Introduction
A pour-over clause is a provision contained in a will which directs that all or part of a testator’s estate be added to an existing trust, to be held under the terms of such trust. They are valid and quite common in the U.S., however they have rarely been judicially considered in Canada and – where they have been so considered – there is a growing tendency not to recognize their validity where the trust is amendable and revocable.
While one court decision in Nova Scotia has validated a pour-over clause to an amendable and revocable inter vivos trust, British Columbia and Ontario courts have not taken the same approach and have instead found these clauses to be invalid. Courts in other Canadian provinces have yet to render a reported decision on this point.
The main concern by the Ontario and BC courts is that a pour-over clause essentially allows a testator to change a testamentary disposition by amending the trust document, which does not require the same formalities as altering a will or executing a codicil and which creates uncertainty regarding the actual disposition made by the testator.