Just Say "No": Acceptance Of A Secret Trust In Bergler v Odenthal

• Published date: 02 July 2020
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Trusts
• Law Firm: Bennett Jones LLP
• Author: Ms Barbara J. Kimmitt, Barbara Stratton, Brynne Harding and Nielsen Beatty (Summer Student)

In the June 2020 case of Bergler v. Odenthal, 2020 BCCA 175 [Bergler], the British Columbia Court of Appeal found that deathbed wishes created a "secret trust", which required the surviving common law spouse to hold the deceased's estate in trust for the deceased's niece. The secret trust also severed the joint tenancy of the defendant and the deceased in property they had purchased together, so that the property no longer passed to the surviving spouse by right of survivorship.

The Bergler case is a reminder that a surviving spouse, or any person who stands to inherit, should be careful before accepting requests from the dying person as to how to deal with his or her property. Sometimes, it is better to just say "no": verbally acquiescing or even the failure to say anything could mean the heir becomes a trustee for the benefit of someone else.

Secret Trusts

Secret trusts are rarely encountered but have a long history. A secret trust is an exception to the common law rule that any disposition on death must be by way of a will.

The two essential conditions for creating a secret trust are "communication of intention"'the request of the deceased person to his or her heir to hold or gift the property to a third party'and acceptance. The secret trust must also meet the usual trust requirements of certainty of intention, objects and subject matter.

Acceptance

In Bergler, evidence at trial had established clear communication of the deceased's intention to create a secret trust, which was not challenged on appeal. The focus of the appeal was the question of acceptance, which the defendant argued must also be clearly proven. The defendant argued that, absent a high evidentiary standard, "vulnerable or grieving spouses may find themselves susceptible to 'mischief, fraud and misery' on the basis...