Tuesday, July 14, 2020
In the June 2020 case of Bergler v. Odenthal, a Canadian case, the British Columbia Court of Appeal found that deathbed wishes created a "secret trust", which required the surviving common law spouse to hold the deceased's estate in trust for the deceased's nice.
The secret trust also severed the joint tenancy of the defendant and the deceased in property they had purchased together, so that the property no longer passed to the surviving spouse by right of survivorship.
The Bergler case is a reminder that a surviving spouse, or any person who stands to inherit, should be careful before accepting requests from the dying person as to how to deal with his or her property. Sometimes it is better to just say "no".
Secret trusts are rarely encountered but have a long history. A secret trust is an exception to the common law rile that any disposition on death must be by way of a will.
The two essential conditions for creating a secret trust are "communication of intention"—the request of the deceased person to his or her heir to hold or gift the property to a third party—and acceptance.
In Bergler, evidence at trial had established clear communication of the deceased's intention to create a secret trust, which was not challenged on appeal.
The defendant admitted that, although he had expressed unhappiness to the deceased about her wishes, he had in fact told her that he would abide by them. This established acceptance
The Court of Appeal also briefly considered whether the joint tenancy of the defendant and the deceased in property purchased together was severed by the secret trust. The Court held that there is no difference in this regard between an ordinary declaration of trust, and the acceptance by a trustee of an obligation of a secret trust: both sever a joint tenancy.
See Barbara Kimmitt, Barbara Stratton, Brynne Harding, & Nielsen Beatty, Just Say No: Acceptance of a Secret Trust in Bergler v Odenthal, Bennett Jones, June 30, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.