Estate Planning

Section 72(1)(e) SLRA: express/written trust instrument is a required element

By Hull & Hull LLP

Part V of Ontario's Succession Law Reform Act ("SLRA") establishes a mechanism whereby qualifying dependants can claim support from the estate of a deceased.  Section 72 of the SLRA is a deeming provision that includes certain non-estate assets as part of the estate for the purposes of calculating the value of the estate, and allows such assets to be charged ("clawed back") by a support Order made under section 63 of the SLRA. 

The recent case of Simson v. De Bartolo 2009 CanLII 38493 (ON S.C.) interprets section 72(1) and applies Cummings v. Cummings 2004 CanLII 9339 (ON C.A.), the Court of Appeals decision holding that support awards are subject to moral considerations.  One issue following Cummings has been whether moral considerations justify a support award in and of themselves, or whether moral considerations are merely relevant to quantum of support following a determination that a support award is appropriate.

The applicant in Simson v. De Bartolo was litigation guardian for her child, born out of wedlock to the deceased and the actual support claimant.  When the applicant told the deceased's wife about their relationship and the child, the deceased transferred these properties to his wife (from joint ownership) and made a will disinheriting the child.  Later, the deceased died virtually penniless.  At issue in a motion was whether properties transferred by the deceased to his wife 10 years prior to his death could be deemed part of the deceased's estate under any enumerated grounds in section 72(1). 

Justice Lemon held that these assets could not be "clawed back" under s. 72(1).  Most particularly, a transfer of land to another party in the absence of an express written trust instrument does not fall within section 72(1)(e).  Of course, the transfer may still be impressed with a trust, as Justice Lemon pointed out, and if such trust pulls the asset into the estate, the SLRA provides for protection of the dependant pursuant to section 67.  Moral considerations were relevant in determining quantum of support, but not whether an asset forms part of the estate.

The facts in SImson v. De Bartolo appear to have precluded the court from addressing the Cummings question, at least in the motion being heard.  However, section 72 has been clarified.

Enjoy your day,

Chris Graham

Full post as published by Toronto Estate Law Blog on August 19, 2009 (boomark / email).