NS Supreme Court upholds life interest bestowed by testator upon estate executor

The Nova Scotia Supreme Court has affirmed the life interest bestowed by the testator upon the estate's executor, concluding that the conditions stipulated in the will have been met.

In Gracie Estate v. Gallagher, 2024 NSSC 82, the court addressed an estate dispute in the case concerning the late Cameron Gracie's will, particularly focusing on the life interest provided to Lori Lynn Nugent and the resultant implications for Gracie's nephews. Gracie, who passed away in 2021, left behind a will that has since sparked a legal battle over his property in Little Bras d’Or.

According to the terms of Gracie's will, Lori Lynn Nugent, a friend and the executor of the will, was granted a life interest in his Little Bras d’Or house, with the remainder of his estate bequeathed to his two nephews, Jordan Gallagher and Lucas Gallagher. The will stipulated that Nugent would maintain residency and uphold the property's condition as prerequisites for her continued life interest.

The controversy arose when Renee Gallagher, on behalf of her minor sons and Gracie's nephews, sought to terminate Nugent's life interest, alleging her failure to reside in and maintain the property as required by the will.

The court examined the will's conditions, specifically paragraph 4(b), which outlines that Nugent's life interest hinges on her use of the property as her principal residence and her responsibility for its upkeep. If Nugent were to cease residing at the property for a continuous 90-day period, her life interest would be deemed terminated, provided she was not away for work outside Nova Scotia.

Renee Gallagher contended that Nugent had neither maintained the property nor used it as her principal residence, basing her argument on circumstantial evidence, including observations of Nugent's car elsewhere, inconsistent water bills, and the physical state of the property. In response, Nugent asserted her compliance with the will's terms, claiming her absences were work-related and permitted under the will and that she had maintained the property.

The case unfolded through affidavit evidence from both parties, supplemented by observations from a private investigator hired by Gallagher. Despite Gallagher's efforts to demonstrate Nugent's non-compliance through various observations and the property's water usage records, the court found no conclusive evidence that Nugent violated the terms in Gracie's will.

The NS Supreme Court found that Gallagher's evidence did not conclusively prove Nugent's failure to reside at or maintain the property. While suggestive of periods of absence, the observations and water usage records did not firmly establish that Nugent had ceased to use the property as her principal residence for over 90 days or neglected her maintenance obligations.

Ultimately, the court dismissed Gallagher's application to terminate Nugent's life interest, emphasizing that the will's conditions had been met. The court underscored the importance of clear evidence in disputes over will terms and highlighted the challenges in proving non-compliance with such terms.