What Wording In A Will Is Required To Create A Testamentary Trust? What Discretion Does A Trustee Of A Testamentary Trust Have To Distribute Or Not A Property Of The Trust To A Beneficiary ?

• Published date: 09 September 2021
• Subject Matter: Family and Matrimonial, Wills/ Intestacy/ Estate Planning
• Law Firm: Consultations M . Sklar Inc.
• Author: Mr Murray Sklar

INTRODUCTION

Wills are not always clear. What may appear to one person as an ordinary liquidation of an estate in favour of an heir may appear to someone else as the creation of a trust in favour of a beneficiary. Assuming a testamentary trust is created do the terms of the trust create a broad discretion for the trustee to delay transferring property to the beneficiary until certain conditions are met or must the trustee transfer the property of the trust to the beneficiary?

Such are the issues addressed in 2 related declaratory judgments involving the same person:

Corbin c. St-Pierre 2014 QCCS 2819, rectified on March 18 2015, rendered by Mme Justice Lalande of the Quebec Superior Court)("Case 1") and Corbin c. St-Pierre ( Succession de Lelièvre) 2021 QCCS 911, rendered on March 18, 2021 by Mme Justice Picard of the Quebec Superior Court ("Case 2")

CASE 1

Facts

Henri Lelièvre (Henri) was a French citizen having property in Quebec and France. He owned 4 multi-unit apartment complexes in Montreal/St Laurent on the following streets: Sainte Famille, Saint Timothée, Modugno and Saint Urbain. He also held a property in the Gaspésie.

He had a niece Marie-Hélène Corbin("Corbin") who moved to Montreal and a recently married spouse Chantal Aubry("Aubry"). He named his Quebec lawyer Me. St. Pierre as his liquidator(executor)and trustee under his Quebec will. There were other particular legatees named in the will for particular bequests but this article will confine itself to the main issue: Was a trust created under the will? In his Quebec will made in 2008 Henri stated in Article V111:

translation

I bequeath all my Canadian property listed below to my liquidator-trustee, in trust in the form a discretionary trust in favour of the following designated beneficiaries. I ask my liquidator-trustee to exercise his discretionary powers , by means of transactions chosen and approved by him, in such a way that the economic benefit and the direct and indirect ownership of the following property revert to the following persons:

Designated beneficiary: Corbin: : Property: Sainte Famille, Saint Timothée
(Corbin was also the beneficiary of a 3rd property-"La Forestière Trois Couronnes" which is not discussed in this article)

Designated beneficiary: Aubry : Property : Modugno and Saint Urbain

In case Aubry dies before me her part shall go to Corbin. In case Corbin dies before me her part shall go to Aubry.

I bequeath the rest of my property to Aubry.

Henri died in France in 2009.

Question in dispute

Corbin challenged the creation of a trust under Henri's will. In spite of the words used in the will referring to a trust Corbin felt that there was no intention by Henri to create a trust in his will but only an estate which had to be liquidated. In her view St. Pierre, as liquidator, only had the possession or "saisin" of the estate and his sole duty was to proceed to the liquidation of the estate by distributing the Sainte Famille and Saint Timothée properties to Corbin and the Modugno and Saint Urbain properties to Aubry. According to Aubry a trust was created under Henri's will. According to St. Pierre the words of the will were clear: a trust was created by Henri. The words used in the will show the clear intent of Henri to create a trust under his will.

St. Pierre felt that if there was any ambiguity in the will the goal of the court was to determine the intention of Henri at the time he wrote his will.

The judge's analysis

the judge quoted from a Supreme Court of Canada decision Métivier c Parent 1933 Canlii 70:

translation:

The Civil Code enacts certain rules for the interpretation of contracts (art. 1013 et seq.). The general rules set out in these articles apply, by analogy, to the interpretation of wills, except to take into account the difference between the contract and the will ....In any will, as in any contract, one must first seek the intention of the parties. This...