As Justice Dunphy queried to start Milne Estate (Re), 2018 ONSC 4174, “[i]s a will that grants the executors the discretion to determine what property is subject to the will a valid will?”
For the reasons that follow, the answer is no.
Background
John Douglas Milne (“John”) and Sheila Marlyn Milne (“Sheila”) both passed away on October 2, 2017.
John and Sheila each left behind two essentially identical Primary and Secondary Wills (the “Wills”, collectively) dated May 10, 2016. The Wills appointed John and Sheila’s daughter, Laurie Ann Milne, their accountant, Sylvia Webb, and their solicitor, Brett D. Murray, as executors of their estates. The Secondary Wills expressly did not revoke the Primary Wills.
John and Sheila, unfortunately, got into trouble with their estate planning with how they attempted to settle their property in the Wills. The Primary Wills, on the one hand, provided that:
…all property owned by me at the time of my death EXCEPT…[certain named assets and] any other assets for which my Trustees determine a grant of authority by a court of competent jurisdiction is not required for a transfer or realization thereof.
The Secondary Wills, on the other hand, provided that:
…all property owned by me at the time of my death INCLUDING…[certain named assets and] any other assets for which my Trustees determine a grant of authority by a court of competent jurisdiction is not required for the transfer or realisation thereof.
On October 17, 2017, John and Sheila’s chosen executors commenced two identical “Applications for Certificate of Estate Trustee with a Will (Individual Applicant) Limited to the Assets Referred to in the Will” at the Ontario Superior Court of Justice. The aforementioned “Will” in the two applications referred to John and Sheila’s Primary Wills. Each application was accompanied by an affidavit from Brett D. Murray which certified that the Primary Wills were in force and indeed had not been revoked by the Secondary Wills.
On January 24, 2018, the two applications came before Justice Dunphy. The applications, however, were not approved at that time as his Honour was not satisfied that the Primary Wills could be proved absent the Secondary Wills given that it appeared that the Milnes’ estate trustees could decide what assets were to be excluded from the Primary Will based on the language contained therein. An oral hearing to flesh out the ambiguity was scheduled for June 15, 2018.
Issue
The sole issue that was to be decided by Justice Dunphy in this case was whether or not John and Sheila’s Primary Wills were valid. The question as to the Primary Wills’ validity arose out of the perceived uncertainty surrounding the subject-matter of the trust created by the Primary Wills (i.e. it was not clear what property of John and Sheila’s was subject to the Primary Wills given the discretionary language employed in same).
Analysis
A will, as Justice Dunphy reminded the reader, is a form of trust. In order to be valid, a will must:
1. Create a valid trust; and
2. Satisfy the formal requirements of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (“SLRA”).
As there was no real issue here with regard to the Primary Wills’ compliance with the SLRA, the analysis shifted to what constitutes a “valid trust”. In order for a given trust to be valid, it must satisfy the “three certainties”:
1. Certainty of intent to create a trust;
2. Certainty as to the subject-matter or property committed to the trust; and
3. Certainty as to the objects of the trust or the purposes to which the property is to be applied.
There was no evidence before the court to suggest that either of the first or last of the three certainties had not been satisfied. The fate of John and Sheila’s Primary Wills, then, turned on the second of the three certainties: certainty of subject-matter.
For their part, John and Sheila’s executors argued that there was no uncertainty as to the subject-matter in this case as in their view each of the Primary Wills sufficiently defined what assets were to be excluded. In other words, the executors submitted that there was no discretion here to be exercised as the language of the Primary Wills compelled the estate trustees to determine which assets did not require a Certificate and those assets would then simply not be governed by the Primary Wills.
Unfortunately for John and Sheila’s executors, Justice Dunphy did not agree. His honour refused to find valid a will that conferred upon an estate trustee the discretion to determine retroactively what if any assets are subject to it. As his Honour held at paragraph 23 of his decision:
The testator must settle upon the Estate Trustees assets that are specifically identified or are objectively identifiable by reference to the intention of the testator and not the subsequent decision of the Estate Trustees [emphasis in the original].
Moreover, his Honour held that the fundamental problem with the executors’ position was that the Primary and Secondary Wills overlapped entirely in that each of the Secondary Wills applied to virtually all of either of John or Sheila’s property with no exclusions. As his Honour observed at paragraph 26:
The Primary Wills seek to carve out a viable subset of the property that is and remains subject to the Secondary Will without subtracting such property from the secondary estate and to do so based upon the subsequent, subjective determinations of the Estate Trustees as to what is desirable. In my view, this cannot be done.
Disposition
Justice Dunphy ultimately held that the Primary Wills were invalid as they failed to describe with certainty any property that would be subject to them. As such, his Honour directed the Registrar not to accept the two Primary Wills for probate. However, as neither of the Secondary Wills suffered from this defect, his Honour noted that the Secondary Wills could be submitted for probate if so desired.
Conclusion
Employing multiple wills in one’s estate planning is, and in the words of Justice Dunphy, “a quite common and normally unobjectionable estate planning tool”. However, employing multiple wills does not exempt one from the three certainties. Take head, future estate planners.
[1] For an additional analysis of this case, please read Justin de Vries and Jacob Kaufman’s blog post on allaboutestates.ca here.
