The late Robert Bruce “Rob” Ford was well known around the world as Toronto’s often controversial, but always popular, former Mayor.
Ford and his wife, Renata Brejniak, were married in 2000 and remained together until Ford’s recent death on March 22, 2016. As anyone who has suffered the loss of a loved one, Brejniak and Ford’s other family members are undoubtedly facing a difficult grieving process and may not be ready to think about much else. However, in addition to the coping with the loss of her husband and life partner, Brejniak will have to make some important decisions in the coming months to ensure her future financial security.
One of the most important financial decisions to make after the loss of one’s spouse may be whether to proceed with the distribution of the deceased’s assets pursuant to the terms of the will or elect to take under the Family Law Act so as to claim an equalization of net family property. Although discussions of equalization of net family property are most often associated with the breakdown of a marriage in the context of separation or divorce, a spouse’s right to equalization is also triggered by the death of the other spouse. A surviving spouse’s right to elect to take under the Family Law Act (FLA) can be crucial to his or her financial security in the event that the deceased has not adequately provided for the surviving spouse in his or her will.
Once a spouse elects under the FLA, he or she gives up all rights as a beneficiary of the will and relevant Ontario case law has not yet definitively settled the issue of whether or not the spouse can continue to act as estate trustee or executor once he or she decides to claim equalization. Nevertheless, equalization entitles a spouse to half of the net family property accumulated by the couple during the marriage and this may be result in an equalization payment in an amount that is significantly greater than the bequest set out in the will. It is also possible that the deceased spouse provided a much more generous bequest in the will than would result from equalization and, as such, a surviving spouse should seek professional assistance from a family lawyer to determine the amount of the equalization payment so as to make an informed decision as to how to proceed.
Surviving spouses like Renata Brejniak, whose late husband had a significant interest in a profitable family business or other corporate ventures, may discover after losing their spouse that a shareholder agreement or other binding document required the deceased to include terms in his or her will limiting the surviving spouse’s claim to the deceased’s interest in a corporation. If such limitations are set out in the will, the surviving spouse may find him or herself suddenly without an essential source of income. Although it is still possible to limit one’s FLA claim to interest in a corporation, the surviving spouse may have a much better chance of being compensated for such an interest under the FLA.
It is important to note that a surviving spouse must file an election within six months from the date of the deceased’s death pursuant to section 6(10) of the FLA and failure to do so will result in the spouse being deemed to have chosen to proceed under the will. Although there are limited circumstances in which an extension of this limitation period may be granted, surviving spouses should consider the risk that the deceased’s assets may be distributed after six months and it may be difficult to recover same once distributed.