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Do spousal support obligations terminate upon death? A case summary of Lippolt Estate (Re), 2015 ABQB 118

Lippolt v. Lippolt Estate, 2015 ABQB 118 is an Alberta Court of Queen’s Bench case from last year. It is an interesting case for many reasons, not least of which is the lessons it can teach lawyers when drafting separation agreements.

This case displays once again the interplay that can take place between estate law and family law. The parties in this matter were separated in 1979, Ms. Lippolt had been a stay at home mother, and the husband was a doctor. The parties reached an agreement regarding their matrimonial breakdown and the terms of settlement provided the Ms. Lippolt was entitled to a spousal support amount for the length of her lifetime (if she not re-marry or live with a common law partner). In 2013, Dr. Lippolt died. The wife applied for direction from the Court and continuation of the spousal support obligation and the Estate applied for spousal support to end on the basis that the death of Dr. Lippolt was a change in circumstance.

The Court looked through past case law in Alberta and British Columbia, and found that there was no uniform way in which spousal support obligations after the death of the payor has been treated. Ultimately, this was a fact driven determination which took into account the intention of the parties and the situation in which both parties (or one party and the estate) found themselves. The parties’ Separation Agreement contained a clause that it “shall inure to the benefit of them, their heirs, executors, administrators, successors, and assigns”. In addition there was a heading included titled “Binding on the Estate”.

The Estate put forward quite a few arguments about why this obligation should end. One was that the Divorce Judgment superseded the separation agreement, and thus the language of the Divorce Judgment, which did not specify any language relating to the estate, should be used. The Court dismissed this argument. They found that Divorce Judgment only supersedes the Separation Agreement to the extent to which it speaks to a certain subject matter. The Court found that it was not the intention of the Divorce Judgment to change the wording of the Separation Agreement but rather that the Divorce Judgment simply did not cover this subject matter. Another argument that the Estate tried was that death itself was a change of circumstances. While practically, death is life’s biggest change in circumstance, the Court found that given the support obligation was to continue until Ms. Lippolt’s death; Dr. Lippolt’s death was not a circumstance that was unforeseen. In the end, the Court decided that Ms. Lippolt was entitled to continue to receive spousal support for her lifetime. Factors that loomed large in this decision were the wording of the separation agreement, the finding that there was no inability to pay as the Estate had quite a bit of money, Ms. Lippolt was in her early 70s and the ongoing obligation was only $1000 per month.

The most important take away of this case is the need to draft agreements with certainty relating to spousal support obligations to avoid these sorts of situations following the death of a payor. It generally may be a good practice to explicitly decide when drafting a separation agreement whether a spousal support obligation will terminate in the event of death and made sure that the phrasing of those provisions reflects what the parties’ true intentions are. Another option is insurance. Carrying a life insurance policy for this express purpose, similar to what many people carry in relation to their child support obligations, would cleanly release the Estate’s burden in terms of the Spousal Support obligation of the deceased. There are also tax implications which should be taken into account, which in this case were not argued but which Phil Epstein commented upon. Money paid by the Estate would not be tax deductible the same way that Spousal Support by a living payor would be and so there may have to be adjustments if spousal support continues after death.

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