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.