As lawyers, we often see clients that have “side deals” with their former spouse, saying something like “We talked that out and you don’t need to put anything in the agreement about that. We got it.”
The Supreme Court of Canada recently released a Decision related to a woman’s entitlement to her ex-husband’s life insurance policy. Here are the basic facts from the case:
- Michelle and Larry Moore were married for 20 years before they separated in 1999.
- Upon their separation, they entered into a Separation Agreement however, they also had an additional “handshake” or “kitchen table” Agreement
- The Kitchen Table Agreement was such that Larry would continue to name Michelle as the beneficiary of his life insurance policy if Michelle continued to pay the annual premiums.
- Following the parties’ separation, Larry remarried, a woman named Risa.
- Larry then named Risa as the beneficiary of his life insurance policy, while Michelle continued to pay the annual premiums of more than $500.00 per year.
- Michelle continued to pay the life insurance premiums for 12 years until Larry died in 2013.
- Michelle was shocked to find out from the insurance company that she had been paying premiums towards a policy that named not her, but Risa, as the beneficiary.
- This led to a legal battle between Larry’s wives that went through all levels of Court over five years.
- Moore won on her initial application at trial where the Court found that Michelle was entitled to the entirety of the life insurance policy.
- Risa appealed the Decision and was successful before the Court of Appeal.
- Michelle appealed to the Supreme Court of Canada and the Supreme Court of Canada found in favor of Michelle, upholding the Kitchen Table Agreement
The Supreme Court of Canada described this as a legal battle between two “innocent” parties. Risa Sweet suffers from chronic illnesses and cannot take public transport according to her court filings. She continues to have trouble paying rent and buying food. While the above Decision of the Court decided in favor of Michelle who entered into the oral “kitchen table” agreement, this was only after presumably a great deal of legal fees and/or stress spanning over five years.
In my view, the take away from the Supreme Court of Canada’s Decision and the experience of both Michelle and Risa, is that it is normally in everyone’s best interests to have their intentions related to all issues reflected in a Separation Agreement. This can help to ensure that everybody is in agreement on all issues and can avoid legal fees, stress, and uncertainty in the future.
To seek more information on Kitchen Table Agreements, contact one of our Family Law lawyers.