Family Ties – A look at how courts tackle complex estate battles

Now that the holiday season has come and gone as fast as you can say eggnog, we can take some time to reflect and appreciate our time with family. Unfortunately, for some the family dynamic over the holidays can become muddled behind contentious wills as it relates to parents and siblings. In the case of Gefen Estate v Gefen, a complex and interesting set of facts intertwines questions from wills, real property, and trusts.

Henia and Elias Gefen had three sons: Harvey, Yehuda, and Harry. In 2007, the pair signed both primary and secondary mirror wills. Three years later, their matrimonial home was transferred into their joint names and also to Yehuda. It was about this time that things began to become difficult. As Elias’ health worsened, his son Harvey prepared a document revoking an existing power of attorney and reinstating Henia’s power of attorney. Elias was ill and in the hospital at which point Henia believed that her sons Harry and Yehuda had worked together to try to keep her away from Elias. Henia ended up suing Yehuda and Harry as it related to the events leading up to Elias’ death. At the same time, Henia was making several inter vivos gifts to Harvey. In a counterclaim, Harry and Yehuda’s estate (as he too had now passed away) sought an equalization of these gifts in the way of an equal sharing of the residue of Henia’s considerable estate under her will.

At trial, the judge did not find any instance of a mutual wills agreement or a secret trust. The claim of unconscionable procurement against Harvey was granted in part. On the topic of the matrimonial home, the trial judge concluded that the joint tenancy in question between Henia and Yehuda had been severed before his death and that they held their interests as tenants in common, thus giving Yehuda’s estate half of the value of the matrimonial home. Harry and Henia appealed the decision.

On appeal, Pepall J.A. agreed with the trial judge on the issue of the mutual will and secret trust that was supposedly drafted by Harvey. Indeed, the “onus on the party alleging a mutual wills agreement is heavy in that there must be clear evidence of a mutual wills agreement.”[1] In this case, the court agreed that the inherent evidence was not enough to show a mutual will agreement had been put into place. To establish unconscionable procurement, the claiming party needs to prove that there was a significant benefit and the active involvement on the part of the person obtaining said benefit. At this point, the court looks to each impugned transaction with its eye to the morality of the situation, considering each transaction individually. The court agreed with the trial judge that there was unconscionable procurement by Harry receiving assets valued at $8.66 million as gifts from Henia. Indeed, in the absence of either a mutual wills agreement or secret trust, the assets would then revert to Henia.

Lastly, of importance to us, Pepall J.A. found that the trial judge did not err in finding that Yehuda’s estate was entitled to a half interest in the matrimonial home. The joint tenancy had been severed in 2014 by the unilateral acts of authorization by Henia. Further, a dependent’s support application treated the interest as constituting a tenancy in common.

The court was handed a messy situation amongst multiple siblings and an estate but managed to come to a manageable and conclusive decision. Like we often see, courts will continue to use an analysis that focuses on the specific words to find an equitable answer to the questions before them.

[1] Gefen Estate v Gefen, 2022 ONCA 174 at para 33.