You Make The Call
Consider the following interpretation issue, which was recently considered by the Ontario Superior Court of Justice:
The deceased left a will kit-type will directing that all “just debts, funeral and testamentary expenses, all succession duties, inheritance and death taxes, and all expenses necessarily incidental thereto, to be paid and satisfied by” my executor as soon as convenient after her death.
The will went on to provide that the following distributions were to be made:
To son A, Property A "with all loans, leins [sic], mortgages attached”.
To son B, Property B, “free and clear of all debt".
The residue was to be divided between A and B. For the purposes of the trial, the only assets of significance were the real estate: Properties A and B.
At the time of her death, the deceased had no debt other than certain mortgages registered on title against Property A.
The issue in dispute was what assets were to be chargeable for paying the deceased's taxes, including estate administration tax and income taxes, and funeral and testamentary expenses.
A took the position that these expenses were paid out of the residue, and in the absence of any residue, were to be chargeable equally as against Property A and B. (Properties A and B were of equal value.)
B took the position that Property B was conveyed to him "free and clear of all debt", and thus, those expenses were payable out of Property A only.
What did the court do? Tune in tomorrow.
Until then, thank you for reading.
Paul Trudelle
