Court Asked To Determine Whether A Will Is A Trust

Written on behalf of Arbesman Hamilton LLP

In 2018 we wrote about a decision in which a judge found that a couple who had written both primary and secondary will’s did not have valid copies of the former due to their ambiguity. The use of a primary and secondary will (or “double wills”) can be used when a testator wishes to quickly dispose of some property in one will, while addressing the property or items that might take more time to work their way through the probate process in a second will. The decision  recently made its way through an appeal, and we wanted to be sure to share the updated news on this case.

Ambiguous primary wills

The husband and wife died on October 2, 2017. Each of them left identical primary and secondary wills dated May 10, 2016. The issue at trial was that the primary will “settled upon the executors all property owned by me at the time of death except…” with the wills going on to name a number of items. Meanwhile the secondary wills left all remaining property, but also said they covered “any other assets to be determined by the trustees.” The primary wills were found to be invalid since they failed to describe, with certainty, and property that was subject to them since the secondary wills allowed the trustees to move items from the primary will to the secondary.

The application judge also wrote, “A will is a form of trust. In order to be valid, a will must create a valid trust and must satisfy the formal requirements of the Succession Law Reform Act (‘SLRA’).”

On appeal

The executors of the estate appealed the application judge’s decision, raising two issues of appeal. The first was that the application judge erred in holding that a will is a trust. The second is that the application judge erred in using the “three certainties” to determine the validity of the will.

The court began its analysis by describing why people might want to use primary and secondary wills, citing Ontario case law that has confirmed their validity, writing,

“Because a testator often executes their Last Will and Testament several years in advance of death, it is often not practical to provide a definitive list of assets which will require or do not require a Certificate of Appointment to be transferred or realized at the time the Primary and Secondary Wills are executed. To overcome this practical problem, estate planning lawyers often provide estate trustees with the power to determine whether a particular asset requires a Certificate of Appointment upon administering the will. These clauses are often referred to as allocation clauses. The use of allocation clauses is a common estate planning technique.”

The court held that a discretionary allocation clause, as seen in the primary will, does not mean that the executor can exercise that clause in an arbitrary fashion. Instead, the executor must allocate property “in accordance with the standards applicable to a fiduciary.”

Furthermore, the court found no basis for the application judge’s statement that a will is a trust, and therefore the uncertainties which could invalidate a trust do not invalidate a will.

The best way to guarantee that your estate is handled
according to your wishes is to engage in proactive estate planning with the
assistance of an experienced lawyer. This includes writing a clear and concise
will, designed to avoid uncertainty and vagueness. Arbesman Hamilton LLP provides unparalleled personal guidance for
all of your estate
planning needs
. Please call us at 416-481-5604 or reach out to us online
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