Cottrell v Cottrell, 2022 BCSC 1607, is a BC family law decision, part of which addresses the value of a spouse’s interest in several discretionary trusts. Joanne was a beneficiary of family trusts established by her parents. Under BC family law, the value of her interest in each trust on the day it was established was excluded from her family property for equalization purposes. Any increase in that value, however, would be included. The Court held that the husband had not been able to show that his spouse’s interest in the trusts had increased in value because of the “uncertain nature of Joanne’s contingent beneficial interest” (para 43).
This uncertainty stems from the fact that Joanne has never had the actual or even an apparent ability to compel a distribution of the [trusts], and has no reliable assurance regarding the specific extent to which she may receive such a distribution in the future. In these circumstances, the Court cannot find that Joanne’s beneficial interest in the property held in the [trusts] is greater now than it was when settled. In the absence of such a finding, there is no “increase in value of excluded property” to which a s. 84(2)(g) FLA claim can be asserted. Paul’s request for a remedy in relation to such a claim must therefore be dismissed.
The Court was careful to emphasize that its conclusion about the value of Joanne’s interest in the trusts was fact-specific.
