Estate planning and the legal system: Part I

Guide Legal: What if your wishes collide with public policy?

Parents often use wills to control the lifestyle choices of their children. The courts have long recognized the freedom of an individual to bestow his or her property in a will. However, this freedom is restricted by certain public policy rules that guard against the disposition of property in a manner that is contrary to Canadian values and the good of the public.

As a general statement, wills are upheld by the courts as long as they do not expressly discriminate on the grounds of race, creed, citizenship, place of origin, colour, ethnic origin, sex or handicap. For instance, a will that disinherits a child on the express basis that he or she is homosexual or that expressly conditions inheritance on the marriage of their child to someone of the opposite sex is void for reasons of public policy.

Recently, however, a case emerged where the will, on its face, did not contain any discriminatory provisions but the testator, prior to his death, verbally expressed discriminatory reasons for disinheriting his daughter. The testator said that because his daughter had a child with a man of a different race, he was disinheriting her.

The testator, Rector Emmanuel Spence, died in January 2013 at the age of 71. Rector was divorced and had two children, Verolin and Donna. Donna resided with her mother and Verolin resided with her father. In 1979, Rector immigrated to Canada. He was later joined by Verolin, after she completed her secondary school education. Donna remained in England and never thereafter visited or communicated with her father.

Rector supported Verolin financially throughout her educational studies, both in Canada and abroad. In 1992, Rector told Verolin that he had made a will which provided that she would inherit his property and house in Maple, Ont. He gave Verolin a set of keys allowing her unlimited and continued use of that property.

Verolin’s relationship with her father came to a dramatic end in 2002 when she told her father that she was pregnant and that the father of her child was Caucasian. Her father exclaimed that he was ashamed of Verolin and from that point onwards, he restricted his communications with her. He made it clear to Verolin that he would not allow a “white man’s child” in his house. From 2002 until his death in 2013, Rector did not return Verolin’s calls and refused to have anything to do with his grandson, Alexander.

In 2010, Rector changed his will to include a clause specifically disinheriting Verolin. The clause stated: “I specifically bequeath nothing to my daughter, Verolin Spence, as she has had no communication with me for several years and has shown no interest in me as a father.” After his death, Verolin challenged the will on the basis that it was void for public policy reasons, namely that it discriminated against her.

At the court hearing, a witness testified that Rector told her on several occasions that he disinherited Verolin and her son because the father of her son was white. He also stated that he changed his will because he wanted to exclude Verolin and include Donna and her two sons, since the father of Donna’s sons was black.

The court ruled in Verolin’s favour and set aside the will. Under the laws of intestacy, Donna and Verolin each inherited 50 per cent of the estate.

The court determined that while the clause in the father’s will did not, on its face, offend public policy, the reason for disinheriting Verolin was based on a stated racist principle. In arriving at this conclusion, the court stated:

“Does it offend public policy that the deceased’s other daughter, Donna, should receive the entire estate simply because her children were fathered by a black man? That, in my view, offends not only human sensibilities but also public policy.”

The case is remarkable. It represents the first time that a court has gone behind what is otherwise a clear and unambiguous will to determine whether the testator’s stated reasons for disposition were based on discriminatory motivations.

While the court made it clear that its decision to go behind the will was specific to the particular facts, it nonetheless considered evidence outside the four corners of the will. In doing so, the court opened the door to will challenges based not on the language of the will itself but rather on the circumstances or “true” reasons for a testator’s decisions.

The case is currently under appeal. However, until the matter is resolved by a higher court, it is best that if there is a desire to leave someone out of a will or divide the estate differently among beneficiaries (particularly children or grandchildren), careful consideration must be given to the reasons to ensure that they do not contradict public policy rules. As the law stands now, courts are willing to look inside a testator’s head to determine whether the testator’s decisions are based on improper motivations, even if the testator’s head is six feet under.

Nadia Campion is a business litigator at Lenczner Slaght in Toronto. Campion’s clients include small- to medium-size businesses, individuals and associations across a range of sectors in civil litigation such as commercial disputes as well as wills, trusts and estates litigation. She can be reached at [email protected] or 416-865-2974.

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