All About Estates

Who is the Spouse?

This Blog was written by: Gali Gelbart, Estate and Trust Consultant, Scotia Wealth Management 

I recently was part of a cross-Canada presentation hosted by the Estate Planning Council of Canada on the role of spouses in estate matters. I was particularly struck by how different the provincial regimes are, highlighting the importance of getting estate planning advice from local specialists in your jurisdiction. Marital and family status has always been a key driver in estate planning work. Spousal rights on death, spousal entitlement in an intestacy, dependant relief and medical decision making rules will differ in each province. Judicial consideration in each province has also given rise to distinctions in the case law.

The starting point we usually turn to is the definition of “spouse” within the various provincial and federal legislation. Most of us recognize that “spouse” is defined differently in the Income Tax Act, the provincial family laws, pension benefit entitlement and health care consent statutes, giving rise to a patchwork of definitions and end results. In some provinces, the entitlement of a spouse in an estate situation is very similar to the property division and spousal rights upon a separation, but this is not always the case.

As a BC practitioner, I can summarize the current legislative landscape for estates in BC. Like most provinces, the family law act gives a spouse a claim to an undivided half interest in all family property upon separation. However, the family legislation does not address division on death of a spouse, this is found in the wills and estate legislation. A spouse has a right to a share of the deceased spouse’s estate on death, whether there was a will or an intestacy. Upon intestacy, a spouse receives a preferential share of the estate. A spouse can also commence a claim for judicial variation of a will if the Will failed to make “adequate provision”, however a will variation claim is foreclosed if there was a spousal separation.

So, what is a spouse? The statutes contemplate persons who are legally married, persons who live together in a “marriage-like” or conjugal relationship and have a child together, or persons who live in a marriage-like relationship for a continuous period of a certain length of time (which varies by province). When it comes to deciding what a marriage-like relationship looks like, cases from across Canada have acknowledged the fact-driven nature of this exercise and the uniqueness of the specific circumstances of the people involved. The cases on spousal relationships sometimes refer to what are called the Moldowich factors, based on the case of the same name from Ontario[1].

These factors collectively cover things like cohabitation, sexual relations, services, social aspects, financial dependence and ownership of property and arrangements surrounding children. None of these taken alone can be determinative, and often realistically there is recognition that relationships change over time. The real question might be what were the mutual intentions of the parties, or for situations in estate litigation, what can be concluded from the available evidence. Interesting results can arise – for instance, a separation did not conclusively terminate a marriage-like relationship in Robledano v. Queano[2].

As modern families evolve and take shape in this century, public policy will have to continually rethink what is a family, and what are the cultural norms affecting policy decisions. Sometimes there are inconsistencies and confusion even within one jurisdiction. For example, Ontario’s family law defines unmarried parties as spouses only if they have lived together in a conjugal relationship for 3 years, a higher standard than in BC, Alberta and Nova Scotia. But Ontario’s Health Care Consent Act provides that substitute medical decision making can be made by spouses, meaning those that have lived together in a conjugal relationship for a minimum of only one year.

Coming into force early in this century, Alberta’s Adult Interdependent Relationship Act is perhaps the most modern in Canada. This Act has created a new term for spousal relationships: “adult interdependent partner”, affectionately referred to as AIPs in that province. The Alberta statute contemplates relationships of interdependence as sharing your life with another, being emotionally committed to one another and functioning as an economic and domestic unit. Couples can enter into an AIP agreement, deeming themselves as each other’s partners. Similarly, couples in Nova Scotia can register a domestic partner declaration pursuant to their Vital Statistics Act.

As marriages continue to have a high failure rate and societal norms around domestic partnerships are changing, the question of ‘who is a spouse’ will continue to crop up in our estate planning conversations. We’ve all heard of predatory marriages in vulnerable populations, with devastating results for families. On the other hand, spouses enjoy certain privileges from the perspective of tax deferral and medical decision making. Because of the fluid nature of defining a spouse, we are reminded to always consult the appropriate legislation when evaluating a spousal relationship. Some of the tools practitioners continue to use such as trusts, and cohabitation or marriage agreements, will have an increasingly important role in structuring an appropriate plan.

[1] Molodowich v. Penttinen, 1980 CanLII 1537 (Ont. Dist. Ct.)

[2] Robledano v. Queano, 2019 BCCA 150 (CanLII), leave to appeal ref’d [2019] S.C.C.A. No. 265

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