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The Wills Variation Act - The Basics
Despite almost eight decades of judicial interpretation, there still remains many questions and concerns about the Wills Variation Act as it applies to today’s society. There are many conflicting decisions that are hard to reconcile. Critics of the Act argue that it has eroded testamentary freedom far too much, and allege that it has gone much further than providing the “maintenance” that the Act was mandated to provide. A) The Concept of Testamentary Freedom The British common law gave serious effect to the principle that: “everyone is left free to choose the person upon whom he
will bestow his property after death entirely unfettered in the
selection he may think proper to make. He may disinherit, either
wholly, or partially, his children and leave his property to strangers
to gratify his spite, or to charities to gratify his pride, and
we must give effect to his will, however much we condemn the course
he has pursued. In this respect the law of England differs from
that of other countries. It is thought better to risk the chance
of an abuse of power arising form such liberty than to deprive men
of the right to make such a selection as their knowledge of the
characters, of the past history, and the future of their children
or other relatives may demand.” It was felt that a testator should be better able to judge his testamentary obligations that the state through a legislated scheme. Contrary to this,most of continental Europe opted for statutory schemes. However, it is against the backdrop of “testamentary autonomy”
that abuses of this concept
B) The First Legislation and Its Evolution New Zealand was the first common law jurisdiction to seriously question and change the concept of testamentary freedom on the basis that the family had a right to be protected. In October of 1900 it passed the Testator’s Family Maintenance Act. British Columbia passed a statute with the same name and almost identical provisions in 1920. Historically the statue was passed at a time of active social reform following the First World War, a world wide flu epidemic, the rise of the Bolsheviks in Russia, and a strong desire for greater social stability for a rising working class. Great lobbying for the legislation was conducted by the various Women’s Organizations of the day. The initial” Dependants Relief” legislation that permitted the courts to interfere with testamentary freedom, has undergone, and continues to undergo, substantial changes. The rationale for these judicial changes has been to allow the law to adjust to changing economic considerations and contemporary social norms.
A) Spouse and Children only may Apply The remedy is discretionary. Section 2 of the Act states: “ Despite any law or statute to the contrary, if a testator dies leaving a will that does not, in the court's opinion, make adequate provision for the proper maintenance and support of the testator's wife, husband or children, the court may, in its discretion, in an action by or on behalf of the wife, husband or children, order that the provision that it thinks adequate, just and equitable in the circumstances be made out of the testator's estate for the wife, husband or children.” It is important to note that the definition of spouse includes a person ,married to another, as well as a person who is living and cohabiting with another person in a marriage like relationship, including a marriage-like relationship between persons of the same gender, and has lived and cohabited in that relationship for a period of at least two years. Children includes adopted children, but not step children.
In Currie Estate v Bowen 35 B.C.L.R. (2d) 46, a husband died 6 weeks before his wife. He did not provide adequately for his wife. The wife died before she completed her claim. Her children, as her personal representatives were allowed to maintain her claim under the act. The act did not specifically provide for this, but the court found that the right of action vested at the time of the husband’s death, and it was implied that the wife’s personal representatives had the right to bring the action.
This leading Supreme Court of Canada case involved an application by a married daughter of the testator, who had left his entire estate to his wife. The Court directed payment of an allowance to the daughter. The frequently quoted statement of law from the case is as per Duff J. : “What constitutes "proper maintenance and support" is a question to be determined with reference to a variety of circumstances. It cannot be limited to the bare necessities of existence. For the purpose of arriving at a conclusion, the Court on whom devolves the responsibility of giving effect to the statute, would naturally proceed from the point of view of the judicious father of a family seeking to discharge both his marital and his parental duty; and would of course (looking at the matter from that point of view), consider the situation of the child, wife or husband, and the standard of living to which, having regard to this and the other circumstances, reference ought to be had. If the Court comes to the decision that adequate provision has not been made, then the Court must consider what provision would be not only adequate, but just and equitable also. In exercising its judgment upon this, the pecuniary magnitude of the estate, and the situation of others having claims upon the testator, must be taken into account.”
In 1995 the Supreme Court of Canada pronounced another “ landmark” case that is now the leading case in this area of law. FACTS : After 43 years of marriage, a testator left an estate worth $315,000, amassed through the joint efforts of his widow and himself. In his will, testator left widow a life estate in the matrimonial home and made her the beneficiary of a discretionary trust of the income of the residue of the estate, with their son as trustee. Testator left the son the remainder interest in the home and residue, as well as a gift of a rental property. His widow and a disinherited son claimed against the testator's estate under the Act. HELD : Where the estate permits, all these conflicting claims should be met. Where priorities must be considered, claims based upon legal obligations should take precedence over moral claims. The testator's freedom to dispose of his property should not be interfered with lightly, but only in so far as the statute requires. Here the testator's legal obligation was to provide maintenance for his wife and a share in the family assets. Morally, it could not be just and equitable to deprive the wife of the estate in her old age simply because her husband died first. To confine her to such sums as her son E. might give her would fail to recognize her deserved independence and her moral claim. She should receive title to the matrimonial home, a life interest in the rental property and the entire residue of the estate other than the immediate gifts to the sons. The moral claim of the sons would be adequately met by the immediate gift of $10,000 each and a residuary interest in the rental property divided one?third to J. and two?thirds to E.
A widowed testator drew a will leaving her $90,000 estate to one of her three children. She wrote a letter to the court at the time, explaining her reasoning- her daughter was largely estranged, and her son was antisocial and criminal, and had been a burden to her. The daughter sued and her claim was dismissed and upheld by the appeal court.
Justice Cooper stated at p. 975:
Stout C.J. stated at pp. 969–70:
1) The courts are following the approach of Tataryn. They first see if there is a legal obligation, then if there is a moral obligation. The legal obligation takes priority over moral obligations. 2) In the case of adult children who are not dependants, moral obligations alone are sufficient basis for successful claims. 3) When an estate is large enough the court will recognize both legal and moral obligations to a spouse and moral obligations to adult independent children. An adult child is entitled to less consideration when the estate is modest. 4) When an adult child is disabled and in need , a testator owes
a moral obligation to provide, irrespective of stated contributions. 6) A greater share of an estate may be justified for a plaintiff who has provided a higher and more ongoing level of assistance and contribution to the testator. 7) The court may examine what has passed to a claimant by operation of law ( ie a right of survivorship), or passed inter vivos, and either of these may discharge all or part of a moral obligation. 8) If there was a failure to provide parental obligations to a child when the child was dependent, then this will be sufficient in the future to find that the parent breached a moral duty to the child. 9) Final settlement agreements signed between spouses should be respected by the Courts in the absence of compelling reasons to the contrary. 10) the definition of spouse includes marriage like relationships between both same sex partners as well as heterosexual relationships. Immovable property in B.C. and movable property, no matter where it is situate, that belongs to the deceased who is domiciled in B.C. at the date of death, is subject to the Act. This means that the Act will apply to a person domiciled elsewhere at the time of death, but who owned assets in B.C. The assets must devolve pursuant to a will that is valid in B.C. For example, a holograph will that is allowed in Alberta, is not allowed in B.C., so it would not validly deal with B.C. assets. It is only the net value of the assets that are subject to the act, and only the beneficial interest that is attachable. 6. No Requirement to Treat Each Child Equally The court will only intervene where the facts show that the judicious parent , acting in full knowledge of the true facts, would have made a different disposition of the estate among his adult children. Griffin v McCarthy 36 E.T.R. 129 In Cavadini v Mahaffey Estate ( 1995) B.C.A.C. 220 it was held that the law does not require a testator to treat all children equally. A) Limitation Period An action must be commenced within 6 months of the granting of letters probate or resealing of the probate. B) Duties of Executors By s. 12 of the Act, an executor is not to distribute any of the estate assets until the expiration of six months from the grant of probate, unless all persons entitled to apply under the act consent, or a court so orders. Failure to comply could make the executor personally liable for any losses. Once an action has been commenced, the executor must remain “neutral” since the executor is by law the guardian of the estate assets. The executor should present all relevant evidence before the court and primarily take the position that he or she is there to assist the court. A conflict of interst situation may well arise if the executor is also a beneficiary. C) Writ and Statement of Claim An action is commenced by writ and statement of claim. All persons who may have an interest in the action , including the executor, must be parties to the action. D) Summary Trial Available In recent years, there has been a tendency to have these actions resolved by a summary trial based on affidavits. Generally the court is able to do this where there is no necessity to assess the credibility of the competing parties. If there is a dispute as to credibility, then the matter will be referred to the trial list.
The issue of privilege will invariably arise in Wills Variation actions re the production of the professional’s file and notes. The privilege of the deceased client ( the testator) will now attach to the executor. In each case you should take your clients instructions after discussing the claim of privilege. You should consider seeking advice on this topic. Generally speaking , the claim of privilege will be upheld where the action is a Wills Variation action only ( ie doesn’t also include a claim for lack of capacity or undue influence), on the basis that the true purpose of attempting to obtain the file is not to determine the true intention of the testator, but instead is for the purpose of attempting to defeat that purpose. Gordon v Gilroy (1994) B.C.J. No. 1927, Master Joyce
The variation of a will is entirely up to the discretion of the court. The circumstances to be considered are those existing at the time that the will comes into effect, not when it was signed. Accordingly, the court will look at evidence in changes in circumstances over the intervening years, which may include things like the relative financial circumstances of the parties, the manner in which they behaved during the testator’s life, and the receipt of any loans or gifts made during the testator’s life to the detriment of claimants. Purser v Purser 31 E.T.R. 299 Tataryn strongly suggests that there is an obligation to adult dependent children. This was recognized in Newstead v Newstead Estate (1996) 11 E.T.R. (2d) 236 ( B.C.S.C.) FACTS : The testator died leaving three adult children, all of whom had tragic personal circumstances. The oldest was confined to a mental institution for ten years, the middle child had been in a foster home and drifted into a life of crime. The youngest child was severely mentally handicapped and institutionalized. The value of the estate was $950,000. The testator gave 1/25 to each child, 15/25ths to his ex-daughter -in-law, and 7/25ths to friends and charities. HELD : The court varied the will so that 1/3 of the estate went to the Public Trustee , 1/6 to the eldest child, and 1/6 share to the middle child, 1/6th to the daughter -in-law, and 1/6 to the friends and others. Two principles were clear : 1) There is a moral obligation to provide for a mentally incompetent dependant even though the dependant is a ward of the state ( in effect, a testator has a duty to absorb or reimburse the state),and 2) this same obligation exists regardless of whether or not the dependant would benefit personally from any part of the contribution. There are a few cases that illustrate that the Courts will be inclined to vary a will that does not make a generous provision for a disabled child, adult or otherwise. 10. Methods of Circumventing the Act It is important to note that the Act contains no anti-avoidance provisions. There are several anti-avoidance techniques that are frequently used quite successfully. The courts deem the Act to be remedial, and if the testator fails to take steps to avoid the Act, then he has “volunteered” to be caught by its provisions. A) Written Memorandum pursuant to S . 5 of the Act : The law does not require that the reason expressed for disinheriting an individual be justiciable- the reasons need only be rational and valid. Kelly vs Baker B.C.C.A Oct.16/96 following Bell vs Roy (1993) 75 B.C.L.R (2d) 213 (C.A.) In Kelly v Baker the court found that there was good reason by the testator to have believed that the plaintiff daughter had abandoned the family and treated her parents in a hateful and hurtful way. Under the Act, the weight to be given to evidence of the reasons for disinheriting a child is affected by the accuracy and not by morally acceptable or unacceptable content. There are many cases where estranged adult children have been disinherited by the courts. Our Court of Appeal in Price v Knutson (1987) 4 W.W.R. 128 stated that “ the moral duty imposed by the Act does not require a testator who has been rejected by a member of his family to ignore the rejection. However, if the estrangement has been caused by conduct of the testator, rather than the child, the courts will still find the testator failed to meet his or her moral obligation and revise the will. “ In Pattie v Standal 42 B.C.L.R. (3d) 211,, a child never saw his father again after age seven due to a divorce. The child’s mother did not receive child support. The deceased left his estate to his common law wife of two years. There was no memorandum to the will or other evidence as to why the child was disinherited. The court awarded the child 50% of the estate on the basis of both the failure to met the moral obligation, as well as failing his legal obligation to support his child during his lifetime. The onus is on the plaintiff to show that the reasons acted upon by the testator were” false or unwarranted”. B) Joint Tenancy Assets registered in joint tenancy do not form part of the deceased’s estate, and devolve by law to the surviving tenant. Thus, subject to the law of resulting trusts, this can be a very effective way of avoiding the act. If assets are to be transferred into joint ownership for little or no consideration, then it should be made very clear in writing that it was the intention to make a giftof the assets, so as to avoid any presumption of trust. C) Gifts While Alive ( Inter Vivos Gift ) Perhaps the best example of the court’s reluctance to interfere with a large inter vivos gift is found in Hecht v Hecht Estate 42 E.T.R. 295: The parties cohabited 6 ½ months and were married 49 days. The surviving widow was a successful businesswoman before marriage. She received $1 million under the will from an estate valued at $32 million. The testator disposed of $30 million before death, by inter vivos gifts, that were part of an estate-planning scheme. The court found that the $30 million were not assets forming part of the estate, and thus could not be contested under the act. D) Trusts while alive ( inter vivos trust) The same principles apply to the creation of a trust before death as inter vivos gifts. E) Designated Beneficiaries under Insurance and Pensions Such assets pass outside of the estate to the named beneficiary, and thus cannot be attacked under the act. F) Dying Intestate It is possible to contract out of the provisions of the Estate Administration Act dealing with intestacy. Thus this could be an alternative where the testator wished to benefit those persons who would benefit on an intestacy. ie a second spouse contracts out of the Act, and the testator leaves estate on intestacy to his children from a first marriage. G) Contracting Out Generally, the Wills Variation Act is remedial and cannot be contracted
out of. As For example, in Lobe v Lobe Estate 37 B.C.L.R. (3d) 138 (B.C.C.A) FACTS : HELD : The wife appealed and it was dismissed. The decision of Tataryn is the leading case that the Courts invariably follow and quote. In each case the Courts will carefully enquire as to whether the testator’s moral and legal obligations have been discharged. The Tataryn decision has certainly clarified the law with respect to the legal obligations owed towards a spouse. It has also stated that both legal and moral obligations should be met if the estate is large enough to satisfy both claims. In my view however, there still appears to be a fair amount of
judicial inconsistency regarding the predictability as to whether
a testator has met his or her moral obligations, especially to adult
independent children. This is partly caused by the simple fact that
the remedy is discretionary, and that Judges ( lest we forget) are
human and have biases and preferences.
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