Financial support from an estate?

By Luciana Amaral | 1 January, 2018 |

A guide to navigating dependant support claims under the Succession Law Reform Act

Losing a loved one can be hard enough. Deciding whether to pursue a claim for financial compensation or support from that person’s estate can add additional stress and confusion. In this article, we answer some of the most frequently asked questions about dependant support claims.

As a starting point, section 58 of the Succession Law Reform Act (“SLRA”) provides the court with authority to make support orders in certain circumstances. Section 58 states, “where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.”

Who is a Dependant?

The first question is whether you qualify as a “dependant” of the deceased. A dependant is defined as either a spouse, parent, child, brother or sister of the deceased to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.

A “spouse” under the SLRA can be a wife, former wife, common-law spouse or former common-law spouse.

A “child” under the SLRA can be a grandchild or a non-biological child whom the deceased had demonstrated a “settled intention to treat as a child of his or her family”. To establish a “settled intention”, the courts must find at least one or more of the following in the relationship between the deceased and the child:

(a) cohabitation with the child;

(b) treatment of the child on an equal footing with his own children;

(d) continued access or visitation;

(e) contribution financially to day-to-day needs.

Even if you are a spouse, child or other relative as indicated above, to qualify as a dependant, the deceased must have actually been providing support OR was under a legal obligation to provide support to you immediately before his or her death. “Support” does not have to be direct financial but can consist of providing basic human needs such as food and shelter or physical and moral support. The deceased may have had a legal obligation to provide support either through an agreement between the two of you, a Court Order or by virtue of a statutory requirement such as section 30 of the Family Law Act, which legally requires spouses to provide support for another spouse in certain circumstances.

How do Courts Determine the Quantum and Duration of Support?

In determining the quantum and duration of support, the court considers all of the surrounding circumstances, including, but not limited to the following factors set out in section 62 of the SLRA:

(a) the dependant’s current assets and means;

(b) the assets and means that the dependant is likely to have in the future;

(c) the dependant’s capacity to contribute to his or her own support;

(d) the dependant’s age and physical and mental health;

(e) the dependant’s needs, in determining which the court shall have regard to the dependant’s accustomed standard of living;

(f) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;

(g) the proximity and duration of the dependant’s relationship with the deceased;

(h) the contributions made by the dependant to the deceased’s welfare, including indirect and non-financial contributions;

(i) the contributions made by the dependant to the acquisition, maintenance and improvement of the deceased’s property or business;

(j) a contribution by the dependant to the realization of the deceased’s career potential;

(k) whether the dependant has a legal obligation to provide support for another person;

(l) the circumstances of the deceased at the time of death;

(m) any agreement between the deceased and the dependant;

(n) any previous distribution or division of property made by the deceased in favour of the dependant by gift or agreement or under court order;

(o) the claims that any other person may have as a dependant;

(p) if the dependant is a child,

(i) the child’s aptitude for and reasonable prospects of obtaining an education, and

(ii) the child’s need for a stable environment;

(q) if the dependant is a child of the age of sixteen years or more, whether the child has withdrawn from parental control;

(r) if the dependant is a spouse,

(i) a course of conduct by the spouse during the deceased’s lifetime that is so unconscionable as to constitute an obvious and gross repudiation of the relationship,

(ii) the length of time the spouses cohabited,

(iii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,

(vi) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse had devoted the time spent in performing that service in remunerative employment and had contributed the earnings to the family’s support.

(s) any other legal right of the dependant to support, other than out of public money.

Given the remedial nature of sections 58 and 62 of the SLRA, courts have held that the section 62 factors should be interpreted in a broad and liberal manner when determining support, erring on the side of over compensating if there is any doubt as to the dependant’s legal and moral entitlement and needs.

While the dependant’s need is a significant factor, the court does not simply conduct a needs-based analysis; the need of the dependant is only one factor that is considered. In the seminal case of Cummings v. Cummings, 2004 CanLII 9339 (Ont. C.A.), the court stated as follows:

“…when examining all of the circumstances of an application for dependants’ relief, the court must consider,

(a) what legal obligations would have been imposed on the deceased had the question of provision arisen during his lifetime; and,

(b) what moral obligations arise between the deceased and his or her dependants as a result of society’s expectations of what a judicious person would do in the circumstances.”

The Ontario Superior Court in Perilli v. Foley Estate, [2006] O.J. No. 465 (S.C.J.) described the approach to determining support as follows:

“… in a claim under section 58 of the SLRA in Ontario, I find that the court must first identify all of the dependants who may have a claim on the estate. Then, the court must tentatively value the claims of those dependants by considering the factors set out in the legislation and the legal and moral obligations of the estate to the dependants. Thereafter, the court must identify those non-dependant persons who may have a legal or moral claim to a share of the estate. Lastly, the court must attempt to balance the competing claims to the estate by taking into account the size of the estate, the strength of the claims, and the intentions of the deceased in order to arrive at a judicious distribution of the estate. This exercise may involve the prioritization of the competing claims.”

Therefore, it is safe to say that there is no one-size-fits-all approach to dependent support claims. The amount that a person may be entitled to depends on a whole host of factors, including the number of dependants, the value of the estate, the financial well-being of each dependant and the claims of any non-dependant persons, such as an adult child of the deceased.

What if the Deceased Died Intestate (Without a Valid Will)?

The following “rules” of intestacy set out in Part II of the SLRA apply when a person dies without a will:

If a person is survived by a spouse but no “issue” (defined as a descendant and includes children and grandchildren), the spouse will inherit the entire estate;
If a person is survived by a spouse and one issue, the spouse will inherit the first $200,000.00 of the estate (known as the “preferential share”). Any amount in excess of the preferential share is divided equally between the spouse and issue. For example, if the estate was valued at $300,000.00, the spouse would receive the first $200,000.00 and the remaining $100,000.00 would be divided equally between the spouse and issue so that each received $50,000.00;
If a person is survived by a spouse and multiple issues, the spouse will inherit the first $200,000.00 of the estate and any amount remaining is divided as follows: the spouse receives 1/3 and the remaining 2/3 balance is divided equally among the issues.

It is important to point out that a spouse under Part II of the SLRA does not include a common-law spouse. If a common-law spouse feels that the deceased failed to provide him or her with adequate support, the spouse can bring a claim for dependant support against the estate. The same applies for children, notwithstanding the rules of intestacy set out above. Let us illustrate with the decision of Fernandez v. Fernandez, 2011 ONSC 8023 (“Fernandez”).

In Fernandez, the deceased died intestate. The only estate asset of value was a ½ interest in a house, valued between $170,000.00 and $210,000.00. The other ½ interest was owned by the deceased’s ex-common-law spouse. The estate had various outstanding debts in the amount of $171,102.39. The deceased also had a life insurance policy in the amount of $194,085.04 and various investments in the amount of $72,934.00, all naming his ex-common-law spouse as a beneficiary.

Dependant support claims were commenced by the deceased’s daughter (from another ex-common-law relationship) and ex-wife, whom he had been separated from for 28 years, but never divorced. Under the rules of intestacy, the first $200,000 of the estate was to go to his ex-wife (if there was any money left in the estate after paying the various debts). The ex-wife could not access the life insurance policy or investment money unless she commenced a dependent support claim. This is because section 72 of the SLRA allows such assets to be “clawed back” into the estate for the purpose of a dependent support claim. Since the ex-common-law spouse was the designated beneficiary under the insurance policy and investments, she did not apply for support from the estate because she stood to receive this money but for the claims commenced by the ex-wife and daughter (in other words, the deceased made adequate provision for the support of the ex-common-law spouse).

There was no dispute that the daughter, who was still a minor, was a dependent of the deceased and was entitled to compensation from the estate. After applying the factors set out in section 62 of the SLRA, the court concluded that the daughter was entitled to $57,978.00.

The main issue in this case was whether the ex-wife was entitled to support from the estate. There was evidence that she was employed, healthy, able to support herself and maintain her current lifestyle, had significant savings and minimal debts. Even though she led a modest lifestyle, the court ultimately concluded that she was not in need of support and dismissed the claim.

Unfortunately, because the parties could not agree on the value of the estate (given the conflicting evidence regarding the value of the property), the court did not determine how the daughter’s support payment would be satisfied from the estate, namely, whether it would be payable from the proceeds of sale from the property (if any) or the insurance policy/investments. Although unclear, it appears that the daughter may have received the support payment from the insurance policy/investments, as the ex-wife would have been entitled to the first $200,000.00 of the estate, after payment of the debts, if any such money was left remaining.

Conclusion

Whether you are entitled to financial support from an estate depends on a number of factors and you cannot assume that you do or do not have a claim. Instead, you should seek legal advice as soon as possible, as the time to commence a claim expires 6 months after the issuance of a Certificate of Appointment of Estate Trustee. Although section 61(2) of the SLRA provides the court with the ability to allow such claims to be made beyond the 6 month window, this applies in very limited circumstances. If you are thinking of commencing a dependant support claim or simply have questions regarding the content of this article, please do not hesitate to contact Luciana Amaral at 416-316-5558.