Is Your Estate Entitled To Your Spousal Support Payments After Your Death?
Separation agreements can be a useful way for two people to establish their responsibilities to one another after their relationship comes to an end. Ideally, such an agreement will articulate these responsibilities in a way that is clear to all involved. However, as a case recently before Court of Queen’s Bench of Alberta demonstrates, ambiguity can sometimes be found in the most unexpected of places.
The husband and wife in the case were married in 1998 and separated in 2012. They entered into a separation agreement (the Agreement) in October 2014 and divorced in 2015.
The wife had been ill since 2011; however, the husband claimed he did not know the extent of her illness until years after the separation.
A Carefully Crafted Separation Agreement
The Agreement stated that the husband was to pay spousal support to the wife in the amount of $3,000 per month for five years (until October 1, 2019). The Agreement also stated that the husband would have an insurance policy in place to cover any spousal support obligations remaining should he die before the five years were up.
The Agreement also contained an “enurement clause”, language used to provide that the Agreement would continue to benefit the parties as well as their heirs, executors, administrators, successors, designates and assigns in the event of the death of the husband or wife.
The wife died on June 19, 2015. At this time, the husband had only made eight payments. The last payment made was on June 1, 2015. The daughter of the wife (not the husband’s daughter) sought to collect the balance of the payments set out in the Agreement, specifically $156,000.
The Husband’s Position
It was the husband’s position that the wife’s right to spousal support was extinguished upon her death and that spousal support by its very nature is only payable to a spouse. He argued that the wife’s death amounted to a material change in circumstances, and that the wife was no longer in need of spousal support since she had passed away.
The court first turned to the Supreme Court of Canada’s decision in Miglin v Miglin, which stated that separation agreements, while effectively contracts, have a lower threshold than traditional contractual doctrine due to the nature of the circumstances under which they are made.
The court agreed that case law supports the husband’s position that estates are not able to collect spousal support through a court order and that the right to spousal support dies when the spouse does. The court also referenced a Saskatchewan case that stated “The obligation to pay spousal support is ended when the beneficiary of that support dies. The concept is just basic common sense. Spousal support is used to maintain the payee spouse. The necessity of maintenance ends with the death of the payee. There appears to be no juristic or moral reasons to continue the obligation in the absence of any need.”
The Importance of Recognizing The Agreement
However, the court also pointed out the important distinction between a court order and a contractual agreement to provide spousal support. The Agreement, said the court, provides a juristic reason to continue the obligation to make support payments. The court stated that even though the enurement clause did not make it into the court order stemming from the divorce, it was still contractually agreed to.
The Agreement also contained a non-reviewability clause, which prohibits the husband’s attempt to vary the terms of the Agreement. The court found the Agreement to be comprehensive and negotiated with give and take from both sides. To take away some parts of it and leave others in would fail the objectives of the Agreement as a whole.
Finally, the obligation to make payments for five years means that the payments should not be tied to the wife’s need to collect them. She would not have been able to receive support had she have lived and continued to need it. Additionally, the husband would have had to continue to make payments even if the wife had won the lottery.
The court ruled in favour of the daughter, ordering the husband to continue to make spousal support payments as outlined in the Agreement.
Spousal support disputes can be one of the most contentious aspects of a separation or divorce. At Arbesman Hamilton LLP we undertake a pragmatic approach to family law issues, including spousal support. We help our clients focus on the big picture and their goals for the end of the process. We avoid unnecessary actions and the costs associated with them while protecting our clients’ rights and interests. Contact us online or by phone at 416-481-5604 to schedule your consultation today.