Can A Family Law Act Election Be Revoked?

Pursuant to section 6 of the Family Law Act, when a spouse dies, the surviving spouse can elect to take their entitlement under the Will/Intestacy or pursuant to an equalization claim against the Estate.  The surviving spouse has 6 months from the spouse’s date of death to make an election, otherwise they will be deemed to have elected to take their entitlement under the Will/Intestacy.  

In Iasenza v. Iasenza Estate, the courts considered whether or not it was possible for a surviving spouse who had made an election, to subsequently revoke it?  

In Iasenza Estate, the Applicant filed an election to receive her interest from the Estate on an equalization claim,  based on incomplete information that she received regarding the Estate assets.  When the Applicant discovered the additional assets belonging in the Estate, she attempted to revoke her filed election.  

In considering whether or not a surviving spouse could revoke an election, the court referred to Re Bolfan Estate (1992), 87 D.L.R. (4th) 119, wherein the Honourable Justice Hawkins noted that the FLA expressly authorized the Court to grant relief against the consequences of a deemed election but stated that the Act was silent about relieving against the consequences of an actual election.  Justice Hawkins concluded by stating that the Court had no jurisdiction (express or inherent) to grant any relief against an actual election already filed.  

In Iasenza Estate, Justice Hackland refused to follow the decision in Re Boflan Estate. Justice Hackland acknowledged that there is no general right of revocation and a surviving spouse has no right to revoke an election, as such an approach would have the potential to prejudice the interests of third parties who relied on the election and would stand as a roadblock to the timely administration of estates.  However, Justice Hackland did state that the courts have a residual jurisdiction to authorize a revocation of an actual election in circumstances where the interests of justice require it and where the balance of the interests of effected parties clearly warrants it.  Justice Hackland stated that such discretion should be exercised in restrictive circumstances and the Court should have particular regard to the following: 

(a) Was the election filed as a result of a material mistake of fact or law made in good faith? 

(b) Was there any responsibility or culpability on the part of effected parties in relation to the election? 

(c) Was the notice of intent to seek revocation of the election given in a timely way and, in particular, how long after the 6 month filing period was such notice given? 

(d) Has the estate been distributed or would interested parties otherwise be adversely effected by a revocation of the election? 

(e) Does the election result in an injustice to the surviving spouse in all of the circumstances? 

In Iasenza Estate, Justice Hackland exercised the residual discretion of the court, justifying his decision on the grounds that at the time the election was made by the surviving spouse, there was a material misunderstanding or lack of knowledge as to what assets would form part of the estate.

Thank you for reading, 

Rick Bickhram

 

Planning for the Disposition of our Reward Points

With the various loyalty programs that are available today, many individuals have accumulated a significant quantum of frequent flyer points or other reward points.  These points can have significant value. 

In an article published by Forbes, Janet Novack, it considers the various ways that a person can pass on their air miles or other loyalty program points to their heirs.   In her article, she quotes Texas Tech Law Professor Gerry Beyer as saying, “the best approach is to start giving away miles you’ll never use, if the program permits such lifetime gifts.”   For instance, there are millions of people who don’t travel anymore for various reasons, the most common reason being that they have now become disabled. Under these circumstances, they should start transferring their miles now.   There are reward programs, including Southwest Airlines’ Rapid Rewards, that allows a person to use their rewards to purchase a ticket, which can be used by anyone.   This is an amazing incentive for the aging parent who could buy tickets for his her or her kids or grandkids to come visit.

 If you’re still enjoying your rewards you should look into the terms of the reward program to determine whether or not you can add another person to your account.  This would allow a secondary user to utilize your accumulated points after you have passed on.

 If your reward program prohibits another person from being added to your account, you should nevertheless have a list of all your reward programs, passwords and user names. Although adding a secondary user to your account may be prohibited, certain programs (i.e. Southwest Airlines’ Rapid Rewards and Best Buy’s Reward Zone) allows another person to log-on to your account and redeem your points after death.  This is important  information for your executor.

Each reward program has its own rules concerning whether the accumulated points can be transferred during a person’s lifetime or whether they can be specifically given away on death.  To avoid any disputes, concerning who is to receive the points and to avoid the necessity of any valuation of the points in the event that the points are not specifically disposed of, it’s important for estate planners, when talking with client’s to canvass whether the testator has reward points, and to determine the best method by which these points can be passed on.

Thank you for reading and until Wednesday,

Rick Bickhram