A gift to family members as if it was written immediately before death

When a person creates a Will to leave behind property for their loved ones, issues can often arise because of the passage of time between the date the Will was created and the date the testator dies. For example, property or circumstances listed in the Will could change over time, such that things are not at all the same on the date of the testator’s death as they were on the date the Will was signed. This created issues in a recent case involving a farm as a gift, explored next. Section 22 of the Succession Law Reform Act (SLRA) creates certainty in some of the problems arising from this scenario, stating that the Will speaks from the date of death and not the date of the Will, except where there is a different intention:

Will to speak from death

22 Except when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to,

(a) the property of the testator; and

(b) the right, chose in action, equitable estate or interest, right to insurance proceeds or compensation, or mortgage, charge or other security interest of the testator under subsection 20 (2).

In the recent Court of Appeal decision of VanSickle Estate v VanSickle, 2022 ONCA 643, the testator owned a hobby farm. While she had six children, only one child, the Appellant, stayed involved with the farm until the testator eventually died. He was gifted a generous option to purchase the farm, at a price that was far below its value. The issue in this case was with the wording surrounding the farm: “If my son, HOWARD VANSICKLE, shall be living at the time of my death, my Trustees shall sell the farming business carried on by me at R.R. #7 Brantford, Ontario, in the Township of Onondaga, in the County of Brant, to my son, HOWARD VANSICKLE, as soon as convenient for the price of $85,300.00 or such lower price to be agreed upon by my Trustees and my son….” What does the farming business "carried on by the testator" mean?

The testator died at 95 years of age. She owned the farm on the date of her death. However, rather than actively working on the farm as she had years earlier, she started renting it out to the Appellant, collecting the rental income as farming income. This is entirely expected, as, again, the testator was 95 years of age. However, the application judge, who rendered the decision that was appealed, said that the gift to the Appellant failed because the testator was no longer carrying on farming business as she once had been and thus, the farming business was no longer “carried on by the testator” as the condition clearly had been written in the Will.

The Court of Appeal struck down this decision. In sum, the Court of Appeal said that the application judge read the Will as if it spoke from the date the Will was signed back in 1985. In 1985, the testator had a much more active role in the farm. Therefore, the application judge found it was significant that the testator eventually started renting the farm out to her son rather than carrying on the day-to-day operations herself. In the application judge’s opinion, this was enough to void the gift because the farm was no longer “carried on by [the testator]” as it once had been.

The Court of Appeal said that this reasoning ignores the presumption in section 22 of the SLRA, which states that a Will is read as if it was made immediately before the date of death. So, the starting point is not to examine how the testator’s role in the farm changed over time, since 1985. The starting point is to assume the Will was written with the circumstances that had existed at the date of death in the testator’s mind, unless there is a different intention expressed. Of course, this could only be assumed if the actual property in question still existed in the testator’s estate. It was significant that the testator was collecting the rental income from the farm as “farming income”, because it suggests that the testator felt like she was still in the business of farming on the date of her death, despite not having an active role. The Court of Appeal summarized:

9 We are of the view that the application judge made an extricable error of law in failing to apply the presumption set out in s. 22 of the Succession Law Reform Act, R.S.O. 1990, c. S.26, that "[e]xcept when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to . . . the property of the testator".

10 The starting point for the interpretation of the will, according to s. 22, is to ask whether the testator was, at the time of her death, carrying on a farm business at R.R. #7, Brantford. As at that date, she still owned the specific farmland at that location and did not leave it unproductive, but rather leased it out to be farmed on a commercial basis, received income from the lease (and on occasion a share in the profits from the crops), and declared that income on her income taxes as farm income. On each tax return in evidence, she indicated that it would not be the final year of farming.

11 On any reading of these facts, the testator was carrying on a farm business at R.R. #7, Brantford at the time of her death. The next question is whether there is anything in the will to displace the presumption that the will speaks at the time of death, and instead to support the proposition that what the testator really intended was that the option to Howard only be exercisable if the farm business that she was carrying on was one in which she had a direct role — either tending the fields herself or directly managing the labour of others.

12 Had the application judge engaged with the presumption, he would not have been able to find that the phrase "the farming business carried on by me" was sufficient to defeat it. There is nothing in the phrase "the farming business carried on by me" that points unambiguously to the business carried on in 1985 over the business carried on in 2019. Neither is there anything in evidence about the surrounding circumstances that would suggest that the testator's intention was to provide Howard with an option to purchase the family farm so that he could continue farming it, but only if she was still involved in the day-to-day operations. Indeed, it is noteworthy on this point that the will contained a further clause that defined the term "farming business" as including "all assets, stock, plant, liabilities, in connection there with on the other (sic) and it shall include the estate in fee simple of the farm."

As demonstrated, the Court of Appeal also pointed out that the actual definition of “farming business” was included in the Will as “…my farming business shall include all assets, stock, plant, liabilities, in connection therewith on the other and it shall include the estate in fee simple of the farm” – insinuating that "farming business" included the actual ownership of farming assets, not just the active participation in operations.

Obvious takeaways? There may be a significant amount of time between the date of a Will and the date of the testator’s death. However, the presumption is that the Will is read as if it had been created immediately before the date the testator died. This clears up many ambiguities created by the passage of time.