You Snooze, You Might Lose Your Dependent's Claim
A recent Ontario Superior Court decision illustrates that if you delay in bringing a claim against an estate, asserting that you were a dependent of the deceased, you may be out of luck. Under the Succession Law Reform Act, a dependent's claim must be commenced within six months of the grant of probate. After the six months, the executor is free to distribute the estate and a dependent's claim can only be asserted against the undistributed assets. If you delay too long, everything might be distributed leaving the dependent with nothing.
That is precisely what happened in MacDonald v Estate of James Pouliot. The alleged dependent was the common-law wife of the deceased. In 1999, the dependent and the deceased purchased a house together. Because she was recently bankrupt, title was in his name alone. For more than 20 years, they lived together, shared mortgage payments and paid the property taxes together. He died without a will. In Ontario, this effectively disinherited her since common-law spouses do not inherit under intestacy. Rather, his entire estate went to his only son.
The son obtained probate and transferred title. Seventeen months after the grant of probate, the common-law wife applied for dependent's relief. She also applied for a declaration that she had a half interest in the house. The court rejected her assertion that she had a legitimate dependent's claim, on the limitation period issue. Because the wife delayed, the estate had been distributed and there was no estate to claim against.
There was a silver lining for the wife though. Because she had contributed 50% of the down-payment and paid the mortgage and property taxes for years, she was found to have an equitable interest in the house. The house was sold and she received 50%.
The Lesson: Make your claims for dependent's relief in a timely manner. If you wait too long and the estate is distributed, you will be out of luck.
Other Lessons: This entire situation could have been avoided had a number of simple steps been taken. First, the deceased died without a will. Had he executed a simple will, his long-term wife would have been protected. Alternatively, after her release from bankruptcy, the couple should have taken the necessary steps to put her name on title. Although, the case indicates that they saw this step as an unnecessary expense, it would have been significantly smaller than the litigation expenses after death.
MacDonald v Estate of James Pouliot, 2017 ONSC 3629 (ONSC) https://www.canlii.org/en/on/onsc/doc/2017/2017onsc3629/2017onsc3629.pdf
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