A recent decision of Alberta Court of Queen’s Bench Justice R. Graesser dealt with a case that looked at what happened to spousal support obligations upon the death of the payor spouse. In Lippolt v. Lippolt Estate the parties had a Separation Agreement that set out the terms of settlement. The settlement had a clause which indicated the agreement “shall inure to the benefit of them, their heirs, executors, administrators, successors and assignees”. The terms of the Settlement Agreement were distilled into a Divorce Judgment. Subsequently the payor husband died and the wife applied to the court for direction in connection with the support payments she was owed. In particular, she asked the court to determine if the husband’s estate was obliged to continue paying her support payments of $1,000.00 per month.
The wife’s position was that the estate was bound by the Divorce Judgment, and as such, the payments should continue. The position of the estate was that the obligation for support died with the husband.
In his very thorough decision, Justice Graesser reviews the law and the legislation, particularly the Divorce Act. 35 years ago it was viewed that the obligation to pay support was a personal one. However, Justice Graesser recognized that over time the law has developed and recent decisions have held a contrary view to the view held 35 years ago. So how does the court evaluate these types of fact scenarios? In reviewing the law, Justice Graesser gave a great deal of weight to the British Columbia Court of Appeal decision of McLeod v. McLeod where the Court of Appeal held that a court must consider the intention of the parties as it may be reflected in the agreement or court order and give effect to those intentions.
In Lippolt, the Court held that, on the facts, the husband intended for his estate to continue to pay spousal support for her lifetime. The Court then looked at whether or not the death of the husband was a material change in circumstance under the Divorce Act which would allow for a review of the amount/duration of the support being paid. Under the Divorce Act, anytime a party wishes to vary support, they must show first, that a material change in circumstance has occurred which was not contemplated at the time the Order/Agreement was entered into. In this case, the Court held that the payor’s death by itself is not a material change in circumstance. Justice Graesser opined that: “where the spousal support provision is binding on an estate, the death of the payor without more is not an uncontemplated event. The Separation Agreement and Decree Nisi (Divorce Judgment) already contemplate that contingency…”
Cases such as these fall into three categories:
1. Support terminates on the death of the payor absent any agreement or court order that specifies the payments continue after death.
2. If an agreement provides for a fixed term of support, the estate is bound to pay out the support after the death of the payor.
3. Support continues and is binding on the estate without an end date as a result of a specifically worded agreement or court order.
Frequently the issue around support on the death of the payor is solved by the payor having life insurance that goes to the support recipient.