Discrimination is allowed when it comes to your will

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We live in a world where political correctness is a must.

For example, you can't tell a man that he's balding. It would be more appropriate to suggest that he is in "follicular regression." If someone has body odour, you should really use the term "non-discretionary fragrance" to be appropriate. And forget about calling someone dishonest; "ethically disoriented" would be the better terminology.

Given all this political correctness, you'd figure our courts would take bigotry seriously. Not always. It seems that testamentary freedom – that is, the freedom to dispose of your property in whatever way you see fit after you're gone – should trump the requirement to act without discrimination.

A very recent decision by the Ontario Court of Appeal in the case of Spence v. BMO (BMO Trust Co. was the estate trustee) is a controversial and interesting case. Here's the story.

The story

Emanuel Spence, a black minister, was the father of two daughters, Verolin and Donna. Mr. Spence and his wife divorced many years ago and Verolin lived with her father while Donna lived with her mother. In 1979, Mr. Spence immigrated to Canada from Britain and brought Verolin with him. She lived with her father off and on between years at postsecondary school. Donna had virtually no contact with her father over the years. In fact, at the time of Mr. Spence's death, Donna's children had never even met their grandfather. Verolin, on the other hand, had a close relationship with her father until that came to an abrupt end in September, 2002.

In that year, Verolin announced to her father that she was pregnant, and that the father of the child was Caucasian. Mr. Spence told Verolin that he was ashamed of her and, from that point forward, he restricted his communication with her. He made it clear to Verolin, according to her affidavit, that he would not allow a white man's child in his house.

Enter: Ms. Imogene Parchment. Ms. Parchment was a friend of Mr. Spence and his second wife, Norma. Norma had predeceased Mr. Spence. Ms. Parchment took care of Mr. Spence until his death, because Norma was a very close friend and had asked her to take care of him.

Mr. Spence died in January, 2013, at the age of 71. He had changed his last will and testament to read: "I specifically bequeath nothing to my daughter, Verolin Spence, as she has had no communication with me for several years and has shown no interest in me as a father."

Ms. Parchment testified that Mr. Spence had an explosive temper, had virtually no friends and mistreated his agency caregivers. About two weeks before his death she spoke to him about reconciling with his daughters. He went into a rage, banging his fists on the table, and told her that he had changed his will.

Ms. Parchment's evidence in her affidavit was that it was clear to her that the reason Mr. Spence excluded Verolin from his will and included Donna and her sons was because Verolin had a child with a man who was Caucasian and he wanted to discriminate against her.

The courts

Verolin felt that she was unjustly disinherited. Justice Gilmore of the Ontario Superior Court found that Mr. Spence's reason for disinheriting Verolin was "based on a clearly stated racist principle." The result? The judge set aside Mr. Spence's will entirely, on the basis that it violated public policy (that is, it's not in the best interest of society); it's as though he didn't have a will at the time of his death. This caused the intestacy laws of the province to kick in and divide his estate between his two daughters.

The case was appealed and the Ontario Court of Appeal overturned the decision. The reasons? First, Verolin had no statutory right for support from her father's estate; she wasn't a dependant. Second, there was no dispute about the interpretation of the wording in her father's will; it wasn't an issue of will construction. Third, the wording of Mr. Spence's will was not overtly racist. The judge went on to discuss when a public-policy argument might hold water, and concluded it shouldn't apply here.

Some would suggest that the end result here is unfortunate. The right to testamentary freedom overrides the requirement to act without bigotry. The fact is, however, the court simply applied the law as it stands today.

For now, at least, it seems that children can be disinherited for discriminatory reasons. The Supreme Court of Canada has refused to hear an appeal in this case, so the matter is closed – unless the wording of the law is changed in the future.

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author and founder of WaterStreet Family Offices