Estate planning becomes critically important when a couple is going through a separation or a divorce. It is imperative that both parties take immediate steps to change their Wills and Powers of Attorney, in addition to beneficiary designations on their life insurance policies, pensions, and registered plans. For if one party dies after a separation, and the deceased party has failed to amend his or her estate plan before their death in accordance with their new separated status – they are likely to roll over in their grave at what may occur as a result of their oversight.

Mr. and Mrs. Makarchuk were separated, but not divorced. Six months before they separated, Mr. Makarchuk made a Will appointing his wife as his executor and the sole beneficiary of his estate. Subsequent to their separation, Mr. and Mrs. Makarchuk entered into a separation agreement that provided “subject to any additional gifts from one of the [spouses] to the other in any Will validly made after the date of this agreement” the spouses both released any rights they may acquire “under the laws of any jurisdiction in the estate of the other…”

When Mr. Makarchuk died a dispute arose as to whether Mrs. Makarchuk was entitled to receive the estate pursuant to her husband’s Will, and act as his executor. Their son argued that Mrs. Makarchuk had no entitlement to the estate as the separation agreement acted as a waiver to any rights that she might have. Mrs. Makarchuk argued that there were only three ways that the provisions in her husband’s Will could fail: (1) through her husband making a new Will; (2) through her husband marrying someone else; or (3) in compliance with the provisions of s. 15 of the Succession Law Reform Act, which sets out the formal requirements when revoking a Will.

Ultimately, the Court found in favour of Mrs. Marachuk. The Court determined that the language in the separation agreement that referred to the release of “rights acquired under law” did not apply to those rights acquired under her husband’s Will. Accordingly, the Court found that the language in the separation agreement did not trump Mrs. Makarchuk’s rights under the Will and she was entitled to take as the Will provided.

As evidenced above, there is an obvious intersection between estates, trusts, and family law issues. Separating and divorcing parties should seek the advice of an experienced estate planner as soon as possible in order to avoid the possibility of having an ex-spouse make decisions regarding their personal and financial well-being, or worse, leaving or part of their estate to their ex-spouse in a prior Will.

To read the complete article, see the latest edition of Estates & Trusts Legal News.