Disinherited? Not So Fast!

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Image source: news.nationalpost.com

BY VALERIE DYE 

It is not uncommon to hear of someone being disinherited.  This disinheritance may occur in a number of ways.  The testator may simply make a will and leave nothing for the person who is being disinherited. Another way, which has become quite common, is where a person transfers property from his name into the name of himself and another person jointly. The effect of this is that upon the death of the transferor the property passes to the transferee (joint owner) solely, under the right of survivorship and does not become a part of the deceased’s estate. This prevents anyone else from claiming a share in that property under an intestacy or otherwise.

It is important to note, however, that there are instances where the court will interfere with jointly held assets which should naturally pass to the other joint owner in full, under right of survivorship.  

If the court determines that a person who is determined to be a dependant of the deceased, has not been given enough financial support under the will of the deceased or under intestacy the Court has the power under Section 72 of the Succession Law Reform Act to deem the jointly held property as part of the estate and award support to the dependant from the proceeds of the jointly held asset. For instance, in order to circumvent the operation of the law under testacy or intestacy the deceased may have decided to transfer ownership of his home from himself into joint ownership with himself and a child. In this case, when the deceased passes away the child becomes the owner of that home under the right of survivorship. However, if the deceased has a another child or children or a spouse, who qualifies as a dependant and he failed to leave adequate financial support for either of them, the court may claw back the jointly held asset and provide support for the other dependants from the capital value of the jointly held asset. Section 72 of the Succession Law Reform Act gives the court the authority to go after jointly held real estate, bank accounts or any other jointly owned asset.

It is important to note that not all jointly held assets will be treated in this way. Section 72 (2) of the Succession Law Reform Act states specifically that only the extent of the value of the asset or disposition owned by the deceased will be deemed to be a part of his estate. This provision is aimed mainly at going after assets that were owned by the deceased but which he disposed of before death in order to ensure that one dependant benefits above the others. As stated in section 72 (3) of the Act, the person claiming support has the burden of proving that the assets belonged either entirely or in part to the deceased.  

Section 72 is not limited to jointly held assets. The courts may also go after assets disposed of fully, if it can be shown that the deceased had the power to take back that asset at any time.

The objective of the legislation and the supporting caselaw is to enforce the idea that there is a legal as well as moral duty to leave adequate support for dependants after death. Consequently, a person’s deliberate intention to disinherit a dependant is quite likely to fail if the court intervenes and claws back those assets for the benefit of the disinherited dependant. It may therefore be worthwhile to make adequate provisions in a will for all dependants regardless of the circumstances.

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