{"id":540538,"date":"2026-03-16T17:31:19","date_gmt":"2026-03-16T17:31:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/540538\/"},"modified":"2026-03-16T17:31:19","modified_gmt":"2026-03-16T17:31:19","slug":"court-ruling-on-cottage-shows-what-can-happen-when-wills-dont-account-for-rise-in-property-value","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/540538\/","title":{"rendered":"Court ruling on cottage shows what can happen when wills don\u2019t account for rise in property value"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Cottages can present practical and financial challenges for the next generation, and lead to disputes among heirs.Orchidpoet\/iStockPhoto \/ Getty Images<\/p>\n

Cottages can carry both significant emotional and financial value for families, so it\u2019s not surprising they\u2019re often the subject of estate disputes. <\/p>\n

A recent Ontario Superior Court of Justice decision, currently under appeal, shows what can happen when a will is unclear about how a vacation property that appreciated in value over time should be passed to the next generation. <\/p>\n

Haddock v. Haddock, a decision released in November, involves the estate of Audrey Lillian Haddock who died in 2022 at the age of 96. <\/p>\n

In her will, executed in 2012, she named her three surviving children \u2013 Thomas Haddock, William Haddock and Susan O\u2019Shea \u2013 as co-executors. The deceased\u2019s 2012 will updated a previous 2003 will to include grandchildren\u2019s names, but was otherwise substantially the same.<\/p>\n

The estate consisted of investment accounts and a cottage. After gifts to the grandchildren, the will divided the remainder of the estate equally among the three children. <\/p>\n

However, the will also directed that the cottage be given to Thomas, provided that its appraised value, plus the cost of the appraisal, be deducted from his share of the estate.<\/p>\n

The issue was that the cottage was valued at $1,375,000 at Ms. Haddock\u2019s death. That amount greatly exceeded the value of the remainder of the estate, which was about $796,500, and thus was worth far more than Thomas\u2019s share.<\/p>\n

William and Susan applied to the court for direction on the cottage distribution clause.<\/p>\n

Interpreting intentions<\/p>\n

In court, Thomas took the position that he was entitled to the cottage, minus his one-third share of the remainder (about $265,500). If the value of the cottage exceeded his share, it was because that\u2019s what his mother intended so the cottage would remain in the family, he argued.<\/p>\n

William and Susan took the position that Thomas should pay the full value of the cottage from his share of the estate, plus any shortfall. If he didn\u2019t, then the cottage should be sold and divided equally between the three siblings. <\/p>\n

To determine the deceased\u2019s intentions, the judge in the case considered the wording of the disputed cottage clause, as well as the overall will and the surrounding circumstances.<\/p>\n

The judge noted that the deceased, who had bought the cottage with her husband in 1970, wanted the property to stay in the family. It made the most sense that she would give it to Thomas, as he used it regularly and showed the most interest in it.<\/p>\n

The disputed clause could have been written more clearly, the judge stated. For example, it didn\u2019t contain wording that expressly limited the amount that could be deducted from Thomas\u2019s share. On the other hand, the will didn\u2019t provide directions that the cottage could be sold in the case of a shortfall. <\/p>\n

The judge said it was significant that the disputed clause directed the cost of the cottage appraisal be paid out of Thomas\u2019s share of the estate, not out of the estate. That suggested the deceased did not want William and Susan to be disadvantaged, even by a modest amount, by the gift of the cottage to Thomas. <\/p>\n

There was additional evidence that the deceased wanted to treat her children equally, the judge said: she had made all three children co-executors and all equal beneficiaries of the remainder of the estate.<\/p>\n

\u201cThe deceased did not contemplate that the cottage would rise in value so significantly by the time of her death,\u201d the judge said. \u201cThe increase in value of the cottage may be unfortunate for Thomas, but it does not alter the deceased\u2019s intention, expressed in her will, that her children would be treated not identically, but equally.\u201d<\/p>\n

The judge ruled that Thomas could keep the cottage if he paid the outstanding balance above his share to the estate. If he didn\u2019t pay, the cottage would be sold, and the proceeds would be added to the remainder of the estate and divided three ways. <\/p>\n

Thomas and his two siblings exchanged settlement offers before the decision, but neither was accepted. <\/p>\n

The judge in the case said about 80 per cent of William and Susan\u2019s legal and other costs of about $72,000 should be paid out of the estate. Meanwhile, Thomas was responsible for his own costs of about $62,000.<\/p>\n

Ron Bohm, senior partner with Blackburn Lawyers in Richmond Hill, Ont., who is representing Thomas Haddock in the case, says his client believes the judge erred in the decision, which is why he\u2019s appealing.<\/p>\n

\u201cWe believe that when the testator stated the value of the cottage shall be deducted from Tom\u2019s share, that was her way of ensuring he would get the cottage, it would stay in the family, and the gift would not fail. Otherwise, she would have just given him an option to purchase it for market value,\u201d Mr. Bohm says.<\/p>\n

\u2018The most emotionally charged asset\u2019<\/p>\n

Diana Tebby, an estate lawyer with Mann Lawyers LLP in Ottawa, says, \u201ccottages are often the most emotionally charged asset in an estate,\u201d as their value is tied to family history and shared experiences. <\/p>\n

At the same time, cottages may present practical and financial challenges for the next generation, such as deciding on how maintenance and tax costs will be paid or whether the cottage should be sold or kept.<\/p>\n

\u201cFrequently, one child may have a stronger attachment [to the cottage] or greater financial capacity than others,\u201d Ms. Tebby said in a response sent by e-mail to questions from The Globe.<\/p>\n

To avoid estate disputes among heirs, \u201ccottage owners should clearly determine whether they intend for the property to be shared, transferred to one beneficiary (with or without an equalization payment), or sold,\u201d she said. \u201cThat intention should be reflected explicitly in their will and co-ordinated with tax planning.\u201d<\/p>\n

Bhuvana Rai, tax lawyer and founder of Mors & Tribute Tax Law in Toronto, says it\u2019s regrettable that the deceased\u2019s will in Haddock v. Haddock didn\u2019t address the possibility that the value of the cottage would exceed Thomas\u2019s share of the remainder of the estate.<\/p>\n

Nevertheless, it likely would have been in the children\u2019s best interest if they could have reached an agreement before a court decision.<\/p>\n

\u201cThe last thing parents want is their children squabbling over the value of an estate and paying lawyers to deal with it instead of just being able to agree,\u201d Ms. Rai says.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Cottages can present practical and financial challenges for the next generation, and lead…\n","protected":false},"author":2,"featured_media":540539,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[1397,45,49,48,133,5266,2922,131,132],"class_list":["post-540538","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-appwebview","tag-business","tag-ca","tag-canada","tag-finance","tag-globe-advisor","tag-noastack","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/540538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=540538"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/540538\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/540539"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=540538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=540538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=540538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}