Re Unger Estate[1] is yet another case that addresses the question who is entitled to inherit when one person kills another feloniously. Ms Unger, a widow, had two sons, Clayton and Logan. She died in 2016 and Clayton pleaded guilty to the charge of second-degree murder of his mother. He was convicted and sentenced to a life term of imprisonment with eligibility for parole after 10 years. Under the public policy rule often referred to as the ‘slayer rule’ this meant that he would be unable to inherit from his mother. For, as MacKinnon ACJO stated in Demeter v Dominion Life Assurance Co,[2] ‘[t]he basic rule of public policy which is not disputed is that the courts will not recognize a benefit accruing to a criminal from his crime’. Indeed, in 2018 Clayton voluntarily disclaimed his interest in his mother’s estate. Clayton and his common law relationship conceived a child, Adeline, who was born 11 days after Ms Unger’s death.
The terms of Ms Unger’s will as described in the reasons for judgment are not entirely clear. She left the residue of her estate in trust equally to her two sons, apparently to be paid to them at age 30. However, she stated that if either predeceased her, leaving one or more children who were alive on her death, the deceased son’s share should be divided among his children. Further, she provided that if any part of her estate ‘should fail to vest in anyone’, that part of the estate should be paid to two charities in equal shares.[3]
Ms Unger’s estate consisted of her home and various personal assets. She also held a Personal Retirement Savings Plan and a Spousal Retirement Savings Plan, held by TD Canada Trust. Clayton and Logan were the designated beneficiaries of both plans. TD Canada Trust paid 50% of each to Logan and the other 50% to the estate. Further, Ms Unger owned an RRSP and Tax-Free Savings Account with another financial institution, and she designated both sons as the beneficiaries. That institution also paid 50% of each to Logan and 50% to the estate.
The executors brought an application for advice and directions about the disposition of Clayton’s share of the estate. The court therefore discussed some of the leading cases that have applied the public policy rule. It noted that there are two lines of cases. One denies the criminal the right to inherit from the deceased; the other goes further and holds that the rule should be applied to deny the right to inherit also to all persons claiming through or under the criminal.[4] Thus, the question became whether Clayton’s share and the accounts should go to Logan, Adeline, or the two charities.
Also relevant was s 46 of the Wills, Estates and Succession Act.[5] It describes what should happen to a testamentary gift that is incapable of taking effect. Section 46(1) provides:
If a gift in a will cannot take effect for any reason, including because a beneficiary dies before the will-maker, the property that is the subject of the gift must, subject to a contrary intention appearing in the will, be distributed according to the following priorities:
(a) to the alternative beneficiary of the gift, if any, named or described by the will-maker, whether the gift fails for a reason specifically contemplated by the will-maker or for any other reason;
(b) if the beneficiary was the brother, sister or a descendant of the will-maker, to their descendants, determined at the date of the will-maker’s death, in accordance with section 42 (4) [meaning of particular words in a will];
(c) to the surviving residuary beneficiaries, if any, named in the will, in proportion to their interests.
The court concluded that since Clayton was prevented from inheriting his share in Ms Unger’s estate because of the public policy rule, that share should pass to Adeline. First, because Ms Unger’s clear intention was that if either son predeceased her, any children of the deceased son who survived Ms Unger should take his share, and that right extends also to a child conceived before and born after Ms Unger’s death, because the will speaks of the children of the predeceased child. And second, because Adeline was a substitute or ‘alternate’ beneficiary to Clayton in the words of s. 46(1)(a), whereas Logan was not. Only if Adeline’s share failed (which it did not) would it pass to the charities named under the ultimate gift over. Moreover, Adeline was not claiming through or under Clayton, but under Ms Unger’s will.
There was still a problem in that, on a strict construction of the will, the gift over to Adeline could not take effect since it was contingent on Clayton having predeceased his mother, which did not happen. On this point the court referred to Re Bowlen Estate[6] which involved similar facts. In that case the court held that the share of the daughter who murdered her parents did not pass to her brother, but to her three children, who were named as substitute beneficiaries. However, while the daughter’s children were named substitute beneficiaries in Bowlen, the court held that they could not take under the will, since the condition precedent that the daughter predecease her parents was not satisfied. Since the gifts were residuary there was therefore an intestacy and the daughter’s children were entitled to take their mother’s half of the estate under the intestacy rules. That being so, quaere whether Bowlen was the right case to apply
In Re Unger the court seems to have accepted the submission of the executors and the similar submission of the PGT that it should do its best to ensure that the testator’s wishes are not defeated. They would be defeated if the court applied a strict construction to the gift over. If it did, the testator would not only have suffered ‘the indignity of murder but also the affront of the defeat of her obvious testamentary intention’. This is in fact a direct quotation from the judgment of Southin J in Dhaliwall v Dhaliwall, in which her Honour directed that the children of the criminal were entitled to take even though the criminal had not predeceased the testator.[7] The court does reproduce this quotation at para 58 of the Unger reasons but does not expressly follow it, which is regrettable. Regardless, the court held that Adeline was entitled to Clayton’s share.
In any event, could the court not simply have relied on the opening clause of s. 46(1), which says, ‘If a gift in a will cannot take effect for any reason …’?[8] Arguably, it overrides language such as ‘if my son predeceases me’. Quaere also whether we should perhaps change our wills precedents from ‘if my son predeceases me’ to ‘if my son’s share cannot take effect for any reason’?
The result was different for the accounts. Section 46(1) of WESA obviously did not apply to them. The court held that Clayton’s 50% share of the proceeds should be paid by the estate to Logan. This may be correct, depending upon the wording of the beneficiary designations. The case does not quote them expressly. But it seems to me that if the two sons were each given a 50% share and there was no gift over to the other if one was unable to take his share, the failed share should form part of the estate.[9]
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[1] 2022 BCSC 189, 74 ETR 4th 34.
[2] (1982), 35 OR (2d) 560 at 562, quoted in Oldfield v Transamerica Life Insurance Co of Canada, 2002 SCC 22 at para 14.
[3] If the gifts were not to be paid to the sons until they reached age 30 and there was no gift over if they failed to reach that age, the gifts would offend the rule in Saunders v Vautier (1841), 4 Beav 115, 49 ER 282 (Rolls Ct), affd (1841), 1 Cr & Oh 240, 41 ER 482 (Ch) and the sons would have been able to claim the property when they reached the age of majority. However, it may be that the gifts over described above (to the children of a deceased son, and failing any to the charities) served to avoid the rule.
[4] Cleaver v Mutual Reserve Fund Life Assn, [1892] 1 QB 147 (CA).
[5] SBC 2009, c. 13 (‘WESA’).
[6] 2001 ABQB 1014.
[7] 1986 CarswellBC 235, para 26.
[8] Emphasis supplied.
[9] For a more detailed discussion of the slayer rule, see Oosterhoff on Wills, 9th ed by Albert H Oosterhoff, C David Freedman, Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters, 2021) §12.4. And see also Oosterhoff on Trusts, 9th ed be Albert H Oosterhoff, Robert Chambers, and Mitchell McInnes (Toronto: Thomson Reuters, 2019) §11.5.2.
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Written by: Albert Oosterhoff
Posted on: August 29, 2022
Categories: Commentary
Re Unger Estate[1] is yet another case that addresses the question who is entitled to inherit when one person kills another feloniously. Ms Unger, a widow, had two sons, Clayton and Logan. She died in 2016 and Clayton pleaded guilty to the charge of second-degree murder of his mother. He was convicted and sentenced to a life term of imprisonment with eligibility for parole after 10 years. Under the public policy rule often referred to as the ‘slayer rule’ this meant that he would be unable to inherit from his mother. For, as MacKinnon ACJO stated in Demeter v Dominion Life Assurance Co,[2] ‘[t]he basic rule of public policy which is not disputed is that the courts will not recognize a benefit accruing to a criminal from his crime’. Indeed, in 2018 Clayton voluntarily disclaimed his interest in his mother’s estate. Clayton and his common law relationship conceived a child, Adeline, who was born 11 days after Ms Unger’s death.
The terms of Ms Unger’s will as described in the reasons for judgment are not entirely clear. She left the residue of her estate in trust equally to her two sons, apparently to be paid to them at age 30. However, she stated that if either predeceased her, leaving one or more children who were alive on her death, the deceased son’s share should be divided among his children. Further, she provided that if any part of her estate ‘should fail to vest in anyone’, that part of the estate should be paid to two charities in equal shares.[3]
Ms Unger’s estate consisted of her home and various personal assets. She also held a Personal Retirement Savings Plan and a Spousal Retirement Savings Plan, held by TD Canada Trust. Clayton and Logan were the designated beneficiaries of both plans. TD Canada Trust paid 50% of each to Logan and the other 50% to the estate. Further, Ms Unger owned an RRSP and Tax-Free Savings Account with another financial institution, and she designated both sons as the beneficiaries. That institution also paid 50% of each to Logan and 50% to the estate.
The executors brought an application for advice and directions about the disposition of Clayton’s share of the estate. The court therefore discussed some of the leading cases that have applied the public policy rule. It noted that there are two lines of cases. One denies the criminal the right to inherit from the deceased; the other goes further and holds that the rule should be applied to deny the right to inherit also to all persons claiming through or under the criminal.[4] Thus, the question became whether Clayton’s share and the accounts should go to Logan, Adeline, or the two charities.
Also relevant was s 46 of the Wills, Estates and Succession Act.[5] It describes what should happen to a testamentary gift that is incapable of taking effect. Section 46(1) provides:
If a gift in a will cannot take effect for any reason, including because a beneficiary dies before the will-maker, the property that is the subject of the gift must, subject to a contrary intention appearing in the will, be distributed according to the following priorities:
(a) to the alternative beneficiary of the gift, if any, named or described by the will-maker, whether the gift fails for a reason specifically contemplated by the will-maker or for any other reason;
(b) if the beneficiary was the brother, sister or a descendant of the will-maker, to their descendants, determined at the date of the will-maker’s death, in accordance with section 42 (4) [meaning of particular words in a will];
(c) to the surviving residuary beneficiaries, if any, named in the will, in proportion to their interests.
The court concluded that since Clayton was prevented from inheriting his share in Ms Unger’s estate because of the public policy rule, that share should pass to Adeline. First, because Ms Unger’s clear intention was that if either son predeceased her, any children of the deceased son who survived Ms Unger should take his share, and that right extends also to a child conceived before and born after Ms Unger’s death, because the will speaks of the children of the predeceased child. And second, because Adeline was a substitute or ‘alternate’ beneficiary to Clayton in the words of s. 46(1)(a), whereas Logan was not. Only if Adeline’s share failed (which it did not) would it pass to the charities named under the ultimate gift over. Moreover, Adeline was not claiming through or under Clayton, but under Ms Unger’s will.
There was still a problem in that, on a strict construction of the will, the gift over to Adeline could not take effect since it was contingent on Clayton having predeceased his mother, which did not happen. On this point the court referred to Re Bowlen Estate[6] which involved similar facts. In that case the court held that the share of the daughter who murdered her parents did not pass to her brother, but to her three children, who were named as substitute beneficiaries. However, while the daughter’s children were named substitute beneficiaries in Bowlen, the court held that they could not take under the will, since the condition precedent that the daughter predecease her parents was not satisfied. Since the gifts were residuary there was therefore an intestacy and the daughter’s children were entitled to take their mother’s half of the estate under the intestacy rules. That being so, quaere whether Bowlen was the right case to apply
In Re Unger the court seems to have accepted the submission of the executors and the similar submission of the PGT that it should do its best to ensure that the testator’s wishes are not defeated. They would be defeated if the court applied a strict construction to the gift over. If it did, the testator would not only have suffered ‘the indignity of murder but also the affront of the defeat of her obvious testamentary intention’. This is in fact a direct quotation from the judgment of Southin J in Dhaliwall v Dhaliwall, in which her Honour directed that the children of the criminal were entitled to take even though the criminal had not predeceased the testator.[7] The court does reproduce this quotation at para 58 of the Unger reasons but does not expressly follow it, which is regrettable. Regardless, the court held that Adeline was entitled to Clayton’s share.
In any event, could the court not simply have relied on the opening clause of s. 46(1), which says, ‘If a gift in a will cannot take effect for any reason …’?[8] Arguably, it overrides language such as ‘if my son predeceases me’. Quaere also whether we should perhaps change our wills precedents from ‘if my son predeceases me’ to ‘if my son’s share cannot take effect for any reason’?
The result was different for the accounts. Section 46(1) of WESA obviously did not apply to them. The court held that Clayton’s 50% share of the proceeds should be paid by the estate to Logan. This may be correct, depending upon the wording of the beneficiary designations. The case does not quote them expressly. But it seems to me that if the two sons were each given a 50% share and there was no gift over to the other if one was unable to take his share, the failed share should form part of the estate.[9]
—
[1] 2022 BCSC 189, 74 ETR 4th 34.
[2] (1982), 35 OR (2d) 560 at 562, quoted in Oldfield v Transamerica Life Insurance Co of Canada, 2002 SCC 22 at para 14.
[3] If the gifts were not to be paid to the sons until they reached age 30 and there was no gift over if they failed to reach that age, the gifts would offend the rule in Saunders v Vautier (1841), 4 Beav 115, 49 ER 282 (Rolls Ct), affd (1841), 1 Cr & Oh 240, 41 ER 482 (Ch) and the sons would have been able to claim the property when they reached the age of majority. However, it may be that the gifts over described above (to the children of a deceased son, and failing any to the charities) served to avoid the rule.
[4] Cleaver v Mutual Reserve Fund Life Assn, [1892] 1 QB 147 (CA).
[5] SBC 2009, c. 13 (‘WESA’).
[6] 2001 ABQB 1014.
[7] 1986 CarswellBC 235, para 26.
[8] Emphasis supplied.
[9] For a more detailed discussion of the slayer rule, see Oosterhoff on Wills, 9th ed by Albert H Oosterhoff, C David Freedman, Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters, 2021) §12.4. And see also Oosterhoff on Trusts, 9th ed be Albert H Oosterhoff, Robert Chambers, and Mitchell McInnes (Toronto: Thomson Reuters, 2019) §11.5.2.
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