Family, estate law overlap: Conflicting rights of surviving spouses, children and creditors

Law360 Canada (September 13, 2024, 10:42 AM EDT) --

Jason Moore

Upon a person’s death, an unfairly-treated spouse should consider whether they will be better off by settling for their entitlement under the will or by electing and commencing an application for an equalization of net family property. This is not an easy choice. Sometimes insufficient information is available to make proper calculations and because of the competing rights of creditors, and other dependants.

Here, family and estate law overlap, and the rights of rights of surviving spouses, children and creditors conflict. This can be especially difficult given the tight deadlines imposed by the Family Law Act, R.S.O. 1990, c. F.3 (FLA), and the Succession Law Reform Act, R.S.O. 1990, c. S.26 (SLRA).

The FLA election’s impact on estate litigation

Under s. 6 of the FLA, the surviving spouse has six months from the date of death to commence their election and an application for equalization of net family property (NFP). If they do so elect, this means they choose not to take the entitlement the deceased bequeathed to them under the will. Once that election is made, any gifts made under the deceased spouse’s will are canceled. Questions arise, like: Can the surviving spouse still be an executor? What is the effect of the FLA election/application on other dependants’ Part V SLRA claims for dependant support?

Under the FLA, an equalization claim has priority over gifts in the will, entitlements under an intestacy and Part V SLRA claims except in favour of children dependants. The biggest questions revolve around how Part V claims for dependant support interact with the election for equalization of NFP.

Part V of the SLRA contemplates that the surviving spouse is a dependant and may make both an election under the FLA and an application for support under the SLRA. One of the factors a court takes into account when calculating the quantum of support under the SLRA is what level of support was received by the surviving spouse. Logic would suggest that the quantum of NFP must first be determined before how much support is awarded to the surviving spouse under the Part V claim. Given that s. 6(12) of the FLA indicates that the dependant children’s claims have priority, it is clear how this interplay gets complicated.

This is a narrow glimpse into some of the issues that a surviving spouse may have to face. Understanding and navigating the various rights and entitlements to a deceased spouse’s estate is a complex endeavour involving the interplay between the FLA and the SLRA. For those dealing with these issues, a lunch-and-learn seminar on this topic will feature Bradley Phillipps, Erin Betts and Alyssa Weinerman on Sept. 17, 2024, starting at 12 p.m. This seminar is an opportunity for new and experienced estate and family lawyers to learn about this evolving area of family law and estate litigation. For more information and to register, please access the following link.

Jason Moore is a lawyer at Wagner Sidlofsky LLP, practicing in the estate and commercial litigation groups.

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