CANADA Law and Practice Contributed by: Ian M Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
Equalisation claims may also be resolved by settle- ment between the surviving spouse and the deceased spouse’s estate. In Gibbons v Livingston , 2018 BCCA 443, the court upheld a mediated settlement between an estate trustee and a common-law spouse, finding that the outcome aligned with family property rights. Settlement may be attractive where the surviving spouse’s entitlement to equalisation would otherwise be difficult to establish. 4. Marital Property and Succession 4.1 Property Regimes During Life and Deathtime Rights and Protections In all Canadian jurisdictions, married spouses have enforceable rights in family property, including assets accumulated during the spousal relationship, subject to certain statutory exemptions. During the spouses’ lifetimes, separation generally entitles a married spouse to an equalisation of net family property, typically amounting to one half of the marital property. The matrimonial home is ordinarily included in the family property regime, even if it was owned by one spouse before the marriage. While both spouses are alive, one spouse may not transfer or encumber the matrimonial home without the written consent of the other, unless a court dis- penses with that requirement. Restrictions on the transfer of other forms of matrimonial property are generally less stringent. However, transfers made as gifts, for no consideration, or for inadequate consider- ation to defeat a property division claim may be chal- lenged, although statutory remedies are often subject to limitation periods. In Manitoba, Saskatchewan and Alberta, for example, the courts may order the return of the property, grant judgment against the transferor, or include the property in the transferor’s share of the property on division. Alternatively, in Ontario, a spouse who transfers prop- erty may be deemed to continue owning the property for the purposes of a matrimonial property claim, and be required to share its value through equalisation.
Property rights may change on death. In most prov- inces, a surviving spouse may choose either to inherit under the deceased spouse’s will or to elect an equali- sation payment. This election may be advantageous where the will provides the spouse inadequate finan- cial support. Where the deceased spouse transferred property before their death without the surviving spouse’s con- sent, three principal mechanisms may permit recov- ery – statutory clawback provisions in family property legislation, applications by the surviving spouse for property division following death, and claims under fraudulent conveyances legislation. Fraudulent con- veyance claims may be difficult to establish, how- ever, as they require proof of intent. In Mawdsley v Meshen , 2012 BCCA 91, for example, the claim failed because the surviving spouse could not establish that the deceased intended to deprive him of a remedy. The availability of clawback remedies varies provin- cially, and may also be constrained by statutory limita- tion periods. The surviving spouse will bear the burden of proving that the transfer dissipated matrimonial property, or was made for inadequate consideration with the intention of defeating the spouse’s claim. 4.2 Prenuptial and Postnuptial Agreements Prenuptial and postnuptial agreements addressing estate and succession planning rights are generally enforceable in Canada, even where they do not com- ply with provincial or territorial wills legislation. Mar- riage contracts can survive death and be enforced by or against the estate of the deceased. Such agree- ments may address the division of property on death, releases of estate claims, and waivers of succession rights. Courts tend to interpret these agreements restrictively, particularly clauses purporting to waive a spouse’s rights on intestacy. To be effective, the agreement must contain clear and explicit language relinquish- ing substantial succession rights, so that the parties understand the rights being relinquished. To be enforceable, prenuptial and postnuptial agree- ments must also satisfy statutory requirements, typi- cally articulated in family law legislation. Agreement
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