New Estate Laws of British Columbia as of April 1, 2014 (WESA)
After over 30 years of planning, the estate laws of British Columbia have received a recent major overhaul in a new statute called the Wills, Estates and Succession Act (WESA). It replaced and combined together several previous estate statutes that stood alone.
The purpose of this paper is to mention eleven of the major highlights of the new legislation :
A SLIGHTLY DIFFERENT PERSPECTIVE AND OVERVIEW OF WESA
It took over 30 years for the British Columbia law reform bodies to overhaul the various statutes relating to wills and estates, resulting in the enactment of the Wills, Estates and Succession Act (WESA). However, after careful deliberation and review, it is my impression that much of the WESA is much to do about very little, or should have been done by Order in Council many years ago, and in some circumstances, was simply not necessary.
At the same time, however, some provisions of the WESA could greatly assist plaintiff`s counsel in supplementing the tools available to get even a hotly-contested estate finalized.
1. The Wills Variation Act
In its initial report in 2006, the British Columbia Law Institute recommended changes to the Wills Variation Act (WVA) on the basis that the estate laws of British Columbia should conform with that of the rest of Canada.
The report proposed that the right of an adult child to make a claim under the WVA should be available only when the child was a student or could not be self-supporting by reason of illness, mental or physical disability, or other special circumstances.
The report in essence removed the moral obligation of a parent to provide for an adult self-supporting child.
In my opinion this was the most significant and controversial recommendation in the report. After much debate, it was eventually withdrawn. The Trial Lawyers Association and I were instrumental in refuting this ill-considered proposed change to the WVA, which has been part of British Columbia culture for almost 100 years.
The WESA has made only minimal changes to the WVA, leaving the legislation largely untouched.
2. Undue Influence
In my opinion the most significant and beneficial change that the WESA has made for estate litigation is the vast improvement given to proving undue influence. Now, where the challenger to a will proves both the potential for dependence or domination, and the opportunity for use of that position to unduly influence a will-maker to make a will or any provision in it, the onus of proof shifts to the party benefiting, usually a caregiver, to defend the will or uphold the gift.
This is a tremendous benefit to the law relating to undue influence and wills, and brings the statute into line with the case law of the Supreme Court of Canada in the Geffen case, which provides for a similar shifting of the onus of proof for inter vivos gifts.
3. Marriage Issues
The antiquated law that marriage revokes a will unless made in contemplation of the marriage, has finally been repealed by the WESA. This change is long overdue, given that more and more couples are cohabitating and marrying later in life.
The definition of “spouse”, however, has become increasingly complicated, particularly as the definition of spouse under the WESA may conflict with the definition of spouse under the new Family Law Act. The merger of estate law and family law has become increasingly evident with the enactment of the Family Law Act and the WESA.
As was the case under the previous Wills Act, the WESA provides that if a will makes a gift to the will-maker’s spouse, and subsequent to the execution of the will the will-maker and the spouses divorce, the gift to that spouse in the will is revoked, subject to a contrary intention expressed in the will.
Section 56 of WESA goes further to state that subject to a contrary intention expressed in the will, a gift made in a will to someone who is or becomes the will-maker’s a spouse is revoked, if after the will is made and before the will maker’s death, the will-maker and the spouse cease to be spouses pursuant to sections 2 (2) of the WESA.
With respect to intestacy, it should be noted that under the WESA a separated spouse will no longer have any entitlement if his or her former spouse dies without a will.
I foresee much litigation over the term “spouse” as it applies, for example, to married spouses who reconcile or to common-law spouses who separate, and also as to how the definitions of “spouse” in the WESA and the Family Law Act may conflict.
4. Intestacy Rules Changed
The provision for a spouse under an intestacy has not been updated since 1983 and was long overdue for change. Under the WESA the spouse’s preferential share is now increased from $65,000 to $300,000 if all of the children of the deceased are also children of the spouse.
If the deceased had children who are not children of the spouse (i.e. step-children of the surviving spouse), then the surviving spouse’s preferential share is only increased to $150,000, with the remainder of the estate being divided one-half to the spouse and one-half among the deceased’s children.
The surviving spouse is no longer entitled to a life interest in the former matrimonial home but instead receives the right to purchase the family home for fair market value up to 180 days after the grant of administration. The court has some discretion to reduce the price or improve the terms of the purchase for the spouse if there is a significant financial hardship.
One of the most significant changes that the WESA has made to the intestacy rules is the change from distribution on the basis of consanguinity to a “parentelic” distribution scheme. Quite frankly I feel the entire change was unnecessary.
For many decades, under the Estate Administration Act and its predecessors, intestate estates have been distributed on the basis of lineal consanguinity, which subsists between persons of whom one is related in a direct line to the other, such as between son and father, grandfather, great-grandfather and so upwards in the direct ascending line, or alternatively between father and son, grandson, great-grandson and so downwards in the direct descending line.
Under this system, where the deceased leaves no spouse or descendants, the persons in the nearest degree of consanguinity share in the estate.
The drafters of the WESA considered this system to be unfair in certain circumstances, as it is possible for one side of a deceased person’s family to take the whole of the estate although there are also relatives on the other side.
Section 23 of the WESA implements what is known as a parentelic distribution scheme where the deceased dies with no spouse, descendant, parent or descendant of a parent surviving him or her. Under the parentelic system, the estate is to be divided between relatives of the deceased’s parents, starting first with the deceased’s grandparents and their descendants.
If there are persons on both parents’ sides, the estate is divided equally between the two sides (e.g. equally between a maternal grandmother and a paternal uncle). If there are no relatives at this level, than one looks to the grandparents of the parents and their descendants in the same fashion.
If there is still no relative at this next level, then the intestate estate will escheat to the Crown.
From a factual point of view it is relatively common that two or more persons die at the same time or in circumstances where it is uncertain which of them survived the other or others. Natural disasters are example of such situations.
The WESA repealed section 2 of the former Survivorship and Presumption of Death Act (now renamed Presumption of Death Act) and sets out new survivorship rules in Part 2, sections 5 to 11. The previous survivorship law had been in place for many decades and often conflicted with provisions of the Insurance Act relating to life insurance.
Generally speaking the previous law was that where two persons died in circumstances where it was uncertain which of them survived the other, it was presumed that the younger person survived the older person.
The WESA now provides that if two or more persons died in circumstances where it cannot be determined who died first, the survivorship rights are determined is if each person survived the other. Section 5 goes on to deal specifically with jointly owned assets. Where joint tenants die and it cannot be determined who died first, each joint owner is deemed to have held the property as tenants in common with the other.
Section 10 of the WESA imposes a general five-day survivorship rule, whereby a person who does not survive a deceased person for five days (or any longer period provided in an instrument) is deemed to have predeceased the deceased person for all purposes relating to the deceased person’s estate.
The five-day provision required to inherit applies even to the survivorship rules of joint tenants. If there are two or more joint owners who all died and it cannot be determined that any one of them survived the others by at least five clear days, the property is now divided into equal shares between the estates of the owners.
6. Courts Can Cure Formal Defects in Wills to Make Them Valid
S.58, the curative provision gives the court the power to grant relief in certain circumstances where the historically required testamentary formalities have not been met. The court is empowered to rectify an error in a valid will to allow it to be carried it out as per the will maker’s intentions. The clear intent of this provision is to allow the court to focus on what was the testator’s intent, rather than on technical deficiencies in the execution of the will.
There will likely be much litigation over this provision in the future, but other jurisdictions such as Manitoba, Saskatchewan and Australia have similar provisions and generally speaking, the courts there have taken into consideration the finality of the document and the authenticity and degree of connection of the recorded document with the deceased.
The record may even include a document that is recorded or stored electronically, and if the court is of the view that the document represents the deceased’s testamentary intentions or the intention to revoke alter or revive a will or testamentary disposition, then the court can make an order that the recorded document is fully effective as the will or part of the will, or revocation, alteration or revival.
Great latitude has seemingly being granted as to what type of document will be admitted as a will, and it would appear that a record can be any form of writing or marking on any medium, whether electronic, paper or otherwise such as e-mails, text messages or even scraps of paper. This is a non-exhaustive list, and the courts will consider any number of items in their totality to be the final record of the will maker.
7. Courts Can Rectify an Otherwise Invalid Will
Following upon section 58 of WESA, section 59 radically expands the courts’ powers to rectify an error in a valid will and allow it to carry out the will maker’s intentions.
It does not matter if the court is sitting as a court of construction or as a court of probate, as its previous power confining into deleting words from the will that the probate stage.
The primary purpose of section 59 is to have the court rectify the will if the court determines that the will fails to carry out the will maker’s intentions because of such things as a clerical error, a misunderstanding on the part of the lawyer who prepared the will or the will maker.
Rectification of Will
59 (I) On application for rectification of a will, the court, sitting as a court of construction or as a court of probate, may order that the will be rectified if the court determines that the will fails to carry out the will-maker’s intentions because of
(a) an error arising from an accidental slip or omission,
(b) a misunderstanding of the will-maker’s instructions, or
(c) a failure to carry out the will-maker’s instructions.
(2) Extrinsic evidence, including evidence of the will-maker’s intent, is admissible to prove the existence of a circumstance described in subsection (I).
(3) An application for rectification of a will must be made no later than 180 days from the date the representation grant is issued unless the court grants leave to make an application after that date.
(4) If the court grants leave to make an application for rectification of a will after 180 days from the date the representation grant is issued, a personal representative who distributes any part of the estate to which entitlement is subsequently affected by rectification is not liable if, in reasonable reliance on the will, the distribution is made
(a) after 180 days from the date the representation grant is issued, and
(b) before the notice of the application for rectification is delivered to the personal representative.
(5) Subsection (4) does not affect the right of any person to recover from a beneficiary any part of the estate distributed in the circumstances described in that subsection.
Also of great significance is the addition of a subsection allowing for the introduction of extrinsic evidence, including evidence of the will maker’s intent, to prove the existence of a circumstance described in section 1.
There is a 180 day limitation for rectification of a will from the date the representation grant is issued unless the court grants leave to make an application after that date
8. Removal of Executor
One of the most common complaints of estate litigants is the role, choice or behavior of the executor chosen by the deceased, and the Courts are reluctant to remove an executor without valid reasons.
The non co operative executor can now more easily be removed , and in fact be deemed to be removed, for non co-operation, and this is a very beneficial and long over due change.
S 25 of WESA allows for the removal of an executor or trustee where a Citation served on the executor is ignored or not complied with.
Under 25-11(2) the citation must also be personally served on each alternate executor in the event that the first executor fails to comply with the 14 day rule, or file an Answer.
Under Section 25-11 (5), a person cited is deemed to have renounced executorship if:
a) the person cited refuses to comply with providing the information or filing an Answer under 25-11 (4), is deemed to have renounced executorhip.
b) or obtain a grant of probate within 6 months of the date the citation was served.
5-11 (6) deals with the effect of failing to answer a Citation or refusing probate:
1) if the person fails to apply for probate , provide an Answer or fails to provide the information, he or she is deemed to have renounced the executorship.
In that event, the citor or another person interested in the estate may apply for:
1) a grant of probate or administration with will annexed;
2) an order under S 58 curing deficiencies in the testamentary document;
3) that the testamentary document be proved in solemn form;
4) if the testamentary document is in the possession of a third party, the issuance of a subpoena under Rule 25-12 to require the cited person to file the testamentary document
9. Powers of Subpoenas for Testamentary Documents Has Increased
Following upon the common problem of the noncompliant executor, Rule 25- 12 of WESA greatly expands the subpoena process in obtaining testamentary documents and grants.
Rule 25-12 (1) allows a person to apply for a subpoena to require a person to deliver to the registry a testamentary document and list of other estate related documents.
The subpoena is a document that can require a person to deliver up a document to the registry, including any one or more of the following:
-An estate grant
-a foreign grant
-an authorization to obtain receiving information
-an authorization to obtain state information
-a testamentary document
The subpoena is filed in the court registry along with the supporting affidavit in form P35.
The court must be initially satisfied that the documents have been requested and have not been produced and are relevant.
The court in fact is empowered to order the arrest and imprisonment of a non-complying executor who has been served with such a subpoena and fail to comply with same. This is a very powerful new tool that has been added to the frustrated estate litigator who has had to deal with non-responsive personal representatives.
10. Priority of Ranking of Potential Administrators
This is a brand new provision to WESA.
The spouse has priority but may also nominate someone else , be it a child of the marriage or a financial institution, and that appointed party will have the same priority to be appointed the administrator.
The spouse does not require the consent of the children, nor does the person being appointed need consent.
One of the problems with the current Estate Administration Act was that it did not provide a list of persons entitled to apply for letters of administration in terms of who had first priority, and had no guidelines at all with respect to who might apply successfully to be appointed administrator with will annexed.
Sections 130 and 131 of the WESA address these issues.
Under s. 130, the following have priority in the following order:
(a) the spouse of the deceased person or a person nominated by the spouse;
(b) a child of the deceased person having the consent of a majority of the children of the deceased person;
(c) a person nominated by a child of the deceased person if that person has the consent of a majority of the deceased person’s children;
(d) a child of the deceased person not having the consent of a majority of the deceased person’s children;
(e) an intestate successor other than the spouse or child of the deceased person, having the consent of the intestate successors representing a majority in interest of the estate, including the intestate successor who applies for a grant of administration;
(f) an intestate successor other than the spouse or child of the deceased person, not having the consent of the intestate successors representing a majority in interest of the estate, including the intestate successor who applies for a grant of administration;
(g) any other person the court considers appropriate to appoint, including, without limitation, the Public Guardian and Trustee, subject to the Public Guardian and Trustee’s consent.
In the case of an administration with will annexed, the priority is as follows (s. 131):
(a) a beneficiary who applies having the consent of the beneficiaries representing a majority in interest of the estate, including the applicant;
(b) a beneficiary who applies not having the consent of the beneficiaries representing a majority in interest of the estate;
(c) any other person the court considers appropriate to appoint, including the Public Guardian and Trustee, subject to the Public Guardian and Trustee’s consent.
The court retains the ability to depart from these schemes in special circumstances (WESA, s. 132).
This section is similar to the current s 7 of the Estate administration Act which permits the Court to ignore the hierarchy and appoint an administrator form elsewhere. This is especially the case with insolvent estates or other special circumstances
132 (I) Despite sections 130 and 131, the court may appoint as administrator of an estate any person the court considers appropriate if, because of special circumstances, the court considers it appropriate to do so.
(2) The appointment of an administrator under subsection (I) may be
(a) conditional or unconditional, and
(b) made for general, special or limited purposes.
11. Notices of Dispute Replace Caveats
Prior to WESA, a disputant of an estate could file a caveat to prevent a grant of probate, which was good for six months, and which could be renewed as many times as necessary for a further six months at a time.
Rule 25-10 makes many significant changes to that of caveats, first and foremost by changing their name to Notices of Dispute.
The Notice of Dispute will still prevent the issue of an estate grant, unauthorized nation to obtain state information, and authorization to obtain receiving information, and the receiving of a foreign grant under Rule 10 (8).
It can however only be filed once S 10 (2)
The new Form 29 requires more information on the grounds that the notice is filed than previously necessary under a caveat.
It may be amended once with leave of the Court 10(4)
10(6) Allows for a Court to renew a Notice of Dispute for any time it considers appropriate on certain criteria, no prejudice being one of them.
Under S 10(10) the Court may remove a Notice of Dispute on the grounds of S 10(11), that the filing is not in the best interests of the estate.
Rule 10 (12) States that the N0tice to Dispute ceases in one year from the date of filing, subject to it having been renewed.
A great deal more information is now required to complete the Notice of Dispute than was required for a probate caveat.
At the time of the preparation of this paper, the WESA legislation has been in effect just over one month. Since it mostly applies to deaths that have occurred after March 31, 2014, many of its provisions have not yet been brought before the court due to the various transitional provisions provided. As stated previously, the legislation by and large was long overdue and for the most part is not earth shattering or even radical. It will however, I predict, result in many years of litigation relating particularly to the definitions of “spouse”, and the powers of the court to rectify and determine a document to be a valid will. Overall, it is generally quite favourable to my legal practice in acting for persons who have been disinherited.