Ontario Court of Appeal considers dependants' relief legislation

Dagg v. Cameron Estate | 2017 ONCA 366 | Ontario Court of Appeal

Estates and trusts --- Estates — Dependants' relief legislation — Miscellaneous

Deceased father SC was required by court order to maintain mother AC as irrevocable beneficiary on life insurance policy and to pay child and spousal support — Father's new partner ED applied under Succession Law Reform Act (SLRA) for dependants' relief — Trial judge determined that proceeds of policy were included in father's estate and available for dependants' claims under SLRA — Appeal judge dismissed mother's appeal — Mother appealed — Appeal allowed — Mother was entitled to payment of policy's proceeds to extent of father's support obligations existing at time of his death according to support orders in effect at date of death — Policy was transaction effected by father before his death within meaning of s. 72(1) of SLRA, so proceeds were deemed to form part of his net estate — Appeal judge erred in holding that mother did not fall within s. 72(7) of SLRA unless she was secured creditor with security interest in policy — Where beneficiary-designation order was made ancillary to spousal or child support order, support recipient was creditor of deceased support payor for purposes of s. 72(7) of SLRA — Where, at time of his death, spousal or child support payor owned insurance policy that was subject to court order requiring designation of support recipient as irrevocable beneficiary, s. 72(7) of SLRA protected from claw back in s. 72(1) of SLRA that part of policy's proceeds needed to satisfy payor's obligations to support recipients, calculated in accordance with support orders in place at time of death — By clawing back into father's net estate only that portion of proceeds of life insurance policy in excess of amount required to satisfy father's family law support obligations, funds may be made available to support other dependants while discharging existing support obligations — Full amount of policy's proceeds was not automatically excluded from claw back in s. 72(1) of SLRA.