Today’s blog is written by guest blogger Adam Parachin, Associate Professor at the Faculty of Law at the University of Western Ontario.
How, if at all, should human rights norms impact trusts and estates law? Human rights may at first seem to have very little to do with trusts and estates but there exist some potential points of contact. Testators often draft into trusts conditions that limit the circumstances in which trust property may be distributed to beneficiaries. These conditions are usually innocuous, but testators sometimes test the boundaries of testamentary freedom. They may require beneficiaries to practice (or not practice) a particular religion or may prohibit beneficiaries from participating in certain relationships, e.g., interracial, interfaith or same-sex marriages. These kinds of conditions raise complex questions regarding the relevance of human rights norms to trusts and estates law.
The rule is that trust provisions contrary to public policy are void. The scope of the public policy doctrine is, however, unclear. While conditions requiring a beneficiary to perform an illegal act or get divorced have been struck on public policy grounds, the status of discriminatory conditions is less clear.
In Blathwayt v. Baron Cawley  1 A.C. 397 (H.L.), Lord Wilberforce famously concluded that “discrimination is not the same thing as choice” and that “private selection [has not] yet become a matter of public policy.” Religiously restrictive conditions have thus been repeatedly upheld in case after case. Even where such conditions have been struck, courts have tended not to rely exclusively (or even at all) upon the discriminatory character of the condition. Emphasizing the need for certainty in property transactions, courts have in many cases struck such conditions on the ground that the discriminatory criteria were not clear enough.
Things may, however, be changing. In Murley Estate v. Murley  N.J. No. 177, the court struck a religiously restrictive condition observing (without explanation) that it was against public policy. In Fox v. Fox Estate  O.J. No. 375, Galligan J.A. cited a charitable trust decision, Canada Trust Co. v. Ontario Human Rights Commission  O.J. No. 615, for the proposition that discrimination is against the trust law doctrine of public policy. There is also an emerging body of academic scholarship arguing against discriminatory trust conditions.
While a legal system that values and protects equality is preferable to one that actively assists discrimination, it is not obvious that trust law should strike discriminatory conditions. One difficulty stems from the implication that a beneficiary subject to a discriminatory condition has been improperly deprived of something. Beneficial interests in private trusts are less about entitlement than benefaction. Subject to very few exceptions, a testator is at liberty to determine who does and who does not share in his or her estate.
Once we acknowledge that the law will generally support a testator in withholding benefaction for practically any reason (including a discriminatory reason), it becomes increasingly difficult to see why he or she should not have an equally wide latitude to condition the terms of benefaction.
In any event, striking discriminatory conditions may do very little to assist beneficiaries being discriminated against. The invalidity of a condition can result in the failure of not just the condition but also the beneficial interest to which it attaches, leaving the beneficiary with nothing.
A more fundamental difficulty lies in determining what constitutes invidious discrimination in the first place. Some have suggested that trust law can resort to constitutional equality jurisprudence cases, but this raises some significant problems. Constitutional law establishes tests aimed at identifying and restraining discriminatory state action. The reasoning of these cases is not readily transferable to trust law, where the focus is on private arrangements lacking sufficient state action to warrant the application of constitutional law principles. Even charitable trusts have a pronounced private dimension that arguably distinguishes constitutional law.
There are many complex factors at play here that need to be candidly acknowledged and carefully considered as the law moves forward.
Thanks for reading,