The courts in both Ontario and British Columbia have determined that Wills containing a pour-over clause directing assets into a revocable or amendable trust are invalid.
This is a critical consideration in estate planning, particularly for cross-border clients. The inclusion of an improper clause of this nature can effectively undermine extensive planning efforts and ultimately result in the distribution of assets to unintended beneficiaries.
What is a Pour-Over Clause?
A pour-over clause is a provision in a Will that directs assets of the estate to a previously established Trust. The Will directs the assets to the Trustee of the pre-existing Trust, to be held and administered in accordance with the terms of the pre-existing Trust.
What Happens If a Pour-Over Clause Is Invalid?
When a pour-over clause is found to be invalid, the gifts to the Trust will fail and will either be distributed pursuant to alternative provisions set out in the Will or may result in an intestacy — that is, be distributed pursuant to the applicable provincial laws of succession rather than in accordance with the terms of the Will. As a result, the true intentions of the testator are not given effect.
The pour-over clause structure is commonly used in the United States to avoid complex probate proceedings, to protect the privacy of the testator’s estate and personal affairs, and to avoid or better arrange for estate taxes. However, the treatment of such clauses in Canada is quite different.
Are Pour-Over Clauses Valid in Ontario?
In the decision of Mio v. Bergvall et al., 2025 ONSC 3919 (“Mio”), the testatrix, Janet, was a woman of substantial means and a resident of the United States. Janet’s assets included one financial account and real property located in Ontario. She had established a living trust in the United States, and her Will provided that the residue of her estate was to “pour over” into an amendable and revocable inter vivos trust. The Trust ultimately directed the transfer of the real property to her two friends. However, the Court in Ontario found that a pour-over provision into a “revocable and amendable” trust was invalid. As a result, the Ontario assets were inherited by her two surviving siblings rather than her friends as she had intended.
Why Have Ontario Courts Rejected Certain Pour-Over Clauses?
Mio relied on the earlier decision of Vilenski v. Weinrib-Wolfman, [2022] O.J. No. 1721 (“Vilenski”). The central issue in both Vilenski and Mio concerned the legal formalities of executing a Will. These formalities serve as established safeguards to ensure that the testator has testamentary capacity and proper witnessing protects the testator from undue influence or fraud. The Court noted that an amendable trust did not incorporate similar safeguards. The ability to revoke or amend a trust created uncertainty regarding the ultimate distribution of the estate.
How Have British Columbia Courts Treated Pour-Over Clauses?
The courts in British Columbia have treated pour-over clauses similarly. In Quinn Estate v. Ryland, 2019 BCCA 91, involving the estate of former NHL coach Pat Quinn, the Court determined that the pour-over clause in Mr. Quinn’s Will was invalid. Mr. Quinn was a United States citizen who resided in British Columbia. His Will, drafted by a U.S. lawyer to deal with his Canadian assets, provided that the residue of those assets would pour over into a U.S. Trust. The Wills, Estates and Succession Act, SBC 2009, c 13 (“WESA“) does grant the court certain curative provisions that can give effect to a document that does not strictly comply with the formal requirements for execution of a Will. However, the Court determined that WESA could not cure a provision of a Will that would allow a will-maker to circumvent the formalities of making a Will entirely. In that case, the formalities of execution had been satisfied in Mr. Quinn’s Will, but the pour-over into the amendable Trust permitted changes to be made without meeting the strict formalities prescribed by WESA.
The decision in Waslenchuk Estate, 2020 BCSC 1929, further confirms the strictness with which the courts have approached this issue, that even where a Trust was never amended after the date of execution of the Will, the mere fact that it could have been amended rendered the pour-over clause invalid. Quoting from previous jurisprudence, “The testator cannot, it is said, by his will create for himself a power to dispose of his property by an instrument not duly executed as a will or codicil.”
This follows along the lines of the law relating to wills and memoranda in that a person can incorporate a memorandum by reference into a will but must then execute a new will (or codicil) to incorporate any change to such memorandum.
Key Lessons for Estate Planning Clients
It is strongly recommended that pour-over clauses and related trust structures be reviewed and discussed with qualified legal counsel, who can provide tailored advice having regard to your specific goals, the relevant jurisdictions, and your existing estate planning structure. For further guidance, please contact Pallett Valo LLP, where our experienced team can assist you in addressing your estate planning needs.