How spousal survivorship rights work with property

Q: Ed, I read with interest, February 2018 article where you stated “If you die, your spouse cannot take legal steps on your estate’s behalf. This is only the job of an executor/estate trustee”.

My mother passed away 10 years ago this March and she had been married to my step-father for approximately 35 years.
My mother went into that relationship with a little bit of real estate she inherited from her parents and had always stated that property was going to belong to we surviving children.

I haven’t had any contact with my step-father since my mother’s funeral (family dynamics let’s say) and I discovered that he sold this property last summer and that he had put the property in his name a few months after she passed away.

So, your article intrigued me in that my step-father was able to dispose of the property seeing as I was always under the impression that surviving spouses can do what they wish, as, well, surviving spouses. The decade-long time span probably doesn’t help my situation either, I’m sure. Please shed a little light on the legal rights that may have been ignored, and perhaps recommend the professional I should be taking this up with (such as making a claim against his estate when he passes away?  He’s now in his 80’s…..).

— Brenda

A: Brenda, when your mother died, her estate was frozen. Both her will and estate property were controlled by her executors. Only executors can sell or transfer your mother’s estate property. Your mother may have also had other assets that were not controlled by her executor. They were, however, part of her “estate pie,” as I’ll explain.

Everyone has what I call an “estate pie.” Everything you own fits into this pie. Why is it a pie? Because everyone wants a slice of your pie. This is especially true for income and probate tax slices. I’ll explain each type of pie slice below. Most people have three kinds of assets in their estate pie. Two of these are designated assets (life insurance and pensions) and joint assets, usually with rights of survivorship (bank accounts and real estate).

Will Assets is the third category of pie assets. What are will assets? You guessed it: everything else that is not designated or joint are will assets. Only will assets are normally frozen on your death. These will assets constitute your mother’s estate controlled by her will and executor. If you are single, your estate pie may not have all three types of assets.

Designated assets have designated beneficiaries. They are controlled by contracts and not by wills. You may not remember this, but when you bought life insurance or opened registered savings plans, you were asked who receives these particular assets upon your death. You normally designate beneficiaries by your contract (not by your will). Designated assets are not usually subject to probate taxes. What if you do not name beneficiaries?

Designated assets with no named beneficiary go to your estate. Estate assets become will assets and are controlled by your executor named in your will.

Jointly owned assets usually also have rights of survivorship. Your mother’s home could have been jointly owned with her husband. On her passing, he automatically became the sole owner of her home. That is the normal presumption with spouses.

Other factors can change this presumption of survivorship. These factors may include your mother:
1. Signing a marriage or domestic contract with her spouse.
2. Making promises to you.
3. Referring to the property in her will.
Promises must be in writing. Did you rely on your mother’s promise to your detriment? Is there any contract that confirms your gift or requires her husband to leave you anything?

You mentioned this happened 10 years ago. Claims to real estate often can be made years later. At this stage, you need to speak to an estate litigation lawyer to confirm if your rights have expired.

Ed Olkovich is a Toronto lawyer and certified specialist in Estate and Trusts Law

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