Failure to Launch: Adult Dependents and their Estate Rights
In Canada, individuals are generally allowed to leave their estates to whomever they wish, with some exceptions. One such exception is where the deceased had an obligation to support another individuals, such as a spouse or dependent child. Interestingly, in Ontario at least, ‘dependent child’ seems to be a growing class of individuals.
Historically, we think of dependent children as being minors – those under the age of 18 or 19. Over time, with increased time spent on post-secondary education, we grew to accept that a child can remain financially dependent on their parents well into their early adulthood. Now, in Ontario at least, it turns out, there is no limit to when an adult child could be considered dependent. This was confirmed this year in the Ontario case of Shafman v Shafman, in which a 67-year-old man made a successful dependent’s support claim from his mother’s estate.
Herbey Shafman had been left various income streams from his late mother that amounted to $1,730.29 per month. The remainder of his mother’s estate, worth approximately $3 million, went primarily to Herbey’s two brothers. This was done because Herbey, who had never been able to remain gainfully employed, would have squandered any inheritance he received “in a quick and foolish manner.” Before her death, the mother had supported Herbey with monthly funds, by purchasing him a house (which he later sold), and through daily meals at her house. The impression left by the mother’s explanatory letter to her estate was that she considered Herbey a failure and a disappointment but that she did not want him to lack the necessities of life.
Herbey did not consider his monthly stipend to be sufficient and made a dependent’s relief claim for additional funds. The court agreed. It found that Herbey was financially dependent on his mother at the time of her death and that between his income stream and other government benefits, he was still short approximately $1,000 per month. The court then ordered that Herbey receive an extra $1,250 per month from the estate, indexed for inflation.
The interest thing about these adult dependent’s support claims is that there’s no fault or culpability analysis. The law does not require that the adult child be dependent for some reason outside of their control. In this case it seemed for all purposes that Herbey was an effective deadbeat, who continued to benefit from his mother’s generosity long after her death to an extent that she herself did not wish him to benefit. The court also did not consider the unfairness of the fact that Herbey had already received significantly more money from his mother during life than either of his two brothers.
This decision may not sit well with many individuals, especially parents. It does however serve as a good warning in estate planning: if you can’t cut them off during life, you won’t be able to do so after death.
Solus Trust Company (“STC”) provides services in the provinces of British Columbia, Alberta, Saskatchewan, and Ontario. Raymond James Trust (Québec) Ltd. (“RJTQ”) provides services in the province of Québec. Services provided by Solus Trust Company and RJTQ are not covered by the Canadian Investor Protection Fund. STC and RJTQ are affiliates of Raymond James Ltd.