{"id":15956,"date":"2023-09-07T16:43:36","date_gmt":"2023-09-07T16:43:36","guid":{"rendered":"https:\/\/resources.estateably.com\/us\/the-limits-of-testamentary-freedom-in-canada-part-i-public-policy\/"},"modified":"2024-04-24T14:49:56","modified_gmt":"2024-04-24T14:49:56","slug":"the-limits-of-testamentary-freedom-in-canada-part-i-public-policy","status":"publish","type":"post","link":"https:\/\/resources.estateably.com\/us\/the-limits-of-testamentary-freedom-in-canada-part-i-public-policy\/","title":{"rendered":"The Limits Of Testamentary Freedom In Canada: Public Policy"},"content":{"rendered":"

Introduction<\/strong><\/h2>\n

Estates and trusts fall under the realm of private law \u2013 the law between persons, not persons and the government. When a testator dies, their will gives personal representatives the direction needed to adequately administer their estate pursuant to their wishes, and statute gives courts the guidance and the authority to ensure that this process is lawful. In 2011, the Ontario Court of Appeal said in Rondel v. Robinson Estate<\/em><\/a>, \u201cThe fundamental purpose of the law of wills is to give effect to the testamentary intentions of the testator for the distribution of her estate.\u201d<\/p>\n

What circumstances create exceptions to this general line of wisdom? The most common exception is for flawed execution of a will; a defective will may throw into question the testator’s intent, the existence of fraud, or the possibility of testamentary incapacity and undue influence. Some jurisdictions may follow a strict compliance regime in which all wills noncompliant with formal requirements (unsigned wills, ones that are not properly witnessed, ones with unclear provisions) fail probate.<\/p>\n

If a will is properly executed following statutory requirements, and there are no genuine questions of testamentary capacity, fraud, or undue influence, then what other reasons could cause an exception to testamentary freedom? Two major reasons are wills that contravene public policy, whether by being considered by courts to be \u2018immoral’ or illegal, and wills that follow Charter<\/em>-infringing statute. There are many circumstances in which a court may find that a competing legal right\u2014like preserving the public order, sanctioning discrimination, and ensuring constitutionality\u2013takes precedence over testamentary freedom.<\/p>\n

\u200d<\/p>\n

Who Are \u201cUnworthy Heirs\u201d?<\/strong><\/h2>\n

Canadian common law has traditionally recognized two kinds of \u201cunworthy heirs\u201d prevented from inheriting from a testator: beneficiaries who have been found guilty of killing the testator (also called the \u201cSlayer Rule\u201d) and terrorist groups whose illegal acts would benefit from the testator’s financial support. The Slayer Rule has been affirmed in both Canadian and British case law, such as in the Supreme Court of Canada decisions Lundy v. Lundy<\/em>, (1895) 24 SCR 650<\/a> and Oldfield v. Transamerica Life Insurance Co. of Canada<\/em>, 2002 SCC 22 (CanLII), [2002] 1 SCR 742<\/a>. The latter \u201cunworthy heir\u201d is enshrined contrary to sections 83.02<\/a> and 83.03<\/a> of the Criminal Code<\/em> on financing terrorism.<\/p>\n

The recent case McCorkill v. Streed, Executor of the Estate of Harry Robert McCorkill (aka McCorkell), Deceased<\/em>, 2014 NBQB 148 (CanLII)<\/a> outlined a new, third type of unworthy heir: a beneficiary \u201cwhose self-declared reasons for existence involve activities that constitute offences under Canadian criminal law and run contrary to Canadian public policy against discrimination.\u201d In McCorkill<\/em>, the Queen’s Bench of New Brunswick found a testator’s bequest to US-based white supremicist, Nazi organization National Alliance (NA) was void for being contrary to public policy and the Code<\/em>.<\/p>\n

The Court readily accepted that the NA disseminated \u201chate propaganda\u201d contrary to the public incitement of hatred and other hate promotion offenses found in sections 318 to 320.1<\/a> of the Criminal Code<\/em>. The NA’s expression and activities also contravened sections 15, 27, and 28 of the Canadian Charter of RIghts and Freedoms<\/em><\/a>, its protections against discrimination and for preserving the values of multiculturalism and gender equality. Finally, the NA’s actions clearly violated several international treaties Canada has ratified which promote equality and protect individuals against discrimination based on identifiable grounds such as race, religion, nationality, and sex. The Court also held that the NA’s actions generally contravened public policy against discrimination.<\/p>\n

The Court considered whether it should invalidate the testator’s gift to the NA on the grounds of the beneficiary’s illegality and actions contrary to public policy, thus frustrating testamentary freedom. The Respondent argued that court intervention would open the floodgates to frivolous estate litigation, would unduly limit testamentary freedom of private individuals, and that, even if the Court found the NA to be an illegal and discriminatory organization, there was no evidence to suggest that it would use its inheritance funds for these purposes.<\/p>\n

Finding against the Respondent, the Court decided that the beneficiary’s \u201craison d’\u00eatre\u201d violated the Criminal Code<\/em>, the Charter<\/em>, international conventions, and was contrary to public policy. The testator would have been aware of these facts, and thus, it could only be inferred that the deceased intended his funds to promote the NA’s illegal and immoral aims. The Court found that, while the bequest did not \u201cadvocate violence [on its face,] it would unavoidably lead to violence\u201d because its funds would be used to achieve the NA’s violent and hate-driven missions. Finally, the Court also countered the Respondent’s argument by arguing that allowing the testator’s gift would open the floodgates of gifts to illegal and immoral organizations whose core activities violate public policy.<\/p>\n

\u200d<\/p>\n

Discriminatory Thoughts, Not Actions<\/strong><\/h2>\n

The quotation in Rondel v. Robinson<\/em> is followed by: \u201cThe general rule of the common law is that in construing a will, the court must determine the testator’s intention from the words used in the will, and not from direct extrinsic evidence of intent.\u201d The case of Spence v. BMO Trust Company,<\/em> 2016 ONCA 196<\/a> raises such questions on the grounds of public policy: Is it open to the courts to scrutinize an unambiguous and unequivocal residual bequest in a will, with no discriminatory conditions or stipulations, if a disappointed beneficiary or other third party claims that the bequest offends public policy? In this instance, the court considered whether extrinsic evidence would indeed be enough to convince it to set aside a will, thwarting testamentary freedom.<\/p>\n

In Spence<\/em>, the decedent, Rector \u201cEric\u201d Emanuel Spence was a Black Canadian immigrant originally from Jamaica. He and his previous partner had two children, Verolin and Donna. After the couple separated, Veroli lived with her father in Canada, and Donna lived with her mother in England. Verolin and Eric Spence enjoyed a positive father-daughter relationship until Eric learned that his daughter was pregnant and that the father of her child was white. After this point, Eric and Verolin became estranged and Eric never met his grandson before his passing. In an affidavit, Verolin attested that Eric swore to his daughter he would \u201cnot allow a white man’s child in his house.\u201d In his will, Eric made a specific provision expressly excluding Verolin or her son from sharing any part of his estate on account of their estrangement.<\/p>\n

Verolin moved to have the court find Eric’s will void because it was contrary to public policy, alleging that Eric’s choice to exclude Verolin and her son from his will was racially-motivated. Witness affidavits also attested that Eric made his intentions clear that his choice to exclude Verolin from his will was due to her choice to have a child with a white person, even going so far as to explicitly say that his choice of testamentary dispositions was rooted in his desire to discriminate against Verlon \u201cbecause the father of her child was a white man.\u201d Verolin argued that disinheritance motivated by racial discrimination voided a will by reason of public policy.<\/p>\n

The trial judge held that the will on its face did not offend public policy. However, with regard to the extrinsic evidence Verolin and her witnesses presented to the court, the court found that Eric’s will violated public policy against discrimination and should be set aside. BMO Trust, whom Eric appointed estate trustee, appealed the decision. The Court of Appeal considered several issues raised on appeal, including the admissibility of extrinsic evidence and the proper limits on Eric’s testamentary freedom with regards to public policy concerns.<\/p>\n

Following the precedent set in Rondel v. Robinson Estate<\/em>, Verolin argued that the extrinsic evidence suggesting Eric’s true motives were not inadmissible because it did not relate to his testamentary intentions, but instead to his \u201cspecific discriminatory motive for disinheriting Verolin.\u201d Thus, read in the context of public policy concerns, the extrinsic evidence is admissible in supporting the argument that the will’s testamentary dispositions are rooted in racial discrimination.<\/p>\n

Considering the more fraught issue of circumscribing the boundaries of testamentary freedom, the Court acknowledged that, as affirmed by the common law, it should not interfere with testamentary autonomy lightly. Unlike some other provinces, Ontario’s governing estates legislation, the Succession Law Reform Act <\/em>(SLRA<\/em>)<\/a>, has no statutory duty for competent testators to provide in their wills for adult, independent children, as they do not meet the definition for \u201cdependent\u201d under the SLRA<\/em>‘s dependent relief protection. Thus, Eric was not legally obligated to bequeath any part of his estate to Verolin or her child. Inversely, Verolin had no legal entitlement to Eric’ estate.<\/p>\n

Considering whether it could set aside Eric’s will for contravening public policy against racial discrimination, the Court considered the impugned clause in his will. Eric wrote that he left nothing to Verolin or her son because \u201cshe has had no communication with me for several years and has shown no interest in me as a father\u201d. The Court concluded that, despite the extrinsic evidence suggesting the true root of these comments, this provision nonetheless suggested the \u201csentiments of a disgruntled or bitter father \u2026 not the language of racial discrimination.\u201d<\/p>\n

The court considered how, in previous cases of wills being set aside for policy concerns, testamentary gifts were given with conditions that would inevitably mandate the beneficiary to act in a way that would contravene public policy, such as change their faith in order to secure a gift, remain celibate, or commit a crime. Eric’s left no conditional gift to Verolin, such as having to disown her child in order to claim her testamentary entitlement, and thus did not require BMO Trust to act discriminatorily.<\/p>\n

The Court of Appeal even went so far as to say that, even if Eric’s will \u201cfacially offended public policy\u201d by explicitly disinheriting Verolin on the basis of racial discrimination, the Court would not be able to interfere with Eric’s testamentary freedom. The Court hypothesized that neither Ontario’s Human Rights Code<\/em><\/a> nor the Canadian Charter <\/em>would be able to justify interfering with this right, as both pieces of legislation touch public law and state action, not the private disposition of a testator’s property\u2014the \u201ccore aspect of testamentary freedom.\u201d Thus, the Court of Appeal concluded that the common law principle of testamentary freedom, while not unassailable, protects a testator’s \u201cright to unconditionally dispose of her property and to choose her beneficiaries as she wishes, even on discriminatory grounds.\u201d<\/p>\n

\u200d<\/p>\n

Discriminatory Actions<\/strong><\/h2>\n

In the same year as Spence<\/em>, the Ontario Court of Appeal heard Royal Trust Corporation of Canada v. The University of Western Ontario et al.<\/em>, 2016 ONSC 1143<\/a>, also concerning discriminatory conditional gifts in a testator’s will. In his will, Dr. Victor Priebe set up a university scholarship exclusively for \u201cCaucasian (white) male, single, heterosexual students\u201d and \u201csingle, Caucasian white girl[s] who [are] not a feminist or lesbian.\u201d Priebe’s trustee brought an application to the court for guidance on how to administer the bursary and whether to follow the testator’s instructions, including whether to set aside Priebe’s conditions or void the bequest entirely.<\/p>\n

The Court of Appeal followed guidance from Canada Trust Co. v. Ontario Human Rights Commission (C.A.)<\/em>, 1990 CanLII 6849 (ON CA)<\/a>. In this case, the Court set aside a scholarship which provided recitals for the scholarship’s eligibility based on race, religion, colour, origin, and citizenship. The trust excluded \u201call who are not Christians of the White Race, all who are not of British Nationality or of British Parentage, and all who owe allegiance to any Foreign Government, Prince, Pope, or Potentate, or who recognize any such authority, temporal or spiritual.\u201d The trust’s indenture also stated that \u201cthe Settlor believes that the White Race is, as a whole, best qualified by nature to be entrusted with the development of civilization and the general progress of the World along the best lines.\u201d The Court found the charitable trust to be void by reason of contravening public policy on account of discrimination.<\/p>\n

The Court followed this same guidance in Royal Trust<\/em>, finding that Priebe’s conditions were void on the basis of discrimination. Priebe had ostensibly envisioned such a determination during probate, so he included a provision in his will that, should the Court find the qualifications for his entitlement void on the basis of public policy, the “provision for such gift shall be deleted without prejudice to the remaining provisions of this paragraph 3(d)(ii).\u201d Thus, the Court was unable to direct the estate trustee to administer the trust under the cy-pres <\/em>doctrine. Instead, the charitable trust established by Priebe’s will was deleted wholesale.<\/p>\n

\u200d<\/p>\n

Takeaways on Testamentary Freedom<\/strong><\/h2>\n

What can this trio of cases\u2014McCorkill<\/em>, Spence<\/em>, and Royal Trust Corporation<\/em>\u2014tell us about the limits on testamentary freedom? The line between the court’s respect for testators’ rights to dispose of their private property as they wish, unencumbered by the opinions of judges, and the public policy interest in prohibiting bequests that would further immoral, discriminatory, and illegal activity is always fact and context-dependent. Typically, courts will give greater deference to \u201cfacially neutral\u201d testamentary gifts, even if extrinsic evidence suggests their discriminatory intentions over gifts with explicitly discriminatory, illegal, or immoral reasonings. Moreover, gifts with conditions that would oblige a beneficiary or trustee to act in a manner that would violate public policy are also not usually protected under testamentary freedom.<\/p>\n

Finally, gifts to publicly discriminatory or illegal organizations, rather than legal persons, have even fewer protections. Courts may be ready to collapse the distinction between the conditions given in a bequest for a fund’s purpose and the purpose and aims of its beneficiary organization. The courts have an overriding obligation to ensure that, while private property rights are respected, testators do not exercise these rights to further values contrary to public and constitutional law, as well as international human rights law. In order to ensure that the wishes you express in your will are properly executed, it is important to discuss with an estate planner the specific conditions indicated in your will.<\/p>\n","protected":false},"excerpt":{"rendered":"

What are the limits on testamentary freedom in Canada? Testamentary freedom is a fundamental right within the private law of succession, but it is not entirely unmitigated. Courts may consider a will’s violation of public policy for reasons of discrimination, immorality, and illegality. This article discusses some such examples.<\/p>\n","protected":false},"author":1,"featured_media":15957,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[],"acf":[],"yoast_head":"\nThe Limits Of Testamentary Freedom In Canada: Public Policy - Support Center US | Estateably<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/resources.estateably.com\/the-limits-of-testamentary-freedom-in-canada-part-i-public-policy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Limits Of Testamentary Freedom In Canada: Public Policy - Support Center US | Estateably\" \/>\n<meta property=\"og:description\" content=\"What are the limits on testamentary freedom in Canada? 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Testamentary freedom is a fundamental right within the private law of succession, but it is not entirely unmitigated. Courts may consider a will's violation of public policy for reasons of discrimination, immorality, and illegality. 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