The recent endorsement issued by Justice P.C. Hennessy in Makarchuk v. Makarchuk, 2011 ONSC 4633 serves as a reminder of the importance of considering estate planning issues when spouses are separating.
The son of a deceased testator applied to the court for advice and direction with respect to the last will and testament of the testator and a separation agreement entered into by testator and his spouse. The issue was whether the spouse had released her right to be the Executrix of the testator’s Will and her right to take as a beneficiary under that Will as a result of a release that was incorporated into the separation agreement.
The testator and his spouse married in 1961 and had two children. In November 2003, they separated, and in December 2003, they signed a separation agreement but did not divorce. The only known Will of the testator was dated five months before separation, on July 7, 2003. Pursuant to this Will, the testator’s spouse was appointed Executrix and she was the sole beneficiary of his estate. The testator did not change this Will before he died on November 29, 2008.
The separation agreement signed by testator and his spouse provided for a release by each spouse to the rights either may have under the laws of any jurisdiction in the estate of the other. Notwithstanding the arguments of counsel for the applicant, Justice Hennessy found that the release in the separation agreement was not broad enough to release any rights that the spouse may have acquired by the testator’s Will. According to the endorsement: “The language of the release speaks to ‘rights acquired under law’. This is not a reference to rights acquired by the will. I find that the release does not trump the will.”
Justice Hennessy also noted that the testator had a number of means available to him to effectively revoke the gift he had made to his spouse prior to their separation. Although the endorsement does not describe in any detail what these means would be, the testator could have executed a new Will that removed any references to his spouse.
Although estate planning issues are not the first thing that people think about when they are going through a separation, it is important that they are considered to ensure that unexpected results do not occur in the future.