A recent Ontario Court of Appeal case, VanSickle Estate v. VanSickle, 2022 ONCA 643, serves as a reminder of the importance of having a well-drafted, up-to-date will. The potential impact that life’s changes can have on a person’s will and the impact of an out-of-date will on the administration of the testator’s estate and surviving family members can be devastating.
When interpreting a will, the Court must determine the testator’s intentions for the assets in their estate immediately before their passing, based on when the will was completed. This can be a difficult task if a will was made many years prior to the testator’s passing. Vansickle Estate highlights the need for individuals to regularly review and update their will to ensure it reflects their current wishes and intentions, taking into account present circumstances.
The Facts of the Case
When Dorothy VanSickle made her will in 1985, she likely had a clear vision of what her future would hold. She owned and operated a 66-acre hobby farm in the Township of Onondaga, in the County of Brant, and had a particular plan for the future of the farm and other assets among her seven children.
In her will, Dorothy directed that her estate trustee “shall sell the farming business carried on by me” to her son Howard for the price of $85,300 or for a lower price if the price of the hobby farm were to decrease. She also specified that “my farming business shall include all assets, stock, plant, liabilities, in connection therewith” and “the estate in fee simple of the farm.” The residue of Dorothy’s estate was to be distributed among her living children.
However, life can be unpredictable, and things can change. In 1994, Dorothy’s husband passed away, and from that time until her death in October 2019, Howard rented the hobby farm from his mother. For several years, Howard grew cash crops but eventually subleased the land to be farmed by others. Dorothy’s last three tax returns included a Statement of Farming Activities, which disclosed “rent” as her only revenue, suggesting an indication that she intended to continue farming in future years.
The Trial
Four of Dorothy’s surviving children sought an Order of the Court that would render Howard’s option to purchase the hobby farm ineffective. They argued that Dorothy had not been “carrying on” the business of farming for many years. This Order would have resulted in the hobby farm falling into the residue of Dorothy’s estate, with the value of the farm being shared equally among her surviving children.
The trial judge agreed with the four children and found that Dorothy had intended Howard to purchase an “active farming business involving the cultivation of crops and/or the raising of livestock.” As the hobby farm was being used for “the simple rental of farmland,” its use at the time of Dorothy’s death was inconsistent with Dorothy’s intention when she drafted her will.
Court of Appeal Overturns Trial Judge’s Decision
However, the Court of Appeal overturned the trial judge’s decision, ruling that he had “made an extricable error of law in failing to apply the presumptions of s.22 of the Succession Law Reform Act.” The Court of Appeal held that the correct interpretation was whether Dorothy was carrying on the business of farming immediately before her death, not whether she was carrying on farming in a similar fashion as when her will was made.
Considering that Dorothy owned the same hobby farm as described in her will, received income from the lease of the hobby farm, and declared farm income on her income tax return, the Court held that the only proper reading of the facts was that Dorothy was using her property to carry on the business of farming. Therefore, Howard was entitled to exercise the option to purchase the farming business from the Estate for $85,300. The Court of Appeal further commented that it was unclear whether Dorothy, at the time she prepared her will, intended to benefit Howard quite as much as she did. At that time, the farm was worth significantly less.
When a will is made many years prior to a testator’s passing, it can become very difficult and challenging to determine their true intentions for their property and assets. In this case, the estate and distribution of the hobby farm became a subject of dispute among Dorothy’s surviving children, and it was left to the Court to determine their mother’s true intentions for her property as of her death.
Consult the Lawyers at Duncan, Linton LLP in Waterloo for Reliable Advice on Estate Planning and Estate Disputes
To avoid such complications and family disputes, it’s essential to regularly review and update your will to ensure that it reflects your current wishes and intentions. It is also important to seek legal guidance when drafting or updating your will to ensure that it is properly executed and that your intentions are clearly expressed. Taking these steps can help ensure that your property and assets are distributed according to your wishes and that your loved ones are protected against lengthy and costly litigation. At Duncan, Linton LLP, our team of experienced wills & estates lawyers can assist in effective estate planning. To speak with a lawyer, please contact us online at [email protected] or by phone at 519-886-3340 to make an appointment.