Yesterday, Nadia M. Harazymowycz blogged about a recent Ontario Court of Appeal decision which brought together the worlds of family and estate law. Today, I turn to a somewhat more detailed look at that case and its potential impact on estate litigation.
Carrigan v. Carrigan Estate dealt with the issue of who, as between a common law and legally married spouse, was entitled to a pension death benefit. In that case, the Deceased was legally married until his death despite having separated from his wife many years prior. After separation, the Deceased began a relationship with another woman who would eventually become his common law spouse. The Deceased’s will, which he prepared while he was married, named his wife as estate trustee as well as the sole beneficiary of the residue of his estate, after bequests to his two daughters. Following their separation, the Deceased designated his legal wife and two daughters as beneficiaries of his pension death benefit. The Deceased and his wife never formalized their separation by a court order or separation agreement. Upon death, both his legal wife and common law spouse made claims on the pension death benefit under s. 48 of the Pension Benefit Act (the “PBA”).
At first instance, the trial judge found that the Deceased’s common law spouse was entitled to the death benefit based on an interpretation of s. 48(3) of the PBA. That section was interpreted to mean that only a spouse living with the member of the pension plan at the time of death was entitled to the benefit.
The appellate court reversed the trial judge. In so doing, the court focussed on s. 48(6) of the PBA, which provides for a designated beneficiary to claim the death benefit “if, (a) The member or former member does not have a spouse on the date of death; or (b) The member or former member is living separate and apart from his or her spouse on that date.”
While the trial judge interpreted this section as only being triggered when (a) was satisfied, the appeal court reasoned that “[t]he structure of s. 48(6) indicates that the existence of either circumstance triggers the application of the subsection” [emphasis added]. The result of this finding was that neither the legal wife nor the common law spouse could be defined as a “spouse” under the PBA, thereby establishing the named beneficiary as the rightful claimant.
The decision in Carrigan serves as a reminder to update your will and other testamentary dispositions, especially following a separation or divorce. It also underscores the importance of careful consideration of the legal consequences of these decisions. Finally, as noted in Nadia’s blog from yesterday, this decision is likely to have family law implications as well; notably, reinforcing the importance of formalizing a separation through a valid agreement or court order.
Thanks for reading!