Maddi Thomas associate Gowling WLG (Canada) LLP

Estate planning presents several unique considerations for Indigenous peoples to whom the Indian Act applies: i.e., First Nation peoples who possess Indian status (“status”) and who “ordinarily reside”[1] on reserve land.[2] To be clear, while the term “Indian” may not be appropriate to use in most circumstances, the phrase still possesses legal meaning under the Indian Act as an Indigenous person “with status” and thus in certain circumstances it must be used.

The Indian Act has several key differences compared to provincial estate legislation, but this post will focus on the interaction between Indigenous peoples who have status and live on reserve land, and their spouses who do not have status. Under the Indian Act, both married and common-law partners are recognized as beneficiaries in estate planning. However, if the matrimonial home is on reserve land, it can only be passed on to a partner if the partner is an Indigenous person with status. The Family Homes on Reserves and Matrimonial Interests or Rights Act [Family Homes Act] was introduced in 2013 to fill in some of the legislative gaps with respect to protecting Indigenous and non-Indigenous spouses living on reserve land.

This issue was discussed in Toney v Toney Estate 2018 NSSC 179, one of the only published cases where the applicant (an elderly and disabled widow without status or an Indigenous background) was successful in obtaining an order for exclusive possession of the matrimonial home. Marelene Toney, the applicant, lived on reserve land for 32 years with her husband, Lawrence, the Annapolis Valley First Nation’s Chief, until his death. The couple had two children together, one of whom still lived on the reserve. Marlene and Lawrence took great care of the home and invested approximately $140,000 over the years in improvements. Marlene was heavily involved in the community and had acted as the band manager for several years until her multiple sclerosis became too severe.

Marelene’s husband held the Certificate of Possession for the family home, a document that evidences a First Nation member’s lawful possession, rather than ownership, of reserve lands pursuant to the Indian Act. Under the Indian Act, reserve lands are held by the federal Crown in trust for the exclusive benefit of First Nation bands. Possessory title is evidenced by way of a Certificate of Possession. Lawrence left the certificate to Marlene in his Will, however, because Marlene was not Indigenous or a band member, she was not eligible to inherit the certificate.

Marlene applied to the Court under section 21 and 36 of the Family Homes Act for (1) an order of indefinite exclusive possession and (2) an order for equalization payment for an amount equal to one half the value of the family home. The application was opposed by the Annapolis Valley First Nation due to the housing crisis on the reserve.

After applying the test laid out in section 21(3), the court granted both an order for indefinite exclusive occupation and an order for an equalization payment for the money she contributed to the house over the years ($70,000). This ruling was significant, as at the time there had been no published cases of a successful order for exclusive occupation for a non-Indigenous spouse. The court stating that it found the following factors to be relevant:

• Marlene’s age (56) and severe medical condition;
• Marlene’s limited financial resources and that her only income was her disability pension;
• the $140,000 that Marlene and her husband had put into the home; and
• that Marlene’s husband willed his entire estate to Marlene and the certificate was the only substantial asset.

A condition of Marlene’s occupation of the property was that there not be a “material change in circumstances”, such as “the applicant re-partnering and the partner moving in, or the applicant’s health requiring her to relocate to a care facility, or her failure to maintain the home and prevent waste”. In effect, the Certificate of Possession was not Marlene’s to bequest upon her passing.

The outcome of this case is exceptionally rare, and no Court has granted an order for indefinite exclusive occupation for a non-Indigenous spouse since this case. However, this ruling should be considered by any estate planner working with Indigenous clients as there may be significant implications for couples living on reserve land. For more information on estate planning and administration and the Indian Act, please see the article I co-wrote with Gwenyth Stadig: Estate planning, estate administration, and intestacy under the Indian Act: Practical considerations for legal professionals.

[1] Canada (Attorney General) v. Canard, 1972 CarswellMan 69 (Man. C.A.), reversed 1975 CarswellMan 89F, 1975 CarswellMan 32 (S.C.C.).

[2] Reserve land is land set aside by the federal Crown for the use and benefit of a particular First Nation.