Importance of Domestic Contracts
Carrigan v Carrigan Estate is a recent Ontario Court of Appeal case grabbing headlines. For family lawyers, the case underscores the importance of the domestic contracts, particularly the Separation Agreements, over whose drafting we toil. For the general public, the Courts’ recognition that a person could, in certain circumstances, have more than one spouse is what is of interest. Let’s have a look at both.
The case pitted the late Ronald Carrigan’s legal spouse against his live-in common spouse over receipt of the pension benefits which would accrue to Ronald’s SPOUSE upon his death. Ronald and his spouse Mary separated in 2000 but they never divorced, nor did they enter into a Separation Agreement to formalize arrangements between them. Ronald started a relationship with Jennifer Quinn and he and Jennifer were living together in a common law relationship when Ronald died in 2008. Up until his death, Ronald was still paying Mary’s expenses and some of the costs of their two daughters.
In 2002, after separating from Mary and while already living with Jennifer (see where this is going?), Ronald designated Mary and their two daughters as the beneficiaries of his pension. When Ronald died, both Mary -the woman he married – and Jennifer – his common law spouse – claimed to be entitled to the survivor pension benefits.
Jennifer’s case succeeded at trial. The Court held that both Mary and Jennifer qualified as Ronald’s spouses under the Pension Benefits Act of Ontario but Jennifer, who was living with Ronald at the time of his death, was entitled to the benefits. The fact of Jennifer and Ronald living together trumped Mary’s claim as a separated spouse.
Jennifer’s case succeeded at trial. The Court held that both Mary and Jennifer qualified as Ronald’s spouses under the Pension Benefits Act of Ontario but Jennifer, who was living with Ronald at the time of his death, was entitled to the benefits. The fact of Jennifer and Ronald living together trumped Mary’s claim as a separated spouse.
This decision provides a warning to those who fail to change their beneficiary designations after entering into new relationships since Mary’s beneficiary designation ultimately trumped Jennifer’s common law status. The case also stresses the importance of having a detailed, written, and signed Separation Agreement that sets out all of the separated spouses’ present and future entitlements, as well as the need for a properly drafted Will. Thus is the case with domestic contracts. Hopefully, the case will serve as a wake-up call to the many individuals who entered into a new relationship without officially ending the old one, as is quite frequent in this modern age of serial monogamy. Formalize the end of the first relationship in a Separation Agreement. Structure the second with domestic contacts. Your intentions will be respected upon death and litigation like that in the Carrigan case will be avoided.
