was to be used by his common-law spouse for her sole use absolutely. In making this determination, the court relied on the solicitor’s notes which stated that the deceased did not intend to create a life interest for his common-law spouse and that his primary intention was to ensure she had a place to live. It was only upon the sale of the home that he would want a portion of the proceeds to be given to his family.

The court also determined that in order to create a trust, the language of the settlor had to be imperative and in this case, the language was not. However, the court went on to say that a moral obligation (which is non-binding) was created upon the common-law spouse which would arise at the time the home was sold.

Although it may be apparent that the use of certain words must be considered carefully when drafting testamentary documents, this case is a reminder that a wish and a direction do not create the same effects on death. A testator must be clear as to what is a direction to his or her estate trustee and what is merely a wish (and therefore not binding). When preparing testamentary documents, precatory language should be used cautiously and trusts should be established with formal language if it is the testator’s intention to create binding restrictions on his or her beneficiaries.

Estate planners should also ensure that meticulous notes are taken when preparing wills as we often see courts relying on these notes to determine the deceased’s intentions at the time the will was drafted. As the saying goes, careful what you wish for…it may lead to litigation.

Thank you for reading.  

 

 

[1] 2024 ONSC 2509.

[2] Ibid at para 3.

[3] Ibid.