Law Times

PAGE 8 An online resource 1.800.263.3269 Focus On TRUSTS & ESTATES LAW Few links between family, estates bars Despite obvious connections, two areas operate separately BY JULIUS MELNITZER For Law Times he intersection of family and estates law is long and wide, es- pecially with the advent of the modern blended or extended house- hold. Unfortunately, the same doesn't apply to the respective bars. "Family law issues arise constantly in my estates practice," says Suzana Popovic-Montag, managing partner of Toronto's Hull & Hull LLP. "But there's a clear line between the family bar and the estates bar so that the estates bar isn't always aware of the everyday nuances of family law legislation and practice, nor is the family bar exposed to the nuances of estate practice on a regular basis." In fact, the two bars often approach their clients' interests from very diff er- ent perspectives. "Family law practitio- ners think of the marriage contracts and cohabitation agreements they draft as bulletproof, while we see them as pos- sibly penetrable," says Popovic-Montag. However that may be, there's no question that family law considerations inform estate planning. For example, lawyers preparing an estate plan for a parent will have diff erent considerations depending on whether a child is in a fi rst or subsequent marriage. "If the planning involves off spring T There's 'a paucity of jurisprudence' on certain family law aspects of trusts and estates matters, says Howard Carr. protection over the assets the child will inherit. But that's easier said than done, largely because of the anomalies that permeate the Family Law Act. "For example, a gift prior to marriage who are older and have estates of their own, the general feeling is that they're wiser and don't have the same na- iveté as younger people," says Howard Carr of Fasken Martineau DuMoulin LLP. "Younger people have a diff erent thought process, which is not necessar- ily wrong but which is engaged by the magic of dating and engagement and the events leading up to marriage and which they don't want negated and de- stroyed by what they see as the vulgar commercial considerations that inform family law." Parents frequently want to provide is treated diff erently than a gift during the marriage, and the gap gets even more absurd in the case of a matrimo- nial home replaced during the course of a marriage," says Carr. "Th ese are things that probably were not envisaged by the authors of the original legislation." Sometimes, parents make a distribu- tion based on a condition that a child enter into a marriage contract. "I don't know of any case law that suggests such a condition might be invalid, but there is a paucity of jurisprudence on the subject," says Carr. "My view is that it may be inappropriate, but that doesn't necessarily make it invalid." Estates lawyers must also consider the impact of s. 6(1) of the act. It allows surviving spouses to elect to take their share under the will or receive their en- titlement under the Family Law Act. One important question not yet re- solved at the appellate level is whether the court has a residual discretion to set aside an election to avoid injustice. Th e question arose most recently in Iasenza v. Iasenza Estate. In that case, the widow, Melinda Iasenza, sought to set aside her election to take under the Family Law Act. She also sought support under the Succession Law Reform Act. Iasenza married the testator, who had two adult children from a prior mar- riage, in 2000. He died in 2003. Iasenza testifi ed that she had little knowledge of the family fi nances but received assurances from her husband that she could stay in the home and he would provide for her in his will. He also told her his investments were worth between $500,000 and $600,000. After her husband's death, Iasenza obtained legal advice that led her to elect under the Family Law Act in Au- gust 2004. Soon after, she began the support application. Afterward, she dis- covered that the estate was considerably larger than what she and her counsel believed, meaning that she had been fi - nancially prejudiced by her election. Justice Charles Hackland of the On- tario Superior Court, after noting the confl icting authorities on the issue of revocation and the fact that clear in- justice had resulted from the election in this case, decided he had residual jurisdiction to authorize a revocation and that the following questions were relevant to the exercise of the court's discretion: • Was the election, fi led as a result of a material mistake of fact and law, made in good faith? • Did the applicant have any culpabil- ity in relation to the choice made? • Was the notice of intent to seek re- vocation timely bearing in mind the six-month limitation for making the election? • Had the estate been distributed or would interested parties otherwise be prejudiced by a revocation? • Did the election result in an injustice to the surviving spouse? Th e estate bar welcomed the deci- sion. "Th e court addressed what had been an almost unresolvable problem for the estate bar and gave some guidance as to when the court might revoke," says Popovic-Montag. "However, there are still compet- ing authorities at the same level, and as such, we should continue to act with great caution when making an elec- tion," she adds. OcTOber 24, 2011 • Law Times The Society of Trust and Estate Practitioners STEP Canada is the world's leading international organization for trust and estate practitioners, with 2,000 members across Canada and 16,500 members worldwide holding the Trust and Estate Practitioner designation (TEP). The TEP designation communicates to your clients that you have a specialized skill set in the area of trust and estate planning. If you are a lawyer working principally in trust and estate planning, STEP Canada provides advancement of practitioner knowledge and networking through regular branch seminars, webcasts, publications, and an annual national conference. Whether you are an Experienced Practitioner with extensive experience working in estate planning, or an Emerging Practitioner, membership in STEP Canada provides opportunities to enhance your expertise and practice. Diploma Program Experienced Practitioner Qualified Practitioner Vancouver | Calgary | Toronto | Montréal | Edmonton | Winnipeg | Ottawa | Atlantic untitled.indd 1 Email: memberservices@step.ca Tel: 416.491.4949 ext. 221 Toll free:1.877.991.4949 ext. 221 1 Richmond Street West, Toronto, Ontario, M5H 3W4 www.lawtimesnews.com 11-10-20 9:14 AM

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