When considering who to include as a beneficiary in a Will, the person making the Will (known as the Testator) may include or exclude whomever they choose without interference by the law or the courts. This is known as the principle of Testamentary Freedom, which is based on the idea that if someone has acquired and accumulated fortunes in their life, they should have complete and unfettered discretion to dispose of their assets as they please when they pass on.
However, in Ontario, Testamentary Freedom is not absolute. There are two import limits on a Testator’s ability to freely dispose of their property through their Will. At first glance, it might appear unfair for the law to impose limits on a Testator ability to do as they see fit with their Estate to protect individuals who may be deliberately excluded, there are strong public policy reasons for these limits based on notions on fairness and responsibility. These limits are discussed briefly below.
1. Limits on the ability to exclude a spouse under a Will:
The first limit is imposed by the Family Law Act, RSO 1990. Depending on the calculation of Net Family Property (NFP), a surviving spouse who is excluded under a Will may have a claim for equalization of property that the Testator owned before passing away. This right is based on idea that marriage is an economic partnership and the assets of the partnership need to be divided when one spouse passes away, and the partnership is dissolved. A spouse who is included in the Will but receives less than what they would have received if the NFP was equalized may also make an equalization claim. Typically, an individual who fits in the definition of “spouse” under the Family Law Act is entitled to bring an equalization claim against the Estate of the deceased.
2. Limits on the ability to exclude dependants under a Will:
The second limit is provided by the Succession Law Reform Act, RSO 1990, which creates a special protection for individuals who rely financially on the Testator but who are excluded under a Will. In order to make DRC, the Testator must have been providing financial support to the Dependant or must have been under a legal obligation to do so, such as by a court order for child support, spousal support or under a separation order. A DRC is unpredictable in that the financial support the court may order is not necessarily determined simply by valuating the Testator’s assets and liabilities. Rather, the courts will analyze and assess a series of factors to determine the amount and duration of support that is “adequate”, if any. An individual who fits into the definition of Dependant, which may be subjective and discretionary, may bring a Dependant’s Relief Claim (DRC) against the Estate of the deceased. This limit to Testamentary Freedom can be a particularly complex and difficult issue when dealing with claims by adult children, step-children, ex-spouses or common law partners.
It is important for a Testator to draw his or her mind to these limits on Testamentary Freedom when making a Will because a successful claim for equalization or Dependant’s relief because the law will prioritize these claims over the entitlements of any other beneficiary named in a Will.
The lawyers at Vakili Law Group have extensive experience on advising clients on how to achieve their intentions through their Will while also drawing their attention to important laws and policies which may impact the administration of their Estate after their passing. If you have questions on how to create a Will which includes the necessary considerations that will reduce the likelihood of a dispute arising in the future, contact one of the lawyers at Vakili Law Group for a consultation.
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