A Deceased Spouse’s Estate Trustees may not Initiate an Equalization Claim

As awful as it is to consider one’s own demise, separating spouses should heed the decision in Bradford Estate v. Kingdon and protect their rights to an equalization of family property should they pass away during separation negotiations or divorce proceedings.

In this case, the husband and wife married in 2015 and separated in 2018. They owned their matrimonial home in joint tenancy. They began negotiations, through counsel, regarding property division. The husband’s last offer to settle was made in April 2020. Unfortunately, the husband died due to kidney failure in May 2020, a few months into the global COVID-19 pandemic. Upon his death, his interest in the home was transferred to his wife by right of survivorship.

The husband’s estate trustees claimed that the husband instructed his counsel to commence a family law application for equalization prior to his death. However, there was no evidence provided to the court that the application was drafted or that any efforts were made to have the materials sworn. In fact, the court confirmed that in March 2020, the Superior Court through its Notice to the Profession, announced that while there would be a suspension of regular operations the filing of materials during the relevant time period was not suspended.

The surviving spouse brought a motion for summary judgment seeking a final order dismissing the estate trustees’ application, arguing that there was no genuine issue requiring a trial. The wife put forth the position that her former husband’s estate should be prohibited from bring a family law application seeking equalization after his date of death, pursuant to the Family Law Act (“FLA”).

In order to defeat a motion for summary judgment, the responding party must put forward some evidence to show that there is a genuine issue requiring a trial rather than make “vague references” to what may be presented if the matter was allowed to proceed to trial.

In arriving at his decision on the issue of the equalization claim, Justice Labrosse stated that the husband’s Estate was prohibited from moving forward with the claim on his behalf for the following reasons:

• The right to equalization is a personal right between spouses – the husband could have brought a claim before his death;
• Section 5(2) of the FLA specifies that when a spouse dies, only the surviving spouse is entitled to equalization of net family property if their net family property is lower than their deceased spouse’s net family property;
• Section 6 of the FLA allows only a surviving spouse the right to elect under a will or to claim equalization under s.5 of the FLA; and
• Section 7 of the FLA allows a deceased spouse’s estate to continue a claim for equalization that was commenced before the spouse’s death, it does not allow for the estate to start an application.

This case demonstrates that failing to initiate an equalization claim to preserve the rights of the claimant upon their death can have significant implications for that person’s heirs.Connect with us today for questions and inquiries!