An Estate Planning case that may go to the Supreme Court

The Court of Appeal released reasons for judgement late last month in a key case called Easingwood v. Cockroft. The deceased had been in a second marriage, and made a Power of Attorney (in favour of two of his children) in 2001 and his Will in 2004.

 

As his health declined in 2007, his two children took some estate-planning steps. They transferred most of his assets into a Trust, the terms of which were consistent with his Will. However, it left his Estate quite small. The main effect of the Trust was that the surviving wife could not challenge the Will, leaving her a very modest share of the large Estate.

 

The deceased died in 2009. The wife attempted to attack the asset transfers into the Trust, with the intention of returning the assets to the Estate, but she failed.

 

The Court, in denying her claim, essentially said that the asset transfers into the Trust were permitted under the Power of Attorney. 

 

This decision is significant, and I presume it may be appealed to the Supreme Court of Canada.

 

The surviving wife had been married to the deceased for twenty-nine years and had helped him in his business, and her share of the Estate was light. But the transfers, done by his two children under the Power of Attorney after he lost his capacity, prevented her from seeking a larger share of the Estate.

 

It is speculation but, on my reading, given the value of the assets transferred and the wife’s share of the Estate, she probably would have been given a higher portion under the Wills Variation Act. But these transfers left her with nothing to pursue.