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Sunday, January 4, 2015

Can I cut my spouse and kids out of my will by leaving them a dollar?

A reader recently sent me an e-mail message asking how he can leave his wife and kids out of  his will. His question and my response are below:

"I do not want to leave my wife and children anything. My children are not dependent. Can I leave them out of my will? Or I should write in the will that I leave one dollar to my wife and one dollar each to my children?"

I'm going to address this question in two parts, since your wife and your children are are in different legal situations. However, one thing they have in common is that leaving them a dollar does nothing. Absolutely nothing. I've often been asked by clients whether leaving a beneficiary a dollar is the magic legal bullet that people seem to think it is. It's not. Hopefully this post will explain why.

Firstly, the question of leaving out your wife. The basic rule everywhere in Canada is that you cannot leave out a dependent to whom you owe the duty of financial support. A wife is such a dependent. In some provinces, but not all, this includes a common law wife.

As with all basic rules, there are exceptions. You didn't say why you want to leave out your wife or where you want your estate to go instead, but the reason might be relevant. Your wife might be financially independent of you, and you feel that your estate could best be used elsewhere. Or, perhaps she is not your first wife, and you feel that you'd like to leave your estate to someone else. Usually when there is a second spouse who is being left out, the estate goes to the children of the first marriage, but that doesn't seem to be your case.

As I said, a wife is a legal dependent and entitled to a share of your estate. In the statutes, it's generally described as "adequate support", though some provinces have a  more defined formula. On your death, this right arises automatically. However, there are circumstances in which a wife can be left out.

Your will should not simply omit any mention of her, as that would be completely ineffective. Also, leaving her a dollar would do nothing but insult her and won't bar her from action in any way. It is highly unlikely that a judge would find $1 to be "adequate support". Your will would have to clearly state that you have been advised of her right to support, and that you believe that she already has "adequate support". If she is receiving anything else on your death, such as a house in joint names, your RRSP, or life insurance (none of which passes under your will), you should say so in your will.

Remember that when and if she makes a claim for part of your estate, you won't be there to explain to the judge that she got the house or insurance, so let  your will say that for you.

If she is financially independent of you, state that in your will as well. Most of the time, couples do their estate planning together, and if the wife really is financially independent she'll be aware of and supportive of the husband's wish to leave the estate elsewhere.

This is the best use you can make of your will in this circumstance, but even this is not a guaranteed defence against a claim a determined wife may make against your estate. A pre-nuptial agreement that waives her claim to any share of your estate will help too, but even that agreement might not hold if it's grossly unfair. Give your executor the ammunition he or she needs to carry out your will, but understand that if your wife is not financially independent of you, her claim against  your estate will likely succeed.

Now, for the children. You said that they are not dependent on you, so this means they have no automatic right to a share of your estate. It's much more difficult for a non-dependent to get a will changed than it is for a dependent. In British Columbia, children can apply to change their parents' wills on unfairness grounds, but this is not the case in the rest of Canada.

Leaving them a dollar would have no legal impact and would probably insult and hurt them (if you're leaving them out because you hate them, then go ahead).

You can use your will to give some insight, For example, you could say that you aren't leaving your estate to your children because you helped all of them generously during your lifetime.

At this point, it matters where you want the estate to go. Spouses and children are often referred to as "logical beneficiaries" because it makes sense for individuals to leave their estates to them. Leaving your estate to another person might be so illogical as to give rise to suspicious circumstances. For example, leaving your estate to a caregiver or a new friend that nobody knows might give rise to a suspicion that the person is manipulating or coercing you into benefitting them in your will. In a case like that, children would likely challenge your estate in court.

If you have a definite plan for your estate that does not include your wife and children, such as setting up a scholarship or giving to a charitable organization, consider discussing this with them ahead of time. Explaining that you are making a choice that is not about punishing them but is about helping where you can make a real impact could actually prevent anyone from contesting your will.

Many decisions to challenge a will are the result of the shock and pain of feeling passed over or punished, so it really doesn't hurt to explain yourself while you have the chance.






7 comments:

  1. You've covered dependant's relief obligations, but with respect to the spouse, the testator may also have marital property obligations. Some provinces in Canada say that if your will doesn't leave your spouse at least as much as he/she would have been entitled to receive at divorce under marital property rules, then the spouse can elect to take the divorce amount.

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  2. My father is recently deceased and I am his executor. Everything goes to his wife (my mother).

    While dealing with his estate, I became aware of the details of both their wills (mirrored). I am also the named executor of my mothers will.

    My mother has willed everything to be equally divided between myself and my 2 adult children, her grandchildren. This is to the exclusion of her daughter (my half-sister) and 2 adult children. She has now added a paragraph of explanation which refers to the troubled relationship over the last few decades.(Her will - over 10 years and various small revisions - has divided her assets in this way)

    In Ontario would those who feel "disinherited" have a basis to contest the will?

    RRIF and TFSA have specific beneficiary designations (with the same 3 way split as above). Is there any basis for that to be contested?

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  3. Hi Lynne
    My brother has passed away in August 2015. He was divorced and has 3 children from this marriage. He was remarried in March 2011. He made his will in January 2011 leaving everything to his children. He got married in India and his wife arrived in Canada in March 2012 and was here in Canada for 3 1/2 years with him and did not work a single day during this time. She now believes his will of 2011 March is revoked because it was made prior to their marriage. and that she is entitled to half according to the new WESA laws that came in March 2014. He has a codicil made just weeks before he passed away, as he was afraid his wife was going to leave him. My brother had amended his will just weeks before he passed away indicating that his wife is to be provided 1000.00 for every month she resides with him, which would give her about 42,000 dollars plus he has already mentioned that he has given her a cash amount of 30, 000 as a loan to her family back in India. He has also mentioned that she can keep gold jewellery given to her at their wedding plus some as gifts after their marriage. All together she would have 72, 000 cash plus 25, 000 in gold jewellery. My brother assets are worth close to 3 million dollars but he has not filed his income taxes for several years and CRA has a liablilyt of about 7 million again him. Would the funds be adequate funds for her as per the Courts, as his estate may be down to zero after the taxes are filed. His wife says she is going to contest the will. He was afraid she was going to leave. there are no children from this second marriage

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  4. Hi Lynne
    My brother has passed away in August 2015. He was divorced and has 3 children from this marriage. He was remarried in March 2011. He made his will in January 2011 leaving everything to his children. He got married in India and his wife arrived in Canada in March 2012 and was here in Canada for 3 1/2 years with him and did not work a single day during this time. She now believes his will of 2011 March is revoked because it was made prior to their marriage. and that she is entitled to half according to the new WESA laws that came in March 2014. He has a codicil made just weeks before he passed away, as he was afraid his wife was going to leave him. My brother had amended his will just weeks before he passed away indicating that his wife is to be provided 1000.00 for every month she resides with him, which would give her about 42,000 dollars plus he has already mentioned that he has given her a cash amount of 30, 000 as a loan to her family back in India. He has also mentioned that she can keep gold jewellery given to her at their wedding plus some as gifts after their marriage. All together she would have 72, 000 cash plus 25, 000 in gold jewellery. My brother assets are worth close to 3 million dollars but he has not filed his income taxes for several years and CRA has a liablilyt of about 7 million again him. Would the funds be adequate funds for her as per the Courts, as his estate may be down to zero after the taxes are filed. His wife says she is going to contest the will. He was afraid she was going to leave. there are no children from this second marriage. We also can't find his original will and quite sure that she has it as my brother had it in a safety box which is now closed. He said he had brought the will home and it can't be found. Will the original codicil validate the will that she thinks is revoked?

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  5. My father left his common-law spouse his home (sole title) as a life estate deed in trust, which is what they agreed upon in life, and she was aware of this. After he passed, she is now attempting to contest the will, saying it does not adequately support her, despite being the majority of his estate. We have a sister with a significant disability, and after his common-law spouse's death, the estate was to be rolled into a trust for her. Is it possible for his CLS to take this away from my sister?

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    Replies
    1. Is it possible? Yes, but not guaranteed. If the common law spouse applies for a greater share of the estate, someone should counter her lawsuit on behalf of your disabled sister. The judge will weigh the competing claims in the context of what is available in the estate. If there isn't enough for everyone to have what they want, the judge will decide how it is to be shared out.

      Lynne

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  6. My father married an Asian, who he has yet to get into canada. He has applied 3 times, and is now having to appeal, with no guarantee that she will get a visa. She is 15 years younger than him. His 2nd wife is living with him in the basement of his BC residence, and he has indicated once he gets his third wife there from china, she has no issues with the 2nd wife living there, so long as she pays rent. My sister and I both think the asian marriage is a sham. As he married her after being in China only two days and didn't even tell us he was going to China. So, my sister and I are worried he is going to leave what little he has left, basically his house and a car, to his new asian wife and she will simply sell the house and take the money back to China. She will be a millionaire in China. And then the second ex-wife, living in the basement, what her game is, we don't know. She lied to him once about a year ago and told him she'd won the lottery and we heard he was loaning her money. My father's been abusive my whole life. I don't think this asian woman deserves anything. He's now 75.

    ReplyDelete

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