Dishonest Estate Trustee May Extend Limitation Period For Dependent's Claim
A testator (person making a will) is expected to make adequate provision to support any of his or her dependents when drafting a will. If s/he fails to do so, after the death of the testator, the dependent can commence a claim for dependent's relief against the estate. That claim must be brought within six months of the will being probated.* Once that six month period has passed, a claim can only be made against an undistributed part of the estate unless the court grants an extension of the limitation period.
To provide an example, an imaginary estate is worth one million dollars. There is a potential dependent who the deceased was paying child support for. The amount due in child support pursuant to earlier support agreements placed the total amounts owing from the time of death to the termination of support at half a million. The dependent delays in claiming and three-quarters of the estate is distributed to beneficiaries leaving only two hundred-fifty thousand in the estate. This would, likely, mean the dependent could only get two hundred-fifty thousand rather than the five-hundred thousand that could have been his/hers.
However, there are certain circumstances when a court will extend the limitation period. A recent Ontario Superior Court decision, Weigand v Weigand Estate illustrates.
The deceased died leaving three children from a previous marriage two of whom were minor children. His will named his common law wife as estate trustee and primary beneficiary. The deceased was paying child support at the time of decease but the will did not make provision to support the dependents. The common law spouse probated the will and the estate was distributed. Sixteen and twenty-three months after probate, respectively, the two minor children applied to the court for dependent's relief. They were clearly outside of the limitation period.
The common law wife argued that the limitation period should apply and that the estate was distributed so there was nothing for the dependents. The dependents produced affidavit evidence which was corroborated by a grandparent that the common law spouse had made numerous promises that she would sell the matrimonial home (the estate's primary asset) and divide the money between herself and the children. She had not done so but rather had waited out the limitation period.
The court rejected the argument that, in these circumstances, the limitation period should apply. Rather it stated: It would be wrong to allow the respondent to rely on the fact she has distributed the estate as a basis to not grant an extension. If the applicant’s version of events is true, and the respondent did indeed promise to sell the home and distribute the funds to them, than it would be unconscionable to allow her to defeat a claim by virtue of a passed limitation period. If this is true, the respondent would be estopped from relying on the limitation period, as it would be open to the court to find that the applicants relied on that representation to their detriment.
The Lesson for Potential Dependents: It is prudent, whenever possible to obtain promises to pay in writing or to confirm the promise in writing. If someone is reluctant to provide that promise, be cautious and seek legal advice.
The Lesson for Estate Trustees: It is foolish to make promises you have no intention of keeping. Had this trustee distributed the assets to third-party beneficiaries she still could have been personally responsible to pay the dependent's support. Seek legal advice on how to administer the estate if in doubt.
*It is important to note that the date of probate is what triggers the limitation period and not the date of death. An estate trustee who delays in obtaining probate is, arguably, extending the limitation to the detriment of beneficiaries. This author has successfully argued that estate trustees should be liable for legal costs associated with claims against the estate which fell within a limitation period that existed due to delay in probate.
Weigand v Weigand Estate, 2016 ONSC 6201 (ONSC) https://www.canlii.org/en/on/onsc/doc/2016/2016onsc6201/2016onsc6201.pdf
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