An effective estate plan goes far beyond just creating a will. It should also include other important legal tools including powers of attorney (for personal care and for property), trusts, as well as the designation of beneficiaries on life insurance policies, pensions, and other key documents.
In a recent Ontario court case, despite an aunt’s estate plan over the use of her cottage, two siblings went to court over the enjoyment of her property.
Aunt Expresses Wish for Siblings to Enjoy Cottage
The siblings are brother and sister.
Their aunt owned a cottage property, which had been used by the family for over 60 years. The aunt had never married and had no children.
Because the aunt was living in a long-term care facility and was incapable of managing her affairs, the brother was her power of attorney for property. Additionally, the brother held the cottage property in trust for the aunt and is the sole beneficiary of the residue of the aunt’s estate when she passes away.
The aunt had originally transferred the property to the brother, but had indicated her wish for the entire extended family to use it for “years and generations to come”.
Siblings Share Use of Cottage for Numerous Years
Starting in 2009, the brother and sister, and their respective families, had enjoyed exclusive use of the cottage property. Both families also contributed to the costs of maintaining and caring for the property, including the costs of utilities, insurance and taxes.
The property haven fallen into disrepair, both siblings contributed to its renovation between 2009 and 2014. For this, the sister contributed between $75,000 and $135,000, while the brother contributed $15,000. The sister claimed that she contributed the funds because she had been promised continued use and part ownership of the property by the brother.
Brother Blocks Sister’s Access to Cottage
However, in 2020, the brother decided that he no longer wished to share the cottage property with his sister and her family. He claimed that this decision was based on, among other things, the sister’s alleged misuse of the property and her conflicts with neighbours.
Thus, on March 2, 2021, the brother advised his sister, through counsel, that she was no longer welcome to use the cottage property. Locks were changed and security cameras were installed.
Sister Goes to Court to Gain Access to Cottage
Subsequently, the sister commenced an action seeking a constructive and/or resulting trust in relation to the cottage property. In the alternative, she sought damages equivalent to one half of the value of the property.
On the motion before the court, while awaiting trial on the main action, the sister sought a certificate of pending litigation (“CPL”) on the cottage property, and interim injunction maintaining joint use of the cottage property pending determination of the action. In essence, a CPL puts an interim “freeze” on the affected property pending resolution of the main legal dispute.
While the cottage’s value was approximately $196,000 in 2008, it had since increased in value and was estimated to be worth approximately $1 million.
Court Provides Commentary on Basis of Dispute
Before addressing the legal issues at hand, the court offered its own commentary on cottage disputes in general and the nature of the siblings’ specific dispute, stating:
“Cottages often bring joy to generations of family members who seek summer refuge from city life. Children learn to swim and play outdoors. Adults gather to enjoy meals and activities from bonfires to horseshoes. Memories are formed and lives are lived.
As is often the case, some cottage properties are enjoyed by more than one family. The rules of joint use are often left up to tradition, not committed to writing and rarely discussed. Perhaps unsurprisingly, disputes arise over access to the property, financial contributions to maintenance and upkeep, and the use and misuse of the property. In most of these instances, adults, acting responsibly, settle their differences and move on.
However, in a few instances, idyllic cottage life turns irreparably sour. Stubbornness and spite take over. Litigation ensues and matters proceed to determination before the courts. In these cases, there is usually no clear winner. Everyone loses.
While it is too early to determine the ultimate path of this litigation, this may be one such case.”
Court Rules in Favour of Sister
On the sister’s first request for a CPL, the court found in her favour. It held that the cottage property was sufficiently unique to warrant issuance of a CPL and her claims for constructive trust appeared to have merit. Additionally, the court so held because the sister was seeking joint ownership and continued use of the property. Finally, the court saw no risk of harm to the brother if the CPL was granted.
The court also issued the interim injunction sought by the sister. It clarified that the injunction would uphold the status quo whereby both families could continue to use and enjoy the cottage property. As such, the court granted the brother and sister possession and exclusive use over a portion of the property.
In closing, the court stated:
“The parties are expected to cooperate fully and honestly to facilitate the implementation of this order. In other words, they need to act maturely and responsibly. They should not engage in efforts to undermine each other’s rights to use and enjoy the property. They should be accommodating of routine requests which have been part of the traditional use of the property, such as using water from the cottage by the road and the use of extra storage space.
The summer months are as short as they are precious. In a global pandemic, this is even more the case. I urge the parties to use this time wisely, enjoy the cottage property much like they have for over 60 years, and resolve their differences.”
In the result, the court therefore found in favour of the sister.
The best way to guarantee that your wishes will be carried out exactly as you would like them to is to consult with an experienced estate lawyer. At Campbells LLP in Oakville, our wills lawyers have been helping clients with Wills and estates matter since 1999. We will meet with you to help you clarify your long-term objectives and will create a personalized, effective estate plan designed to meet those goals. As your family grows or changes, we will ensure your estate plan is amended as required to ensure it continues to protect your ultimate objective.
At Campbells LLP, we are proud of the strong, long-lasting relationships we build with the clients for whom we craft Wills and estate plans. With our help, you can ensure that your family and loved ones are taken care of, that your wealth is distributed as you wish, and that the risk of any potential litigation is minimized. Our overall mission is to provide the right solution for each and every one of our clients. Contact us online or at (905) 828-2247 to learn more about our services.