The case of Robinson v. Morrell Estate might be every divorced person’s worst nightmare. Here is what happened. Ingrid Ostrum and Ezra Morrell divorced in 2007 after a six year marriage. They signed a separation agreement in which they both agreed to renounce and waive any claim that they had on each other’s estates. When they divorced, the agreement became part of the divorce settlement. However, in 2008 Ezra Morrell died in an automobile accident at the age of 31 without making a new will. His existing will left the residue of his estate to his former wife. You can see where this is going!
Ingrid Ostram decided that she would claim the residue under Ezra’s will. Ezra’s mother, Anne Robinson challenged her right to do so. In a chambers application, the judge ruled that the separation agreement did not revoke the will and that Ingrid was entitled to inherit the residue of the estate. Ms Robinson appealed that decision to the Nova Scotia Court of Appeal. The issue before Mr. Justice Oland was whether Ms Ostram was bound by contract law to renounce a gift under her former husband’s will.
The Court of Appeal took an exhaustive look at case law, including some English cases from the 1800s and some American cases. The Court first stated that “until the death of the testator, a person has nothing more than an expectancy and one cannot disclaim or renounce an interest in something to which he or she has no legal interest.” The Court said that when there is only an expectation, there is nothing on which a renunciation can “bite”.
Once Mr. Morrell died, Ingrid Ostram had a choice. The Court noted she chose not to renounce or refuse to take the residue of the estate. Anne Robinson argued that Ms Ostram shouldn’t get to choose: she was contractually obligated under the separation agreement to renounce any claim to her former husband’s estate. She further claimed that the agreement was a valid contract because it was supported by valuable consideration. However, the Court ruled “…the appellant has failed to produce any legal authority that a contractual promise to renounce, given for consideration before the death of a former spouse, binds a person to renounce a testamentary gift after his death.”
Justice Oland identified a further problem with Ms Robinson’s challenge. He noted that she was relying on contract law to make her case that Ms Ostram could not step away from her renunciation under the separation agreement. However, the Judge stated that “The parties to the contract were Ezra Morrell, and Ingrid Ostram, and its clause 2 states that its terms are binding on their heirs, administrators, executors, successors and assigns. The appellant was not a party to the separation agreement, nor is she one of the persons named under clause 2. Even if it had been determined that Ingrid Ostram was contractually bound to refuse the testamentary gift, there does not appear to be any privity of contract between the appellant and Ingrid Ostram which would allow the appellant to enforce clause 20 of the separation agreement.”
The Judge dismissed Ms Robinson’s claim and also ordered that she pay costs of $2000 to the estate.
What is the moral of this story? It is one of the oddities of Canadian law that existing wills are, with certain exceptions, invalidated by marriage, but not by divorce. Lawyers across Canada for generations have cautioned their clients that wills, generally speaking, are not revoked by divorce. (Note that the law in Nova Scotia changed after the time of Mr. Morrell’s death. Now, the Wills Act has been amended so that divorce will revoke a bequest to a testator’s former spouse.)
The law may vary province-by-province across Canada. For example, Alberta’s Wills Act states that marriage and entering into an adult Interdependent relationship will, in most circumstances, revoke a will, but that “ a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to…real and personal property.” Note too, that under the Alberta law, “A will is not revoked by presumption of an intention to revoke it on the grounds of a change of circumstances.” So, even though it may seem obvious that after a divorce, a testator intends to make a new will, good intentions are not enough. Therefore, prudence dictates that no matter where they live, divorcing parties should make new wills as soon as possible after a divorce. Most lawyers advise their divorcing clients to make new wills immediately. It is advice that should be heeded. If not, then a result like the Morrell decision could occur.
Adapted from the July/August issue of LawNow.