Estate trustee challenged Will after beneficiary’s investigation

It is essential to have a Will in place to ensure that, after your death, your loved ones are cared for and not saddled with handling your affairs on their own. However, in some situations, a Will may not provide enough information for the estate trustee or executor to adequately determine how the estate should be arranged. The estate trustee or executor may apply to the court for direction, so a judge may assess the Will’s language and balance the law with the testator’s wishes.

A recent Ontario Court of Appeal decision dealt with uncertainty arising from the wording of a Will. It also considered how relationships with close friends can be equivalent to family ties in estate matters.

Testator left a generous gift to her close friend

In the case in question, Barsoski Estate v. Wesley, the deceased (Diane) had a close personal relationship with the appellant (Robert). In her Will, Diane provided generously for Robert. She endowed him with personal property valued at $250,000 and a $500,000 fund to maintain that property. She also requested that the estate trustee hold the property and its contents for Robert throughout his lifetime “or for such shorter period as [he] desires.”

If Robert decided not to live in the property, the $500,000 fund would be used for his living expenses, including the cost of retirement home care. The fund could also be used for funeral expenses. In such a situation, the property’s contents would go to St. Stephen’s, a charity that was also a named beneficiary in Diane’s Will.

Estate trustee challenged Will after beneficiary’s investigation

St. Stephen’s launched an investigation into the status of Diane’s property after her passing. The charity’s investigation revealed that Robert was not living in the home but was working full-time in Toronto (and later in Sault Ste. Marie). Instead, Robert’s acquaintance was living in the house. However, Robert maintained that the property gifted to him by Diane was his primary residence, and he spent one or two weekends in the home each month.

Given the uncertainty of whether Diane had contemplated this arrangement, the estate trustee brought an application to challenge the Will.

Application judge decided gift was void for uncertainty

The application judge assessed Diane’s Will at the initial hearing and determined that Robert had been given a licence to use the property rather than a life interest. A life interest allows a person to enjoy a specified property for the remainder of their life. By contrast, a licence gives an individual the right to enter and use the land for a specific purpose.

The application judge based this conclusion partly on the establishment of the $500,000 fund. The fund was to be used to cover expenses if Robert chose not to live on the property, so it was not solely to maintain the home throughout Robert’s lifetime. Because Diane gave instructions for the property in the event Robert was living elsewhere, the application judge determined Diane had actually granted a licence that would expire when he was “no longer living in the house.”

Although the application judge determined Diane had given Robert a licence, it ultimately did not affect the outcome of the original hearing. The judge found the words “no longer living in the house” unclear. As a result, the gift to Robert failed, and the estate trustee was ordered to sell the house and give the proceeds to St. Stephen’s.

Court of Appeal emphasized importance of testator’s intentions

The Ontario Court of Appeal disagreed with the decision in the initial hearing. In coming to its conclusion, the Court reiterated the principles of Will interpretation:

1. A Will must be interpreted to give effect to the intention of the testator. No other principle is more important than this one;
2. The court must read the entire Will as a whole. The words used in the Will should be considered in light of the surrounding circumstances (also known as the “armchair rule”)
3. The court must assume that the testator intended the words in the Will to have their ordinary meaning; and
4. The court may canvas extrinsic evidence to ascertain the testator’s intention.

The Court acknowledged that the same words have been used and interpreted for both licences and life interests. Case law is not always helpful in resolving the issue because the testator’s intention is the essential factor.

In that vein, the Court did not agree with the application judge’s treatment of the $500,000 fund. She committed a palpable and overriding error in placing too much weight on the fund. As the Court explained:

“First, the will contemplated, as the evidence before the application judge indicated, that the appellant would not have significant income after retirement and would likely need funds to properly maintain the home. The fund’s primary purpose was therefore to maintain the home for the appellant’s lifetime as long as he resides there. Second, there is no indication that the proceeds of renting the home in the event that he needed in the future to move into some form of institutional care in the future would have been sufficient to pay his expenses if and when they arose. Accordingly, the fund reinforces [Diane]’s commitment to giving the appellant a home, whether he was well enough to live in her home or not.”

Close friends can be akin to family

The Court of Appeal also took issue with how the application judge viewed Diane and Robert’s relationship. Because this case involved a close friend, the application judge should have distinguished the case as one involving interests more similar to spouses or common-law partners than mere friends. Her analysis did not take into account the fact that Diane and Robert considered themselves family. Because of this unique aspect of their relationship, there was no reason not to give Diane’s Will the effect she desired.

Appeal allowed in part, but the gift was able to survive

In the end, the appeal was only allowed in part. While the application judge had erred in a few ways, she was correct about the wording of the gift. As worded under the Will, the gift was “far too indefinite and uncertain to enable the Court to say what it was that the testator meant should be the event on which the estate was to determine.” There was no way to ascertain exactly what Diane meant by “no longer living in the house.” Upon her death, Robert had not been living on the property and could not immediately move to ensure the condition was fulfilled.

The Court of Appeal maintained that Robert had indeed been given a life interest in the property. However, the condition “no longer living in the house” was deemed void for uncertainty. The gift was allowed to survive absent the uncertain condition.

Contact Eisen Law in Toronto for Trusted Representation in Will Challenges

The professional estate lawyers at Eisen Law provide knowledgeable advice and help clients navigate their options in a variety of estate disputes, including Will challenges and Will interpretation issues. We also assist clients with probate and estate administration, elder law matters, guardianship cases, and trust disputes. Our accessible and responsive team proudly serves clients in Toronto and throughout Ontario. To schedule a consultation, call 416-591-9997 or contact us online.