Rights & Money

The Threat of Predatory Marriages

Vultures who prey on vulnerable seniors, marrying them for their money, can take them for everything they have—and everything their heirs were meant to have

By Olev Edur

Retirees and their loved ones should be concerned about a disturbing trend that seems to have been making its way eastward across Canada in recent years. What is known as a predatory marriage became such a concern out west a few years ago that the governments of British Columbia and Alberta were prompted to change their laws regarding wills and succession.

Now it appears that the phenomenon has spread to Ontario and likely other provinces, as well.

“I haven’t seen any statistical analysis providing hard numbers, but certain things are very clear,” says Charles Wagner, an estate lawyer with the Toronto law firm of Wagner Sidlofsky. “People are aging—I believe Statistics Canada has said that in another 18 years, by 2036, a quarter of the population will be 65 or older. For some, their cognitive abilities are declining, so they’re more vulnerable to predation. I can’t speak for British Columbia or Alberta, but case law has certainly established anecdotally that the problem is increasing exponentially in Ontario. I usually have two or three cases on the go at any given time.”

The problem has been exacerbated by unprecedented wealth accumulation during the past several decades. An estimated one trillion dollars is expected to change generational hands in the coming years, so the potential rewards are larger than ever before.

“More wealthy elderly people with heightened vulnerability are easier prey for the financial predator,” Wagner says. “The baby boomer generation has considerable wealth, but while medical science has increased the average lifespan, it hasn’t made comparable progress in reducing the cognitive impairment associated with the aging process.”

“It’s a hulking potential problem,” agrees Suzana Popovic-Montag, the Toronto-based managing director at the law firm Hull & Hull, which specializes in estate law. “You can try to extrapolate from the statistics, but of course, not all such crimes are reported. The statistics do show, however, that we are living longer and as our cognitive abilities eventually decline, we become more vulnerable.”

Caregivers Become Predators
What are predatory marriages and how do they come about? What if it happens to a loved one? How do you protect against this modern-day scourge?

The broad definition of predatory marriage is succinctly captured by Dagmara Wozniak, an estate and personal injury lawyer with the law firm Siskinds in London, ON, in an article on the firm’s website entitled “Predatory Marriage: A Modern Day Marriage Trap.” She writes: “The term ‘predatory marriage’ has been coined to refer to a marriage entered into for a singular purpose of exploitation, personal gain, or profit.

“Frequently, it involves an interested party (i.e., friend, neighbour, etc.) assuming the role of caregiver and persuading a vulnerable person to marry. Often, the victim is elderly, dependent, and suffering from some degree of cognitive impairment. After marriage, the ‘predator spouse’ takes advantage of the vulnerable victim spouse and assumes control and management of the victim spouse’s financial affairs.”

Popovic-Montag elaborates: “A predatory partner will use his or her status as a spouse to withdraw money from joint bank accounts, obtain ownership (often exclusive ownership, to the detriment of the aging spouse) of the matrimonial home, and make arrangements to inherit significant amounts of money from the estate of the victimized spouse. Not only do predatory marriages affect the elderly spouse who is being taken advantage of, but they also have an impact upon the entitlements of beneficiaries named within the person’s will.”

Heirs must be concerned, because in most provinces (except British Columbia and Alberta, and except in Quebec, where civil law differs from the common law that applies elsewhere in Canada), a marriage revokes any pre-existing will. If a new will isn’t executed following the marriage, the deceased victim is deemed to have died intestate—that is, provincial trustees take over the administration of the estate, which then gets distributed according to a rigid formula.

While the details as to estate distributions vary from one province to the next, they all favour the current spouse and the children. In Ontario, for example, the Succession Law Reform Act stipulates that a married spouse automatically receives the first $200,000 of the estate and then shares the remainder of the estate with the children of the deceased.

“An elderly person in Ontario [or elsewhere] could be unaware that his or her existing will can be revoked by marriage and could have no knowledge of the need to execute a new one,” Popovic-Montag says. “And in fact, he or she may lack the requisite capacity to execute a new one.”

Mental Capacity Is a Key Consideration
The fundamental problem here is that although the bar is set very high when it comes to changing one’s will or making other important financial decisions, it’s set very low for entering into a marriage, even though marriage can have equally dramatic estate and financial consequences. “Although it may not require the same degree of mental capacity as executing a new will, marriage can nevertheless result in a complete transformation of an estate plan,” Popovic-Montag says.

In a recent article on predatory marriage for HuffPost (formerly The Huffington Post), Popovic-Montag itemized the criteria that must be considered before someone can grant or revoke a will. Firstly, the testator must be able to understand:

– the nature of the act of making a will and its effects,

– the extent of the property of which he or she is disposing, and

– the claims of persons who would normally expect to benefit under the will.

Further, the testator must have a “disposing mind and memory,” including “a sufficiently clear understanding and memory” to know the nature and extent of his or her property, those who are “the natural objects” of his or her estate, and the testamentary provisions he or she is making, and the testator must be able to appreciate all of these factors in relation to one another.

By comparison, the qualifications required for eligibility to marry are negligible. As a result, the only way of annulling such a marriage ab initio—that is, from the get-go—is to prove that the victim was seriously lacking even the basic mental capacity to understand what marriage meant.

“Given the financial and testamentary repercussions of marriage, shouldn’t the standards of the test for capacity to marry be more rigorous?” Popovic-Montag asks. “Since the act of marriage has the ability to revoke a will, why would the standards for capacity to marry be less rigorous than testamentary capacity? In my opinion, the capacity to marry ought to involve the same capacity threshold as that for testamentary capacity.”

Wagner agrees that there is a disconnect between the two thresholds: “While the courts may be more open to setting aside a will procured by undue influence or testamentary incapacity, they are less likely to set aside a marriage on that basis. Why? Because there’s a world of difference between the high capacity required to make a will and the low capacity required to get married.”

Wagner cites the recent case of Hunt v. Worrod as an illustrative “analysis of the law as it applies to setting aside a marriage contract where capacity is in question.” In that case, the plaintiff’s children were able to prove their newly married father’s cognitive abilities were so severely diminished as a result of a vehicle accident that he was truly unable to comprehend what was happening to him. But the burden of proof the plaintiffs faced was onerous.

In rendering his verdict, the judge cited precedent from a British Columbia Court of Appeal decision (Ross-Scott v. Potvin): “A person is capable of entering into a marriage contract only if he or she has the capacity to understand the nature of the contract and duties and responsibilities it creates. Delusional thinking or reduced cognitive abilities alone may not destroy an individual’s capacity to form an intention to marry as long as the person is capable of managing their own affairs.”

Nevertheless, the Hunt children were able to prevail through extensive medical evidence, supporting testimony from six mental-health and rehabilitation experts, and testimony from friends; their position was helped by some questionable testimony from the predatory defendant and her relations, as well as by their actions during the period in question. But it was a costly and complicated case and demonstrates how difficult it is to prove that someone lacks the requisite capacity to get married.

Pre-Emptive Options
While the Hunt children were able to prove their argument because the evidence was ample and abundantly clear, in most cases, the issues—and evidence—are far from black and white. So how can children protect their parents against financial predators?

Both Wagner and Popovic-Montag say that there are a number of estate-planning options, including prenuptial agreements, gifting, and joint-ownership arrangements. A parent may, for example, be able to use trusts to secure the interests of his or her children; or the children may be gifted assets prior to the marriage; or the assets can be placed into joint-ownership positions. These strategies may put estate assets out of reach of predators and in some cases may also provide some income tax and probate advantages. On the other hand, these solutions may not be foolproof, because they generally depend on the co-operation of a parent who may have been bitten by the love bug. Further, most require a degree of legal expertise that necessitates the advice of a lawyer well versed in matters of estate.

Ideally, measures are best if they’re preventive, taken before any marriage.

Another possible option for safeguarding bequests to children is for the parent to create a will “in contemplation of marriage,” which would not be revoked by the marriage. But of course, measures such as this kind of will or a prenuptial agreement must be taken by the parent, and that parent must have the necessary capacity—and willingness—to take them. And there’s nothing to stop the parent from changing the will later to disinherit the kids and benefit the new spouse, and a prenuptial agreement can be revoked by mutual consent.

In addition, Wagner notes that under Ontario’s Family Law Act, the court has discretion to set aside a domestic contract under a number of circumstances, such as if one party didn’t understand the nature or consequences of the domestic contract.

Some Further Preventive Strategies
In some situations, given the increasing tendency for families to spread out as the children grow up and establish families of their own, often in distant cities or even countries, the children may not even realize what’s happening.

“It’s harder when the kids aren’t in daily contact,” Popovic-Montag says. “They don’t know if a friend or caregiver is taking advantage. You have to be able to spot the red flags. Is the parent being increasingly isolated from family? Is someone taking over the victim’s assets?”

There’s also the question of when it would be appropriate to intervene. “It’s a troubling question,” Wagner says. “What is the capacity to get married? What if, for example, your 95-year-old father decides to marry and has the capacity to do so? As a 60-year-old son, you may ask, ‘What are you doing?’ and he might say that he knows he may be making an error in judgment, but he is making a choice for warmth and comfort, never mind the costs. Do you have the right to interfere?

“If your father is being taken advantage of but has capacity and says he’s just enjoying himself, what can you do? People in institutions often enter into relationships. What can you do about it?”

Some cases are more straightforward. “Sometimes, people who are capable can be compelled to do something against their will,” Wagner says. “For example, take a man who has capacity and a private nurse who says, ‘I quit unless you marry me. I’m not getting enough money for what I do, so unless you marry me, I’m out of here.’ That’s when the son or daughter must step in and tell the nurse to get out, call the cops if necessary, and hire a new nurse.”

As noted earlier, after a marriage has taken place, it can be very difficult to remedy the situation. And even if the marriage can be set aside, there can still be hurdles. “Even if the marriage is void and the will that existed prior to the marriage is no longer revoked, a financial predator may still be entitled to an inheritance or may seek an equalization payment or support as a dependent.”

As a result, children should be wary when an elderly parent starts talking about marriage.

“My advice is always the same, whether the parent has capacity or not,” Wagner says. “First, consult a lawyer and seek advice about a domestic contract and an estate plan that protects your parent and your interests; second, arrange for an assessment of the parent’s capacity; and third, under the guidance of your lawyer, take whatever steps are possible to protect yourself and your parent.”

While the capability assessment can be a key weapon, Wagner points out that you can’t force someone to take an assessment; it’s the parent’s decision.

Finally, don’t hold your breath hoping the laws will be changed, as they were in British Columbia and Alberta.

“I haven’t heard of any plans to change the law in Ontario,” Wagner says. “There’s nothing in the rumour mill.”

Photo: iStock/Sunshine Seeds.