Judge Rejects Interim Support Claim in Estate Dispute
A recent motion heard by the Ontario Superior Court found that the amount of funds a long-time girlfriend of a deceased real estate developer had claimed for monthly income in addition to “interim support” on the estate she had an interest in were unreasonable. The court ordered a lower sum of support.
Following the death of a highly successful real estate developer (the developer), a dispute arose over the distribution of the man’s high-net worth estate (worth more than $200 million).
The developer had separated from his wife of more than 50 years and had been living with his girlfriend in a luxury condo at the Four Seasons Hotel in Toronto for more than a decade. Despite their lengthy co-habitation, the girlfriend had not been named in either of the two wills he had executed. Instead, he named his wife as executor and divided the residue of the estate between his two adult daughters.
After the developer’s death, the girlfriend filed a claim for ongoing support pending the resolution of the estate dispute. The court had already previously awarded her $900,000 for “interim support”, but she was now claiming monthly expenses of $122,000, in order to maintain the lifestyle she had enjoyed with the developer. She argued that she had been dependant on his income.
Defendant’s Support Claims
Dependant’s support claims are governed by s. 58(1) of the Succession Law Reform Act, which states that where a deceased individual has not made adequate provisions for the proper support of his or her dependants, the court can exercise its discretion to order whatever amount it considers adequate to be paid to those dependant’s from the deceased’s estate.
Factors that the court will consider in making such an order include (per s. 63 of the SLRA):
- the dependant’s current assets and means;
- the assets and means that the dependant is likely to have in the future;
- the dependant’s capacity to contribute to his or her own support;
- the dependant’s age and physical and mental health;
- the dependant’s needs, in determining which the court shall have regard to the dependant’s accustomed standard of living;
- the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
- the proximity and duration of the dependant’s relationship with the deceased;
- the contributions made by the dependant to the deceased’s welfare, including indirect and non-financial contributions;
- the contributions made by the dependant to the acquisition, maintenance and improvement of the deceased’s property or business;
- a contribution by the dependant to the realization of the deceased’s career potential;
- whether the dependant has a legal obligation to provide support for another person;
- the circumstances of the deceased at the time of death;
- any agreement between the deceased and the dependant;
- any previous distribution or division of property made by the deceased in favour of the dependant by gift or agreement or under court order;
- the claims that any other person may have as a dependant;
In addition, the person making the dependant’s support claim must establish, per s. 64 of the SLRA that they are
“in need of and entitled to support”.
In this case, To do so, the girlfriend needed to show she was a spouse of the developer; that the developer was legally obligated to provide support to her at the time of his untimely death; and there had been inadequate provisions for support available at the time of the motion.
Significant Expenses Claimed
At trial, the court found that the girlfriend’s records of monthly expenses were unsubstantiated and showed little financial or record keeping knowledge. For instance, she had asked for more than $30,000 a month for clothing, purses and shoes, and $1,700 a month for pet care, despite owning only one family dog. She had also requested more than $20,000 monthly for food.
As the court found:
As a result, I consider [the girlfriend’s] budget to be of no assistance. In addition, I do not consider it to be an accurate reflection of her actual monthly expenses. [The girlfriend] has little to no experience in managing money or preparing budgets. She stated in cross-examination that she kept no personal or financial records. The budget was composed by her without any reference to any specific documentation. She initially produced very few records. Although requested, she brought no documentation to her cross-examination. At one point during the cross-examination, counsel objected to producing records on the grounds that it was minutiae. While that may be an appropriate objection if the budget had a semblance of accuracy that is not the case here.
Although the court was convinced that the girlfriend had likely spent the initial $900,000 she had already received and was in need of further assistance, she was ultimately awarded $30,000 a month allowance, the court finding it do be a more accurate description of the monthly costs of the lifestyle she had lived with the deceased.
During the trial it was revealed that the girlfriend had previously worked as a real estate agent, but she had quit her job to live with the developer Since that time, she had been fully dependant on him for support and had grown accustomed to the life he provided her. She had estimated his net worth to be over $200 million, which the court did not dispute, but noted if that were the case, there were significant tax implications that would need to be addressed during the estate considerations.
This case provides s good overview of the factors courts may considers make when reviewing various claims for support, in this case, a dependant’s support.
Here, the rights of the dependant girlfriend to continue to receive financial support owing to her relationship with the developer were considered in light of the overall estate distribution, and the amount requested, and the amount ultimately determined as being a more reasonable estimate of what would be needed to continue to support the girlfriend.
The size of the amount claimed makes this case an important demonstration of the role of the court in determining the best interests for the estate, basing such decisions on current legal principles, rather than on a purely objective judgment to be applied generally irrespective of situational distinction.
If you or a loved one is in a dispute over an estate and are looking for legal advice on an equitable distribution of assets, or if you or a loved one are planning on the distribution of an estate in preparation for a future event such as a will, it is important to speak to a trusted legal advisor. It is usually best to plan an estate ahead of time, to foresee issues before they arise and have them handled according to the wishes of the grantor.
For assistance, Contact Mark Feigenbaum, Barrister and Solicitor online or call him at (905) 695-1269 or toll-free at (877) 275-4792