Individuals in Ontario are free to pass their property on death as they wish, subject to certain legal limitations. This ability is often referred to as testamentary freedom and is a hallmark of English common law. Over the years, testamentary freedom has lost ground to other public policy objectives, such as ensuring dependants (which possibly includes persons who are not dependant on the will maker, but may have certain “moral claims” to the will maker’s estate) are adequately provided for on death and, based on Spence v. BMO Trust Company which is currently under appeal, ensuring beneficiaries are not disinherited for morally offensive reasons. In Spence, the court invalidated a will where the will maker had excluded his daughter because she had a child with a man of a different race.
In contrast to the concept of testamentary freedom, most civil law jurisdictions embrace the concept of “forced heirship”, under which certain percentages of one’s estate must pass in fixed proportions to certain family members.
A disappointed beneficiary may challenge a will on several grounds, including on the basis that the will maker was legally incapable of making a will. As well, a dependant of a deceased may bring a dependant’s relief claim under the Succession Law Reform Act (Ontario) if inadequate provision for him or her was left under the deceased’s will. Although there may be little planning that can be done to prevent a dependant’s relief claim (other than adequately providing for the dependant), there are a few approaches that can be used to help reduce the possibility of a will challenge.
Where a beneficiary is not included in a will or where his or her entitlement is small, it may be appropriate to prepare a letter or memorandum explaining one’s reasons. For instance, a letter or memorandum may be appropriate where a will maker does not wish to benefit an estranged child in his or her will. A letter serves two purposes: it may discourage the beneficiary from challenging the will and makes it clear that the will maker understood what he or she was doing and that there was no error or omission in not including the beneficiary.
The above approach will not be sufficient if a beneficiary clearly intends to challenge a will, no matter what. In such cases, an anti-litigation clause (also known as an “in terrorem” clause) may be useful. Under such clause, a disappointed beneficiary forfeits his or her entitlements if he or she challenges the will. To be an effective deterrent, the disappointed beneficiary should have some significant entitlement under the will so that they have something to lose if they challenge the will. As well, for the clause to be legally effective, it must provide for an alternate beneficiary who is to receive any forfeited entitlements. In order to be enforceable, anti-litigation clauses should not preclude for public policy reasons certain court applications, such as for dependant’s relief or for matters arising in the administration of an estate such as the proper interpretation of a will.
To provide additional protection, it may be appropriate in certain situations for a will maker to undergo a capacity assessment when making a will in attempt to deter a claim by a disappointed beneficiary that the deceased was legally incapable of making a will.
Where there is a concern that a disappointed beneficiary may challenge a will, it is important to seek professional advice on the best approach to protect the will and the will maker’s right to pass property on death as he or she wishes.
The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.