Testamentary Freedom And Policy Constraints

It is a hallmark of common law jurisdictions that testators have freedom of testamentary disposition, subject only to three exceptions. In other words, an individual may dispose of his or her property as he or she wishes, even if the manner of disposition is whimsical.

Inadequate Provision for Dependants

Most jurisdictions have legislation that provide a remedy when a testator has not provided for dependants in an adequate fashion. So, for example, if an individual disinherits a spouse or children whom he or she was obliged to support, that dependant may make an application to Court for an allowance to be made out of the estate.

Unworthy Heir

The second exception relates to the concept of an "unworthy heir". Typically, the unworthy heir would be a beneficiary who had murdered a testator or a terrorist group who would benefit from the testator's assets contrary to the Criminal Code.

Conditions that Violate Public Policy

Courts have also intervened where a testator attaches conditions to a gift that are void as a matter of public policy. These include:

Conditions in restraint of marriage; Conditions that undermine the parent-child relationship by disinheriting the child who resides with a parent; Conditions that disinherit a beneficiary based on religious faith; and Conditions that require or encourage a beneficiary to commit a crime or perform an act prohibited by law. A number of recent cases have cast doubt as to whether or not testamentary freedom has been further curtailed and the extent to which the public policy exception should extend. However, the Ontario Court of Appeal has now clarified the position in Ontario.

Public Policy Decisions in Canada

The leading authority on the doctrine of public policy is Canada Trust Co. v. Ontario Human Rights Commission also known as Re Leonard. In that case, the Ontario Court of Appeal considered that the terms of a Trust established by Reuben Wells Leonard was void by reason of public policy as declared in the Human Rights Code. The trust required that the recipient of a scholarship must be white,Christian, of British nationality or parentage and that only 25% of the recipients of the scholarships could be women. It contained inflammatory language regarding racial superiority.

The Court of Appeal held that the trust was premised on notions of racism and religious superiority, which contravenes public policy. The Court upheld the scholarship trust but removed all restrictions with respect to race, colour, creed, religion, ethnic origin and sex.

Racial Discrimination - Spence v. BMO Trust Company

The concept of racial discrimination was also raised in Spence v. BMO Trust Company. Verolin Spence and her minor son applied for a declaration that the Will of her late father, Rector Emmanuel Spence ("Eric"), was void, relying on Re Leonard. Eric's Will left all his property to his other daughter Donna...