Alzheimer's No Bar to FLA Equalization
Family law issues often make an appearance in estate litigation matters, as illustrated in a recent Ontario case, Yamada v. Zolad [2007] O.J. No. 607 (Ont. S.C.).
In Yamada Estate, a woman suffering from Alzheimer’s was allowed to elect to take her share of net family property under the Family Law Act, rather than take a life interest in the residue of her husband’s estate under his will.
The husband and wife had married in 1982. In 1997, when the couple was living in London, the wife began showing signs of Alzheimer’s and was moved to a medical centre in 2001, when her condition became more severe. The husband visited the wife almost every day until 2003, when the wife was moved to a Toronto facility. By this time, the husband’s mobility was impaired and it became difficult for him to visit his wife in Toronto.
The husband had won a million dollars in 2002. He died in 2005, leaving a Will. Further to the terms of the Will, he left his wife a life interest in the residue of his estate, with power given to his estate trustees to encroach on the capital to ensure his wife’s comfort and welfare. On the death of the wife, the two estate trustees were to receive $10,000.00 each in lieu of compensation, with the balance to be divided equally between two charities.
The wife, through her litigation guardian, brought an application to elect to take her entitlement under the Family Law Act, rather than keep her life interest in the residue of the husband’s estate. The estate trustees opposed the application, claiming that the parties had separated in 2001. They claimed that the husband had a fixed intention to separate from the wife in 2001.
Justice Greer granted the wife’s application. She found that the couple had never made any legal or emotional efforts to separate during their marriage and/or destroy the marriage. There was no Separation Agreement and no divorce petition. The couple simply became physically separated due to the wife’s advancing Alzheimer’s disease. This physical separation was not sufficient to establish legal separation in the circumstances.
Justice Greer also found that the husband’s 2002 lottery win was the motivating factor behind the estate trustees’ opposition to the wife’s equalization claim. She noted that they chose a separation date that pre-dated the lottery win, notwithstanding that the husband had been frequently visiting the wife at this time. She further noted that there was no evidence that either of the charities (as capital beneficiaries of the Estate), were opposing the wife’s equalization claim. Justice Greer appeared to reprimand the estate trustees for their position on the application, stating that as estate trustees and beneficiaries, they should have taken a neutral position on the application. Interestingly, the estate trustees were still awarded their costs to be paid out of the estate.
Have a great day!
Bianca La Neve
