Wills Variation- Child Awarded %50

Adult Child's Share In Will Doubled to 50% For Invalid Reasons

Share In Will Doubled to 50% For Adult Child Under Wills Variation Act

Schipper v. Schipper Estate 2010 BCSC 1067

The Plaintiff adult daughter was only child of the testator and her husband. The daughter had very close relationship with her parents until about three years before the testator’s death. The Testator’s will gave 25 per cent of estate to the daughter, 50 per cent to an adult nephew J, and 25 per cent to adult nephew A ..

The Testator’s rationale was that daughter had not visited her for three years, had not shown interest in her parents, and was not in need of financial assistance .The daughter brought action for variation of testator’s will under Wills Variation Act to make adequate provision for her and the action was allowed. The daughters share was increased to %50 with J receiving 2/3 of the remaining and one third of the remaining to nephew A. Daughter found to be loving ,faithful child.The daughter’s claim was not based on financial need as her combined assets with her husband were $980,000.

The sufficiency of reasons for disinheritance was taken as part of the question of whether reasons of the testator were rational . The testator overreacted to perceived lack of interest by daughter .the testator had little factual information about daughter’s financial need .The reasons expressed by testator for making dispositions were not rational , nor did they provide a proper basis for supporting provision made. The reasons did not have logical connection with reduced inheritance.

16 A useful summary of the legal principles applicable to cases of this nature is set out in the reasons for judgment of Madam Justice Satanove, now Madam Justice Kloegman, of this court in Clucas v. Clucas Estate, [1999] B.C.J. No. 436(B.C. S.C.), at para. 12:

Many cases have been decided under the Wills Variation Act. The considerations governing the court’s decisions have evolved over time and there is a fairly comprehensive set of competing principles to which effect must be given. I have endeavoured to summarize these as follows:

1. The main aim of the Act is the adequate, just and equitable provision for the spouses and children of testators. (Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807)

2. The other interest protected by the Act is testamentary autonomy. In the absence of other evidence a Will should be seen as reflecting the means chosen by the testator to meet his legitimate concerns and provide for an ordered administration and distribution of his estate in the best interests of the persons and institutions closest to him. It is the exercise by the testator of his freedom to dispose of his property and is to be interfered with not lightly but only insofar as the statute requires. (Tataryn, supra)

3. The test of what is “adequate and proper maintenance and support” as referred to in s. 2 of the Act is an objective test. The fact that the testator was of the view that he or she adequately and properly provided for the disinherited beneficiary is not relevant if an objective analysis indicates that the testator was not acting in accordance with society’s reasonable expectations of what a judicious parent would do in the circumstance by reference to contemporary community standards. (Tataryn, supra; Walker v. McDermott, [1931] S.C.R. 94; Price v. Lypchuk Estate(1987), 11 B.C.L.R. (2d) 371 (C.A.); Dalziel v. Bradford et al.(1985), 62 B.C.L.R. 215 (B.C.S.C.))

4. The words “adequate” and “proper” as used in s. 2 can mean two different things depending on the size of the estate. A small gift may be adequate, but not proper if the estate is large. (Price v. Lypchuk Estate, supra)

5. Firstly, the court must consider any legal obligations of the testatrix to her spouse or children and secondly, the moral obligation to her spouse or children. (Tataryn, supra)

6. The moral claim of independent adult children is more tenuous than the moral claim of spouses or dependent adult children. But if the size of the estate permits, and in the absence of circumstances negating the existence of such an obligation, some provision for adult independent children should be made. (Tataryn, supra)

7. Examples of circumstances which bring forth a moral duty on the part of a testator to recognize in his Will the claims of adult children are: a disability on the part of an adult child; an assured expectation on the part of an adult child, or an implied expectation on the part of an adult child, arising from the abundance of the estate or from the adult child’s treatment during the testator’s life time; the present financial circumstances of the child; the probable future difficulties of the child; the size of the estate and other legitimate claims. (Dalziel v. Bradford, supra and Price v. Lypchuk, supra)

8. Circumstances that will negate the moral obligation of a testatrix are “valid and rational” reasons for disinheritance. To constitute “valid and rational” reasons justifying disinheritance, the reason must be based on true facts and the reason must be logically connected to the act of disinheritance. (Bell v. Roy Estate(1993), 75 B.C.L.R. (2d) 213 (B.C.C.A.); Comeau v. Mawer Estate, [1999] B.C.J. 26 (B.C.S.C.); and Kelly v. Baker(1996), 15 E.T.R. (2d) 219 (B.C.C.A.))

9. Although a needs/maintenance test is no longer the sole factor governing such claims, a consideration of needs is still relevant. (Newstead v. Newstead(1996), 11 E.T.R. (2d) 236 (B.C.S.C.))

17 With respect to consideration of the ascertained reasons given by a testator either as set out in a written statement or as found by the court, in McBride v. McBride Estate, 2010 BCSC 443(B.C. S.C.), upon a careful review of the applicable legal authorities, Madam Justice Ballance noted as follows:

135 The approach to be taken by the court in relation to a testator’s reasons for disinheriting or providing a modest benefit only to a child starts with consideration of the Court of Appeal decision in Bell v. Roy Estate(1993), 75 B.C.L.R. (2d) 213, 48 E.T.R. 209 (C.A.)[Bell]. In Bell, the testator left a will under which she bequeathed a small gift to one adult son, nothing to her adult daughter, and left the lion’s share of her estate to her other adult son. Contemporaneously with making her will, the testator wrote a separate letter purporting to explain the unequal treatment of her children, and in particular the disinheritance of her daughter. The trial judge concluded that the reasons offered by the testator for disinheriting her daughter were accurate and sufficient to support the will. Accordingly, variation of the will was refused. The Court of Appeal’s dismissal of the daughter’s appeal came before the Supreme Court of Canada issued its decision in Tataryn.

136 In his analysis in Bell, Goldie J.A., for the Court, placed heavy reliance on the post-Walker legislative amendments to the Act enacted in 1971 (now s. 5), which permit the court to accept evidence of the testator’s ascertainable reasons for making or not making the dispositions in the will relative to his or her spouse and children. That section stipulates that where such evidence is in the form of a written statement signed by the testator as in Bell, the court, in weighing the statement, must have regard to all of the circumstances which may reasonably support an inference about the accuracy or otherwise of it.

137 In addressing those statutory amendments, Goldie J.A. stated, at para. 38:

38 … the weight to be given evidence of the testator’s reasons is affected by its accuracy and not by morally acceptable or unacceptable content. I do not say the legislature swept away any objectively determined moral duty. I do say, however, that the actual intentions of the testator are to be given an effect which is largely denied by reliance upon the notionally objective reasonable testator.

138 In Bell, the Court of Appeal held that where financial need is not a factor, if the court finds that the testator’s reasons purporting to explain a disinheritance are valid and rational, the testator’s moral duty in respect of that child is negated. The Court held that the burden then shifts to the plaintiff to show that the reasons acted upon by his or her parent were false or unwarranted.

139 Goldie J.A. acknowledged that this approach placed greater emphasis on a testator’s intentions and “less on those which might be imputed to her by reference to the reasonable testator” (para. 36). He endorsed giving effect to a testator’s subjective rationale which would be “largely denied” by employing an objective reasonable testator standard.

140 The Court of Appeal reaffirmed the Bell model after Tataryn was decided at the Supreme Court level. In Kelly v. Baker(1996), 82 B.C.A.C. 150, 15 E.T.R. (2d) 219 (C.A.)[Kelly], the Court of Appeal applied the Bell analysis and concluded that the testator had valid and rational reasons for disinheriting the claimant. As to the content of the reasons, Kelly stated that the testator’s reasons for disinheriting a child need not be justifiable. The Court observed that the law merely requires that the reasons are valid, meaning based on fact, and rational in the sense that there is a logical connection between them and the act of disinheritance (para. 58).

141 One cannot quarrel with the outcomes in Bell and Kelly in light of their particular facts. The thorny issue is that the model of inquiry endorsed by Bell and followed in Kelly effectively precludes an assessment of whether the testator’s reasons are objectively justifiable from the standpoint of the contemporary judicious parent of Tataryn. In Tataryn, McLachlin J. made passing mention of Bell as an example of a case where a testator’s moral duty was seen to be negated. Notably, she did not say nor delve into whether the proposition espoused by Goldie J.A. to negate that moral duty was sound. If the decisions of Bell and Kelly mean that the applicable test is whether a testator has valid (i.e. factually true) and rational (i.e. logically connected to the disinheritance) reasons for disinheriting a child, even where the reasons are unworthy of an objectively judicious parent based on contemporary standards, then they are difficult to reconcile with the fundamental precepts of Tataryn and the search for contemporary justice in the circumstances.

142 For the most part, the apparent incompatibility between Bell and Kelly on the one hand, and Tataryn on the other, has not been squarely confronted by this Court (an exception is found in Hammond v. Hammond(1995), 7 B.C.L.R. (3d) 25, 7 E.T.R. (2d) 280 (S.C.)). I would respectfully observe that there appears to be a growing trend in the authorities decided in the aftermath of Kelly to favour rejection of objectively insufficient reasons on the pretence that they are simply not rational.

18 Therefore, on that basis, sufficiency of the reasons may be taken as part of the question of whether the reasons of the testator are rational. I agree with this approach.

19 In the recent decision of the Court of Appeal in Graham v. Chalmers, 2010 BCCA 13(B.C. C.A.), Madam Justice Kirkpatrick held that the first question of whether the will makes adequate provision for the claimant under the statute is to be decided without regard to the claims of others who have no claim under the statute. She said as follows at paragraph 38:

38 In approaching the analysis in this way, I consider that the trial judge erred in two ways. First, she failed to first consider whether the Will made adequate, just and equitable provision for Janet Graham regardless of the claims of the grandchildren who were not owed any legal or moral obligations under the Act, but whose claims should be met in deference to testator autonomy after the moral claims were met. Second, the trial judge appears to have analyzed Janet Graham’s claim on the footing that she was presumptively entitled to a 50% share of the estate, rather than considering whether the Will made a bequest within a range of appropriate options.

77 Counsel provided me with a number of useful authorities relating to the decisions in other cases, which it is argued, have some similarity to this one, and which I have had the benefit of considering. In the interest of brevity I will not refer to them. I will refer simply to one of the decisions. That is the decision of Mr. Justice Williams of this court in Smith v. Smith Estate, 2009 BCSC 1737(B.C. S.C.). At paragraph 75, Mr. Justice Williams says:

It is a trite observation that each fact pattern, like each snowflake, is unique. None will be exactly like any other, and the subtle (and not so subtle) differences and distinctions will inform the ultimate outcome.

78 I pause to note that that comment from Justice Williams was following on a review of a number of authorities.

79 Going on with the decision in Smith v. Smith Estate, at paras.

76-77 Mr. Justice Williams says:

76 I conclude that where adult children advance a moral claim for inheritance, the merit of such a claim will be assessed in light of a number of considerations. These may include the nature of the relationship between the parent and the child, the ability of the estate to afford a bequest to the child (which in turn implicates an assessment of the other competing claims) and the financial circumstances of the claiming child, the plaintiff.

77 Obviously there will be other considerations as well. Ultimately, the court is required to make a judgment, often a difficult one.

80 I recognize that the plaintiff is an independent adult, and therefore, in accordance with the authorities, the moral claim of the plaintiff is more tenuous than that of spouses or dependent children. However, I view the provision made as inadequate.

81 Most significantly, the plaintiff was the only child of the testator. She was a faithful, loving and dutiful child, notwithstanding the apparent slight chill in the relationship over the final few years. There are no other claimants to whom a moral duty is owed under the statute. As some evidence of the standard that should be considered, I note that under the intestacy provisions of the Estate Administration Act, R.S.B.C. 1996, c. 122, the entire estate would pass to the plaintiff. In one of the letters from her mother, in 1988, her mother had said that she, that is the plaintiff, was their sole heir. This would continue to be a not unreasonable expectation on the part of the plaintiff, after perhaps some bequest in favour of Jacob De Lange.

Elderly Spouse Awarded The Home and Half of the Residue

Elderly spouseOrr v Orr 2013 BCSC 208 is a wills variation action d brought by an 82 year old surviving spouse who was not adequately provided for in her husband’s last will, and whom was awarded the house and half the residue.

He died at age 78 and left his spouse and 6 children. The assets were the home worth $417,000 and adjacent acreage worth $780,000. In his will, he left the home to one son wiht a life estate to his wife for the remainder of the time she lived in the home., and the estate residue to the wife. Both the spouse and one daughter, who both lived modestly and had health issues, brought action to vary the will. The daughter supported her mother’s application. The wife testifies she may ahve to soon move intop assisted living and wihtout the ability to sell the home, she lacked the financial mewans to pay for her care. Expert evidence was accpeted by the court that the acreage could take years to sell. The court varied the will to provide the wife with the house and %50 of the residue , and %25 of the residue to the daughter and the son.The leading authority on the manner in which this section is to be applied is Tataryn v. Tataryn Estate. McLachlin J. (as she then was), writing for the court, noted the two interests protected by the Act, one being to ensure “adequate, just and equitable” provision for spouses and children, and the other being respect for testamentary autonomy. What amounts to “adequate, just and equitable” provision is to be assessed in light of contemporary standards. Doing so involves addressing two norms. McLachlin J. described these two norms at para. 28, writing:

[28] …first are the obligations which the law would impose on a person during his or her life were the question of provision for the claimant to arise. These might be described as legal obligations. The second type of norms are found in society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards. These might be called moral obligations, following the language traditionally used by the courts. Together, these two norms provide a guide to what is “adequate, just and equitable” in the circumstances of the case.

[29] As to the legal obligations of a testator, an indication of their content lies in the obligations the law would impose during the testator’s life. In that regard, reference may be had to the various statutory and common law obligations and entitlements that spouses have to one another. The precise dimensions of the moral obligation are somewhat less clear, but they go beyond a testator’s legal obligations. As Neilson J.A. put it in Hall v. Korejwo, 2011 BCCA 355, a testator’s legal obligations are the starting point, a point which may be “amplified” by a substantial moral obligation (at para. 47). The nature and strength of the moral claims will vary according to the circumstances. Among the relevant circumstances will be the testator’s “legitimate concerns”, which may extend to such things as the reasons for making or not making a particular bequest. Yvonne’s claim is rooted in the notion that her father owed her a moral obligation to provide for her future because of what the future likely holds for her.

[30] Finally, in terms of a hierarchy within which to address these competing interests and claims, McLachlin J. held that testamentary autonomy must give way to the “adequate, just and equitable” provision of a spouse or children. As between competing legal and moral obligations of the testator, the former will generally prevail over the latter. The moral obligations are to be given weight according to their relative strengths and weaknesses taking into account the changes to the claims which arise from the fact of the testator’s death.

[31] Thus, Tataryn v. Tataryn Estate mandates a two-stage analysis. At the first stage, the issue is whether the Will makes “adequate, just and equitable” provision for the applicant spouse or child. If so, that is the end of the matter. If not, the second stage requires the court to consider what would be an “adequate, just and equitable” provision.

[32] The facts in the two cases noted above are sufficiently similar to those in the matter at hand that some guidance can be taken from their results. In Tataryn v. Tataryn Estate, the deceased and his spouse had been married for 43 years. They had two children. The deceased held all of their assets in his name. His estate was worth just over $300,000 and consisted of his home, a rental property and approximately $125,000 in cash. Mrs. Tataryn had about $125,000 in her name. He wished to disinherit one of his sons and explained why in a clause in his Will. Because he was concerned that if he left his estate to his wife she would benefit the son he wished to disinherit, he left his entire estate to his favoured son, save for granting his spouse a life estate in the family home and making her a beneficiary of a discretionary trust of the income from the residue of his estate.

[33] Both Mrs. Tataryn and the disinherited son applied under the Wills Variation Act. The trial judge varied the Will granting Mrs. Tataryn a life estate in the rental property (thus providing her with an assured income). He directed an immediate gift of $10,000 to each son and ordered that on Mrs. Tataryn’s death, the residue of the estate be divided two-thirds to the favoured son and one-third to the other son. The Court of Appeal made minor adjustments to this order.

[34] The Supreme Court of Canada, applying the principles set out above, gave Mrs. Tataryn title to the family home; they also gave her a life interest in the rental property and the entire residue of the estate, save for immediate gifts of $10,000 to each of the sons. Upon the expiration of Mrs. Tataryn’s life interest in the rental property, that property was to pass to the sons in the same proportions as the trial judge sought to divide the residue.

[35] Counsel for Mrs. Orr points to Hall v. Korejwo in support of his position. In that case, the claimant common law spouse had been in a relationship with the deceased for about four years when he died. He was 20 years her senior. The deceased had two sons, from whom he had been estranged at various points during his life. By his Will, he purported to leave $10,000 to one of his sons, nothing to the other (because he had gifted him $93,000 prior to his death), and the residue to his common law spouse.

[36] The Hall estate was worth $438,000. The trial judge, on the application of one of his sons, varied the Will to provide that the common law spouse’s interest was a life interest only and that, upon her death, the residue was to go to the applicant son. Mr. Hall’s son was disabled and living in subsidized housing. He was unable to work and had assets totalling $90,000. The common law spouse had a modest pension income and few assets.

[37] The Court of Appeal allowed the appeal and increased the gift to the son from the $20,000 the trial judge thought proper to $60,000, and left the entire residue to the common law spouse. Thus, the common law spouse received the bulk of the estate. Significant to her moral, if not legal, claim was the fact that Mr. Hall had promised to “look after” her both when she moved in with him and later when he prepared his first Will. She had cared for him during his terminal illness.

[38] With the foregoing in mind, I turn to Mrs. Orr’s claim. Under the Will, she receives everything except the house. In addition, she has the right to live in the house as long as she is able to. As to Mrs. Orr’s legal claim, like Mrs. Tataryn, while Mr. Orr’s legal obligation to her had not crystallized by the time he died, the obligation existed. Had they separated, there is little doubt she would have shared in all the assets of the estate and been entitled to reasonable support. Like Mrs. Tataryn, she is entitled to at least that much upon her husband’s death. Also like Mrs. Tataryn, Mr. Orr owed Mrs. Orr a moral obligation. That obligation was to provide for her during the years remaining to her. While there is no direct evidence on the point, I infer that Mr. and Mrs. Orr regarded their accumulated assets as there for their remaining years.

Lost Will Results In Presumption of Intestacy

Thierman Estate v Thurman 2013 BCSC 503, involved a testator who died in 2010 at the age of 92, leaving a copy of his 2006 will in a dresser or in his bedroom. A search for the original will that had been in his safety deposit box, and the rest of his home, turned up nothing. There was evidence indicating that the testator had received the original will in 2006 and placed it in his safety deposit box as he told his lawyer he would do. There was also evidence however that he accessed the safety deposit box shortly before his death. The court found that the testator did so in order to remove the will and to destroy it before his death, intending to revoke it. Accordingly the court ordered that sense the original will was missing, the deceased died intestate.The petitioner relies on the rebuttable presumption referred to in Haider v. Kalugin, 2008 BCSC 930 at paras. 9-11:

[9] If a Will last known to be in custody of testator is not found at his death, the presumption is that the testator destroyed it with the intention of revoking it (“animo revocandi”). However, that presumption may be rebutted by evidence, written or oral, of the facts. The strength of the presumption will depend upon the character of the custody which the testator had over the Will: Sugden v. Lord St. Leonards (1876), 1 P.D. 154 (English C.A.).

[10] In Sigurdson v. Sigurdson [1935] 2 D.L.R. 445 (S.C.C.), at paragraph 49, Davis J. said:

[49] It needs very clear and convincing evidence to establish what is alleged to be a lost will. … The person propounding such a will has a burden of proof that persists throughout the whole trial to satisfy the court at its conclusion that the will is in fact lost and was not destroyed by the testator with the intention of putting an end to it. Each case of course turns upon its own facts but the principles respecting the well-settled presumption against the Will must be applied to the facts.

[11] In Welch v. Phillips (1836) 1 Moo PC 299, at 302, referred to in Bobersky Estate (Re) [1954] A.J. No. 12 (Alta Dist. Crt.), at paragraph 6, the court said:

[6] If a will traced to the possession of the deceased, and last seen there, is not forthcoming on his death, it is presumed to have been destroyed by the deceased himself; and that presumption must have effect, unless there is good and sufficient reason to repel it. It is a presumption founded on good sense, for it is highly reasonable to suppose that an instrument of so much importance would be carefully preserved, by a person of ordinary caution, in some place of safety and would not be either lost or stolen, and if, on the death of a maker, is not found in his usual repositories or else where he resides, it is in a high degree of probable that the deceased himself has purposely destroyed it. But this presumption, like all others of fact, may be rebutted by others, which raises a higher degree of probability to the contrary.

[43] Although some cases, such as McBurnie v. Patriquin [1975] N.S.J. No. 447 (S.C.(A.D.)), refer to the “very heavy burden” upon the party attempting to rebut the presumption, I do not find such language helpful in explaining the standard of proof: see Pecore v. Pecore, 2007 SCC 17; and Jorsvick Estate, 2011 BCSC 528. The presumption recognizes that the burden of proof is on the party attempting to rely on a non-original copy of a will. Thus, the presumption of destruction of a will that had been in the testator’s possession but cannot be found on his death may be rebutted by evidence establishing on a balance of probabilities that the will was inadvertently lost or misplaced.

[44] At paras. 13-14 of Haider v. Kalugin, the Court enumerates some of the factors to be considered in deciding whether the presumption applies, and if so, whether it has been rebutted:

[13] Some of the factors considered in determining whether the presumption has been overcome are:

* whether the terms of the Will itself were reasonable: Pigeon Estate v. Major, [1930] S.C.R. 252 (S.C.C.);

* whether the testator continued to have good relationships with the beneficiaries in the copy of the Will up to the date of death: Pigeon, supra;

* where personal effects of the deceased were destroyed prior to the search for the Will being carried out: Pigeon, supra;

* the nature and character of the deceased in taking care of personal effects: Pigeon, supra;

* whether there were any dispositions of property that support or contradict the terms of the copy sought to be probated: MacBurnie v. Patriquin, supra; Anderson v. Kahan Estate, [2006] B.C.J. No. 716 (B.C.S.C.);

* statements made by the testator which confirm or contradict the terms of distribution set out in the will: Bobersky Estate, supra, Anderson, supra, Holst Estate v. Holst, [2001] B.C.J. No. 1560 (B.C.S.C.), Re Green Estate, [2001] A.J. No. 1253 (Alta Q.B.);

* whether the testator was of the character to store valuable papers, and whether the testator had a safe place to store the papers: Bobersky Estate, supra, Brimicombe v. Brimicombe Estate, [2000] N.S.J. No. 157 (N.S.C.A.);

* whether there is evidence that the testator understood the consequences of not having a Will, and the effects of intestacy: Bobersky Estate, supra;

* whether the testator made statements to the effect that he had a will: Bobersky Estate, supra.

[14] However, the presumption of revocation does not apply where the Will cannot be traced to the possession of the testator: Brimicombe v. Brimicombe Estate, supra, at paragraph 7.

“Wishes” and “Requests” Are Not Legally Binding In Will Construction

Will Construction

Rudaczyk Estate v Ukrainian Evangelical Baptist Assn. 1989 ( 34) ETR 231 involved a court application to interpret and construct a will with a memorandum executed the same time as the will and in accordance with the requirements for execution of the will. The memorandum was not referred to in the will, and it stated” It IS MY WISH that you set aside one quarter of the residue of my estate for the benefit of my niece in the Ukraine–and to use this sum for the purchase and mailing of food, clothing and other articles as my said niece, may request and you in your absolute discretion shall think fit”. the Court held that the use of words like “wish” or Desire are precatory and not legally binding, and did not reduce the gift to the residuary beneficiaries to three quarters of the residue.In Johnson v. Farney (1913), 29 O.L.R. 223,14 D.L.R. 134, an appeal from Chancellor
Boyd, Meredith CJ.O. counseled against making expression of a wish or request of a testator
mandatory so as to create a trust. He observed, at 135-136, D.L.R.:

What the Court has to do is to find out what, upon the true construction, was the meaning of the testator, rather than to lay hold of certain words which in other wills have been held to create a trust, although on the will before them it is satisfied that that was not the intention: and, in construing the will in question, in the language of Cotton, L.J., In re Adams and Kensington Vestry (1884), 27 Ch. D. 394,410, ‘what we have to look at is the whole of the will… and if the confidence is that the widow will do what is right as regards the disposal of the property,’ we ‘cannot say that that is, on the true construction of the will, a trust imposed upon her.’

The Court ought to be very careful not to make words mandatory which are a mere indication of a wish or a request. The whole will must be looked at, and the Court must come to a conclusion as best it can in construing, not one particular word, but the will as a whole, as to whether the alleged beneficiary is or is not a mere trustee or whether he takes beneficially with a mere super-added expression of a desire or a wish that he will do something in favour of a particular object, but without imposing any legal obligation:

per the Master of the Rolls in In re Atkinson, 80 L.J. Ch. 370, at p. 373.

Reference may also be made to the statement by Fletcher Moulton, L.J., in the same case (p. 374), of the principle on which the Courts act in determining whether or not a precatory trust is created, and to the statement of Buckley, L.J. (pp. 375-6), of the general principles to be applied in such cases.

The Court there held, as had Chancellor Boyd, that no trust had been created. See also, Keyes v. Grant, [1928] 3 D.L.R. 558 at 559,40 B.C.R. 19, [1928] 2 W.W.R. 295 per MacDonald C.J.A., 559 per Martin J.A., 560 per Galliher J.A. and 561 per MacDonald J.A. (B.C. C.A.).; and, Re Lasby; Can. Permanent Trust Co. v. Lasby, 42 Sask. R. 73 at 75, [1985] 6 W.W.R. 665 (Q.B.).

Executor Appointed Amicus (Friend) of Court to Defend Wills Variation Claim

Defend Wills Variation Claim

Ketcham v Walton 2012 BCSC 175

[10] The basic principle of an Executor’s duty to specified and potential beneficiaries of the Will is neutrality.

[11] Mr. Justice Bouck stated in Quirico v. Pepper Estate (1999), 22 B.C.T.C. 32 at paras. 15-17:

15 The primary duty of an executor is to preserve the assets of the estate, pay the debts and distribute the balance to the beneficiaries entitled under the will or, in accordance with any order made under the Wills Variation Act. An executor should not pick sides between the beneficiaries and use estate funds to finance litigation on their behalf under the Wills Variation Act. It is a matter of indifference to the executor as to how the estate should be divided. He or she need only comply with the terms of the will or any variation of it made by a court.

16 For all these reasons, the law anticipates the executor will remain impartial between the opposing beneficiaries. Where proceedings are taken under the Act, all the executor need do is appear at the trial if required, and deliver to the court the Letters Probate and financial documents showing the value of the estate. Even this may be unnecessary if the parties agree to admit copies of those documents into evidence without the attendance of the executor.

17 It follows that the only purpose of Mr. MacKay appearing at the trial as solicitor for the executor was to deliver up the Letters Probate and the Estate Inventory. He could not act in an adversarial capacity against the plaintiff.

[12] In his submissions, the Executor attempted to circumvent the general thrust of these paragraphs by saying that he is attempting to “comply with the terms of the will” by defending the Will against the WVA claim. However, I read Bouck J.’s words as referring to the distribution provisions of the Will and not the Will as a whole. The general proposition that “it is a matter if indifference to the executor as to how the estate should be divided” makes the most sense.

No Party to Advance Position

[13] The Executor says that if it does not intervene to “defend the Will”, there is no other party with sufficient interest in the litigation to oppose the WVA claim. Indeed, according to the proposed distribution, there is a $277,000 residuary to this estate. This means that before any of the specific legacies are affected, an amount in excess of $277,000 would need to be reapportioned to the children under the WVA. Therefore, the real conflict in the WVA claim may actually be between the children‑plaintiffs and the residuary beneficiaries (in this case, the Cowichan Foundation and the Dominion Command of the Royal Canadian Legion).

[14] The Executor points out that neither of these organizations have filed responses to the civil claim in this matter and are therefore not taking an active role in defending the residuary. However, this does not seem sufficient to alter the essential character of an executor as neutral between beneficiaries and potential beneficiaries. Even if the WVA claim goes undefended, the matter will still be in the discretion of the court, weighing the evidence propounded by the plaintiffs against a statement of intention in s.8 of Eric Clay’s Will.

[15] In Doucette v. Doucette Estate, 2008 BCSC 506 at para. 16, Metzger J. wrote:

… The law requires an executor to remain neutral. Counsel for the executors did not cite any authority, with the arguable exception of the last paragraph of Erlichman discussed above, that would permit an executor to enter the fray of a WVA proceeding at the cost of the estate with the explanation that it was to defend the testatrix’s intentions.

[16] Again, the executor attempts to distinguish this case on the grounds that it did not involve a will that specifically directed the executor to take an active role in the litigation. However, in my view, this is not a relevant distinction, since the characteristic of neutrality is fundamental to the role of executor on WVA applications. Absent any authority to the contrary, these precedents that require the executor to remain neutral must stand.

[17] The executor points to examples of executors being given express authority to not maintain an even hand between beneficiaries when discretionary trusts or powers of appointment are involved. With respect, the “non neutrality” of the even‑hand principle has nothing to do with the neutrality required of the executor in WVA actions.

In Terrorem and Public Policy

[18] The plaintiffs point to the few cases decided on in terrorem clauses, which attempt to divest a party of their inheritance if they try to challenge the distribution under the WVA. These clauses have been held to be void as against public policy.

[19] The clause in question does not obviously prevent the children from an inheritance if they bring a WVA claim, but that possibility clearly lurks within it. The executor is instructed to resist their claim, even if it depletes the entirety of the estate to the detriment of the named beneficiaries. The executor is also granted the authority to incur whatever legal costs he feels are necessary and not have the legal bills taxed. It is easy to see how this clause, if given full effect, could be used to erase the $800,000 in the estate.

[20] If the clause is not repugnant for directing the executor to take an active role in the litigation, then I would find it void as amounting to an in terrorem clause. Alternatively, it should also be void as contrary to public policy as it purports to deny Eric Clay’s children their recourse to the courts. The clause does not directly divest the children of an inheritance, but it does have the potential to deny them the fruits of a victory. Since they have a statutory right to challenge the will under the WVA, any clause that attempts to deny them this right (or, by extension, any effective remedy under this right), should offend public policy and be void.

[21] This is the outcome that was reached in Bellinger v. Nuytten Estate, 2003 BCSC 563 at para. 22 and it should apply here.

[22] The executor attempts to distinguish the results in the Bellinger line of cases, since he claims he is only defending the testator’s intentions. However, this cannot be the case with a clause worded so broadly as to raise the spectre of depleting the entirety of the estate.

Amicus?

[23] If the children in the WVA action seek an amount in their claim larger than the aggregate amount of $515,000 specified for stated beneficiaries, no doubt counsel for the major stated beneficiaries will vigorously defend against the plaintiffs’ claim. The executor can and should remain neutral, as there is a party to defend the testator’s intention in his Will.

[24] However, should the specified beneficiaries effect a settlement with the plaintiffs such that the plaintiffs are only pursuing the residual interest amount of $277,000 in the Will, there is then no party to defend.

[25] In order to assist the Court in determining the merits of the plaintiffs’ WVA claim in a balanced and non adversarial role, the Executor might then retain counsel as Amicus for the Court with respect to questioning the plaintiffs’ claim for assistance of the Court.

[26] Item 2 of the direction request to pay incurred legal expenses by the Executor subject to the neutrality principles I stated previously is permissible at law and I would so endorse.

Undue Influence Summarized

 

undue influence summarizedBuccilli v Pillitteri 2012 ONSC 6624, involved a family estate dispute after a tragic death where all the parties had a one third interest in a family business.

After the deceased’s death, his surviving widow, on the advice of her brothers-in-law, signed transfers of all her interest in the deceased estate, including the interest in the family business and real property, to one of the defendants in trust, in exchange for receiving a condominium. Eventually the widow brought court action to set aside the transfer agreement, and the action was allowed on the grounds of undue influence, and other reasons including misrepresentation.

In a nutshell, the court found that there was an inequality of positions of the parties, and the widow relied upon her brother-in-law’s for advice and was misrepresentented to neter into the contract.. The transfer agreement was an improvident bargain whereby the widow gave up her interest in the deceased’s estate, which was worth a very substantial amount, in exchange for a condominium worth only $610,000.Patricia also asks that the Transfer Agreement be set aside on the basis that the widow relied upon the sons in law and they breached the fiduciary duty that they owed to her.

The doctrine of undue influence is well known. Where there is no special relationship such as trustee and beneficiary or solicitor and client, it is open to the weaker party to prove the stronger was able to take unfair advantage, either by actual pressure or by a general relationship of trust between the parties of which the stronger took advantage. See Waddams at paras.
519 to 522.

It is this latter concept that is relied on by the plaintiff. Once a confidential relationship has been established the burden shifts to the wrongdoer to prove that the complainant entered into the impugned transaction freely. See Waxman v. Waxman (2002). 25 B.L.R. (3d) 1 (Ont. S.C.J.) per Sanderson J. at paras. 1430.
140 In Waxman v. Wuxman, Sanderson J. referred to Lord Wilkinson in Barclays Bank pic v. O’Brien. [199314 All E.R.
417 (U.K. H.L.) who stated that in the case of presumed rather than actual undue influence, once a confidential relationship has been proved such that it is fair that the wrongdoer abused that relationship, there is no need to produce evidence that actual undue influence was exerted and the burden shifts to the wrongdoer to prove that the complainant entered into the transaction
freely, for example by showing that the complainant had independent legal advice. These principles were adopted in Bank of
Montreal v. Dimdd (2000). 47 O.R. (3d) 737 (Ont. C.A.). In that case, while Feldman J. A. dissented, her following statement 2012 CarswellOnt 15064,2012 ONSC 6624, 84 E.T.R. (3d) 208,225 A.C.W.S. (3d) 115
accorded with the majority’s views:
[44] In the case of actual undue influence, the claimant must prove affirmatively that the wrongdoer exerted undue in­fluence to induce the transaction. In the case of presumed undue influence, the claimant must show only that there existed a relationship of trust and confidence such that it is fair to presume that the wrongdoer abused that relationship to procure the transaction. The onus then shifts to the wrongdoer to prove that the complainant in fact entered into the transaction freely.

One way to rebut the presumption is to demonstrate that the complainant received independent legal advice.
141 In Goodman Estate v. Geffen. 119911 2 S.C.R. 353 (S.C.C.), Wilson J. stated:
42. What then must a plaintiff establish in order to trigger a presumption of undue influence? In my view, the inquiry should begin with an examination of the relationship between the parties. The first question to be addressed in all cases is whether the potential for domination inheres in the nature of the relationship itself…
43. Having established the requisite type of relationship to support the presumption, the next phase of the inquiry involves an examination of the nature of the transaction. When dealing with commercial transactions, I believe that the plaintiff should be obliged to show, in addition to the required relationship between the parties, that the contract worked unfairness either in the sense that he or she was unduly disadvantaged by it or that the defendant was unduly benefited by it. From the court’s point of view this added requirement is justified when dealing with commercial transactions because, as already mentioned, a court of equity, even while tempering the harshness of the common law, must accord some degree of def­erence to the principle of freedom of contract and the inviolability of bargains…
45. Once the plaintiff has established that the circumstances are such as to trigger the application of the presumption, i.e., that apart from the details of the particular impugned transaction the nature of the relationship between the plaintiff and defendant was such that the potential for influence existed, the onus moves to the defendant to rebut it. …the plaintiff must be shown to have entered into the transaction as a result of his own “full, free and informed thought”.

Substantively, this may entail a showing that no actual influence was deployed in the particular transaction, that the plaintiff had independent advice, and so on. Additionally, I agree with those authors who suggest that the magnitude of the disadvantage or benefit is cogent evidence going to the issue of whether influence was exercised.

Dying Intestate With No Next of Kin Will Escheat

If You Die Without a Will With No Next of Kin it Goes to the Government

Many people mistakenly believe that if a person dies intestate (without a will), then the estate goes to the government.This is not the case as the provision of the Estate Administration act before deaths occurring March 31,2014 and WESA thereafter,  will prevail with an intestacy formula of which class of relatives gets the estate.

However, if a person dies without leaving any next of kin, whether by way of a will or without a will, then most jurisdictions have a provision for the estate assets to in effect “forfeit” to the state. In British Columbia the statute is knows as the The Escheats Act.

Here is an interesting story taken from the Financial Post involving a $40 million escheatment left to his state as the deceased never got around to doing a will during his 97 years on earth

“He was a very smart man but he died like an idiot,” said Paul Skurka, a fellow Holocaust survivor

When Roman Blum died last year at age 97, his body lingered in the Staten Island University Hospital morgue for four days, until a rabbi at the hospital was able to track down his lawyer.

Mr. Blum, a Holocaust survivor and real estate developer, left behind no heirs and no surviving family members — his former wife died in 1992 and the couple was childless. His funeral, held graveside at the New Montefiore Jewish Cemetery in West Babylon, N.Y., was attended by a small number of mourners, most of them elderly fellow survivors or children of survivors.

Much about Mr. Blum’s life was shrouded in mystery: He always claimed he was from Warsaw, although many who knew him said he actually came from Chelm, in southeast Poland. Several people close to Mr. Blum said that before World War II, in Poland, he had a wife and child who perished in the Holocaust, though Mr. Blum seems never to have talked of them, and the International Tracing Service in Bad Arolsen, Germany, has no record of them in its database. Even his birth date is in question. Records here give it as Sept. 16, 1914; identity cards from a German displaced persons camp have it as Sept. 15.

Mr. Blum’s estate is being used to pay his taxes, conduct an in-depth search for a will and hire a genealogist to search for relatives. If none are identified, the money will pass into the state’s coffers

But perhaps the greatest mystery surrounding Mr. Blum is why a successful developer, who built hundreds of houses around Staten Island and left behind an estate valued at almost US$40-million, would die without a will.

That is no small matter, as his is the largest unclaimed estate in New York State history, according to the state comptroller’s office.

“He was a very smart man but he died like an idiot,” said Paul Skurka, a fellow Holocaust survivor who befriended Mr. Blum after doing carpentry work for him in the 1970s.

Gary D. Gotlin, the public administrator handling the case, sold Mr. Blum’s home on Staten Island, auctioned off his jewelry and his furniture and is putting other properties that he owned on the market. Mr. Gotlin’s office, which is overseen by Surrogate’s Court in Richmond County, is also using Mr. Blum’s estate to pay his taxes, conduct an in-depth search for a will and hire a genealogist to search for relatives. If none are identified, the money will pass into the state’s coffers. That, Mr. Blum’s friends said, would be a tragedy, compounding the one that befell him as a young man in Eastern Europe.

Related: Estate Planning: Who gets the house?

Wills and marriage: Having one without the other

“I spoke to Roman many times before he passed away, and he knew what to do, how to name beneficiaries,” said Mason D. Corn, his accountant and friend for 30 years. “Two weeks before he died, I had finally gotten him to sit down. He saw the end was coming. He was becoming mentally feeble. We agreed. I had to go away, and so he told me, ‘O.K., when you come back I will do it.’ But by then it was too late. We came this close, but we missed the boat.”

Roman Blum was, by all accounts, an emotional man with a large personality. Six feet tall and handsome, he was a ladies’ man, a gambler and a drinker. He was also enterprising and tough in business.

“He had deeds on his desk piled up to the ceiling of properties he owned,” said Vincent Daino, who was Mr. Blum’s neighbor for 25 years and became his unpaid driver when the older man’s eyesight began to fail. “There were royalties from oil rigs in Alaska, money from his stocks — about once a month he would have me drive him to the bank so he could deposit $100,000 checks.”

Much of what is known about his life comes from a circle of fellow Holocaust survivors who met in displaced persons camps after the war.

They said that when war broke out, Mr. Blum was in Poland and, fearing capture, ran alone across the border to Russia, where he was briefly detained and placed in prison. The Russians soon released him along with thousands of other prisoners to fight the Nazis. The fate of his wife and child, if they existed, is unclear.

In the months after the war, Mr. Blum met a family of survivors with two daughters. One of them, Eva, had been in the Auschwitz concentration camp.

He married her, although by all accounts it was not a love match. “It was immediately after the war — he thought she was the last Jewish woman alive, and she thought there were no more men,” said a friend and fellow Holocaust survivor who met Mr. Blum around that time. The friend would speak only anonymously, for fear that he would seem to be trying to make a claim on the Blum estate.

In 1946, Mr. and Mrs. Blum made their way to Zeilsheim, a displaced persons camp on the outskirts of Frankfurt. In the chaos of postwar Germany, Mr. Blum became a smuggler, as many Jews did, Mr. Skurka said: He pirated cigarettes into Belgium while biding his time waiting for a visa to the United States. During that period, Eva remained in Zeilsheim and Mr. Blum preferred the livelier Berlin.

“They had survived Hitler so they thought they would live forever.”

Mr. Skurka related a story from those days that, he said, Mr. Blum had told him. One day while in Berlin, Mr. Blum walked into a barbershop and asked the proprietor for a shave. When the barber finished, Mr. Blum said he had no money, shrugging his shoulders and smiling as he walked out the door. “He had chutzpah, that’s the kind of man he was,” Mr. Skurka said.

In 1949, the Blums came to New York and settled in Forest Hills, in Queens. There, they joined a tightknit community of survivors, many of whom they knew from the Zeilsheim camp.

“They all lived the same type of lifestyle, going to the bungalow colonies together, the Catskills, everything was done as a group,” said Jack Shnay, a child of survivors who grew up in Forest Hills with the Blums. “Initially, they all lived in apartments in Rego Park; then they starting buying or building private homes.”

“Every weekend was a party,” said Charles Goldgrub, the child of survivors and Mr. Blum’s godson, who also grew up in Queens. “They had survived Hitler so they thought they would live forever.”

On weekends, the survivors would often gather to play high-stakes poker and drink plum brandy. They rarely discussed their wartime experiences, but sometimes, as a group and tipsy, they would grow emotional. Mr. Blum’s favorite tune was the 1968 single by Mary Hopkin, “Those Were The Days,” recalled Michael Pomeranc, a hotelier who grew up in Forest Hills and whose parents, also survivors, were close to the Blums. “He was always singing that song, and especially if he’d had a bit to drink, he’d try to get everyone to join in with the lyrics,” Mr. Pomeranc said.

Many of the men started businesses together, the majority becoming homebuilders and hotel developers. They referred to themselves as griners, a Yiddish term meaning greenhorn or newcomer. “They were known as the griner builders,” said Robert Fishler, a Staten Island real estate lawyer who represented Mr. Blum for nearly three decades.

The men also had affairs. “There were lots of women on the side,” Mr. Goldgrub said. “It was a way of life, everyone knew — the wives just closed their eyes to it.” By many accounts, Mr. Blum often had female companions other than his wife. “It was really more like growing up in the Italian mob than your typical Jewish upbringing,” Mr. Goldgrub said.

While the people in the group liked having fun, they were not showy, despite their growing wealth. Most drove the same Buicks and Oldsmobiles for years and remained in the same middle-class neighborhood. Their modesty might also have been a desire to keep their wealth under wraps. “They didn’t want anyone to know what they had. They had been so scrutinized they didn’t want to call attention to themselves,” Mr. Goldgrub said.

“Everybody knew Roman. He built hundreds of homes over the years,” Bruno Betro, a broker at Volpe Realty, said. “Last time I tried to sell a piece of property for him, I’d give him an offer and he’d tell me he wanted $1 million more.”

The Blums struggled to start a family. Mrs. Blum told her friends that she was unable to have children, and the couple spent thousands of dollars on doctors’ visits. According to stories that swirled around the couple, Mrs. Blum had been a subject of the dreaded Dr. Josef Mengele while at Auschwitz, and his experiments had rendered her infertile.

In the 1960s, on a five-week trip to Israel on the Queen Elizabeth, Mr. Blum found a boy, an orphan, whom he wished to adopt. But friends who were with them said Mrs. Blum begged him not to go through with the adoption, convinced that her doctors would ultimately be able to help them conceive. They did not adopt the boy and never had children.

Then, in 1964, the Verrazano-Narrows Bridge opened, linking Brooklyn and Staten Island, and many in the group, including Mr. Blum, began buying land on Staten Island. Prices were low, and Mr. Blum began developing land and building homes in neighborhoods like Eltingville, Huguenot and Manor Heights.

“Everybody knew Roman. He built hundreds of homes over the years,” Bruno Betro, a broker at Volpe Realty, said. “Last time I tried to sell a piece of property for him, I’d give him an offer and he’d tell me he wanted $1 million more.”

By the 1980s, with his business thriving, Mr. Blum decided to relocate to Staten Island. He built a large brick house in the upscale neighborhood of Southeast Annadale, with four bedrooms and five bathrooms, a two-car garage and a pool.

Mrs. Blum did not want to move. “He wanted her to go live with him in his big house with a swimming pool, but she loved the city,” said the friend who wished to be unidentified. “All her friends were there, and with his lifestyle, if she went with him, she knew she would be alone a lot.” Mrs. Blum stayed in Queens and Mr. Blum moved into the new house.

“Fifty years of marriage and he just left,” said Sherri Goldgrub, who married Charles Goldgrub in 1980 and knew the Blums well. “He would sometimes come back and bring her his laundry, but she sat home waiting, thinking he’d be back for dinner.”

As the years went by, Mr. Blum became increasingly stingy and, according to those who knew him, paranoid that people were after his fortune

The Blums eventually divorced, and Mr. Blum lived the life of a bachelor. There were women and lots of poolside parties. “Every Sunday we would swim in the pool, drink and eat — he’d like to make steaks this thick on the grill,” said his friend, holding his fingers five inches apart.

As for the group back in Queens, the divorce caused a rift and many distanced themselves from Mr. Blum.

“People were offended,” Mr. Goldgrub said. “People took sides, and our family took Eva’s side.” The last time Mr. Goldgrub saw Mr. Blum was at the bar mitzvah of his son in 1995. Mr. Blum was furious that he was not asked to light a candle for the boy, an honor, and told Mr. Goldgrub’s father he was taking his godson out of his will.

But Mr. Blum’s business on Staten Island was growing. Known as shrewd and hard driving, he could often be found early in the morning, cup of coffee in hand, sitting in the garage of one of his model homes, displaying sample materials and giving prospective buyers the hard sell.

As the years went by, Mr. Blum became increasingly stingy and, according to those who knew him, paranoid that people were after his fortune. He hid $40,000 in the ceiling of his bathroom, according to Mr. Daino, and when it went missing, Mr. Blum accused another neighbor of stealing it. “He told him, ‘Give me back $30,000 and I’ll let you keep $10,000,’ ” said Mr. Daino.

None of Mr. Blum’s friends know why he never wrote a will. Those close to him say it may have been superstition or, after coming so close to dying during the war, a refusal to contemplate his own mortality

Months before he died, Mr. Blum fell down the stairs of his home and broke his leg, lying on the floor for four hours before a cleaning woman found him, according to Mr. Daino. It was Mr. Daino who took him to the hospital and who eventually signed him out.

“He had no one else, I was the only person he had,” Mr. Daino said. The leg never fully healed, and Mr. Blum, who remained at home in a hospital bed with 24-hour care, died in early January 2012.

After the hospital rabbi found his body in the morgue, he notified Mr. Fishler, the lawyer, who then notified Mr. Blum’s old friends from Queens. To the surprise of many, Mr. Blum had bought a cemetery plot next to his former wife’s. He was buried there.

Had the Blums had children, the estate would have gone to them, even without a will

“It is a heartbreaking story, a tragedy,” said Mr. Pomeranc, who was one of the few people who attended Mr. Blum’s funeral. “I spoke with him three days before he died. We were going to get the whole group together and take a ride out to see him that weekend. But it didn’t happen, and then the next week he passed away.”

None of Mr. Blum’s friends know why he never wrote a will. Those close to him say it may have been superstition or, after coming so close to dying during the war, a refusal to contemplate his own mortality. He may also have been unwilling to share the full details of his estate with a lawyer, the desire for secrecy a holdover from his experiences during the war.

Had the Blums had children, the estate would have gone to them, even without a will. While Mrs. Blum, as his former wife, would not have been eligible — only a current spouse or a blood relative can claim an inheritance in the absence of a will — his friends hope that Mr. Blum had siblings back in Poland with whom he was not in contact or that, if he had had a child before the war, some distant relations are still living in Europe.

Yet despite a worldwide search that included Poland and Israel, Mr. Gotlin said, “to date, there is no evidence of any living relatives.

“It wouldn’t be that uncommon to uncover collateral heirs,” said Burt Neuborne, the civil liberties defender who was the lead counsel in recent Holocaust litigation against Swiss banks. “We often found that someone, like a third cousin twice removed, would come forward.”

Yet despite a worldwide search that included Poland and Israel, Mr. Gotlin said, “to date, there is no evidence of any living relatives.”

“I believe a will is written,” the friend said. “Somewhere there is a plan: he made arrangements to use the money to build a home for children and to dedicate it to his child from before the war. I am sure of it.”

Mr. Gotlin continues to work on liquidating Mr. Blum’s estate. According to people familiar with his accounts, Mr. Blum had about $4 million in cash in his checking account. His house was put on the market for $729,000 and is now in contract, and an eight-acre parcel he owned on Forest Avenue, worth about $4.5 million, is also in contract. A safe deposit box had more than 70 $100 bills, coins from Canada and South Africa, and gold jewelry including a watch, a bracelet, cuff links, several necklaces and a ring.

Mr. Blum’s few remaining personal items, including photographs and a book on the Holocaust, have been put in a box in the basement of the public administrator, where they will remain sealed unless claimed by a blood relative.

Once Mr. Gotlin completes liquidating the assets, and if investigators fail to find a will or surviving kin, whatever money is remaining from Mr. Blum’s estate will be passed to the city’s Department of Finance. If, after three years, no one comes forward, the money would go to the state comptroller’s office of unclaimed funds, which has $12 billion in its accounts dating to 1943. That office keeps a portion of the estate and transfers a portion to the state’s general fund. If an heir comes forward, the entire amount is returned.

The last time his old friend from Zeilsheim saw him, the man pushed Mr. Blum to discuss the topic of a will. “I told him, ‘Look, I know you don’t want to talk about it, but’ — and he was already a little bit drunk — I said, ‘You have to do something,’ ” the friend said. “And he told me, he said, ‘I promise you, if anything happens to me, you are going to be proud. You’ll be proud of me.’ ”

The friend still clings to hope. “I believe a will is written,” the friend said. “Somewhere there is a plan: he made arrangements to use the money to build a home for children and to dedicate it to his child from before the war. I am sure of it.”

Special Costs Awarded Against Plaintiffs Who Alleged But Failed to Prove Undue Influence

Stewart v McLean 2010 BCSC is one of several decisions where plaintiffs have alleged, and then failed to prove an allegation of undue influence.

The rationale is that undue influence is a form of civil fraud, which is a serious allegation to advance.

Special costs essentially mean that the losing party pays the entire legal fees of the winning party, rather than the usual “contribution” in that the scale of “usual” cost awards, are less than the actual legal fees charged, which are usually greater than the costs awarded.

The facts in the Stewart case are a frequent estate litigation scenario.

Children of a deceased parent brought action against the second spouse, alleging the spouse exercised undue influence over the deceased in order to pressure the deceased to transfer the matrimonial home into joint tenancy, and to set the transfer aside.

The Court found no such evidence and in fact found the opposite- that the deceased was competent, sharp, and independent until death. She exercised her own mind over financial matters.

The court found the plaintiffs allegations reprehensible and thus the award of special costs?

COSTS

[112] The defendants seek special costs. An award of special costs should be made when a party’s conduct is reprehensible. In Garcia v. Crestbrook Forest Industries Ltd. 1994 CanLII 2570 (BC CA), (1994), 119 D.L.R. (4th) 740 at 747, 9 B.C.L.R. (3d) 242 (C.A.), Lambrt J.A. explained “reprehensible”:

… the word “reprehensible” is a word of wide meaning. It encompasses scandalous or outrageous conduct but it also encompasses milder forms of misconduct deserving of reproof or rebuke. Accordingly, the standard represented by the word “reprehensible”, taken in that sense, must represent a general and all encompassing expression of the applicable standard for the award of special costs.

[113] He then clarified at 748:

… the fact that an action or an appeal “has little merit” is not in itself a reason for awarding special costs … Something more is required, such as improper allegations of fraud, or an improper motive for bringing the proceedings, or improper conduct of the proceedings themselves, before the conduct becomes sufficiently reprehensible to require an award of special costs.

[114] I find the plaintiff’s allegations reprehensible. They were completely unfounded and attacked her brother’s character. In her statement of claim, the plaintiff alleged that the transfer of the house was made “while the Deceased was in failing health and subject to undue influence exerted on her by the said Defendant”; that the gifts of funds were at “the instigation of the Defendant Donald Emil McLean who deliberately misinformed the Deceased”; and that the defendants “have been unjustly enriched through the Defendant Donald Emil McLean’s manipulations of the Deceased” (emphasis added). The statement of claim also referred to “the abuse of fiduciary duty by the said Defendant” (emphasis added). These are serious allegations, which, as Goldie J.A. noted, “sto[p] just short of fraud”: Hamilton v. Sutherland, 1992 CanLII 1127 (BC CA), [1992] 5 W.W.R. 151 at 163, 68 B.C.L.R. (2d) 115 (C.A.).

[115] In McLean v. Gonzalez-Calvo, 2007 BCSC 648 (CanLII), 2007 BCSC 648, 36 E.T.R. (3d) 126, MacKenzie J. reviewed the law of special costs in British Columbia estate cases in which the unsuccessful party alleged undue influence or proceeded with a claim that was bound to fail because of the absence of any basis for it. Justice MacKenzie noted that in a number of cases, special costs have been awarded when undue influence was unsuccessfully alleged. These include Benekritis v. Benekritis Estate, [1998] B.C.J. No. 171 (S.C.); Bates v. Finley, 2002 BCSC 159 (CanLII), 2002 BCSC 159, 43 E.T.R. (2d) 1; and Kouwenhoven Estate v. Kouwenhoven, 2001 BCSC 1402 (CanLII), 2001 BCSC 1402, 14 C.P.C. (5th) 154.

[116] In determining whether special costs should be awarded on this basis, MacKenzie J. considered whether the plaintiff had substantial time to consider his or her allegations and whether the allegations were based on speculation and innuendo. She also took into account the fact that the defendants had warned the plaintiff and his counsel that they intended to seek special costs and had given them cases in which special costs had been awarded because the allegations of undue influence were made without supporting evidence. Thus, the plaintiff could not say that he was unaware of the seriousness of his allegations or the law on the topic.

[117] In the present case, the plaintiff was well aware of the gravity of her allegations against her brother. In the previous litigation between the parties (Stewart v. McLean, 2003 ABQB 205 (CanLII), 2003 ABQB 205, 49 E.T.R. (2d) 294), Belzil J. found:

[12] An allegation of undue influence on any testator is extremely serious, and as was pointed out in Vout v. Hay, this is a species of fraud. It was clear from her testimony before me that this allegation had a devastating emotional impact on Mona Stewart in particular, and was the cause of enormous embarrassment and humiliation for her, not only within her extended family but within her community of Powell River, B.C., as well.

…

[14] Courts have long held that serious costs consequences must flow from an unproven allegation of undue influence. … These costs consequences are intended to discourage litigation of unsubstantiated allegations which have virtually no chance of success but which cause enormous distress.

…

[21] In my view, the allegation of undue influence should have been abandoned months before this trial started, and certainly should not have been advanced at trial as there was no realistic possibility that Donald McLean could prove, on a balance of probabilities, that there was any undue influence surrounding the execution of the Will of May 13th, 1997.

[118] Justice Belzil assigned ten percent of the solicitor-client costs awarded to the plaintiffs from the estate to the undue influence issue and directed that the Defendant reimburse the estate this amount.

[119] The plaintiff knew that these were serious allegations which would likely cause emotional distress to Donald McLean and which could result in a significant costs order. She persisted with her claim despite having received the medical evidence that her late mother was competent and despite knowing that her mother wished to equalize financial matters between her son’s and daughter’s families. The plaintiff knew she had no evidence except for speculation and innuendo. Notwithstanding this, she pursued her claim.

[120] The plaintiff’s pursuit of this lawsuit in light of the facts and her complete lack of evidence appears to have been motivated by greed and retaliation directed towards her brother for opposing probate of their late uncle’s will. It is one thing to pursue litigation based on suspicious conduct grounded in facts, which may or may not be accepted by the trier of fact; it is another to pursue it and provide no substantive evidence in support. Her allegations were unfounded and her motive improper.

[121] For these reasons, I find the defendants are entitled to special costs

Beneficiaries Can Disclaim an Inheritance

Beneficiaries Can Disclaim an Inheritance

You can refuse  or disclaim an inheritance

What do you do when a formerly beloved relative dies, bequeathing to you a piece of swampland polluted by atomic waste? Must you accept this “gift”? The legal answer is clearly “no” so long as you disclaim an inheritance in a timely fashion before receiving any benefit or otherwise dealing with the property.

There may be many reasons an intended beneficiary decides to disclaim an inheritance. Our law permits an intended beneficiary to simply refuse the gift. The purported gift is then deemed to be void ab initio (from the beginning). It becomes as if the gift had never been given.

There are rare exceptions to this right of disclaimer, largely limited to situations such as where a trustee has agreed to accept a conveyance of property.

In this article we will review some situations where beneficiaries have disclaimed an inheritance and the resulting legal consequences.

Legal requirements to disclaim an inheritance

The legal requirements to disclaim an inheritance are minimal. A disclaimer may be effected by contract, by deed, by writing or even informally through conduct.

The intended recipient of the gift need only renounce the interest, in effect, by saying “I will not be the owner of it”. The key is doing so before dealing with the property in any way.

The decision of Re Moss, (1977) 77 D.L.R. (3d) 314, is a good illustration of disclaimer by an informal act.

This case involved an elderly man chewing tobacco on the lawn of his local Kingdom Hall. As a result of this impropriety, the Jehovah’s Witnesses excommunicated him and a short time later he died – without having changed his will leaving everything to his church.

The church elders considered this gift and soon voted to disclaim the inheritance on the basis that it would be improper for them to accept such a gift from an excommunicated member.

When challenged in court, the court upheld the disclaimer, concluding the actions of the church elders were sufficient to disclaim an inheritance of the kind. Nothing more was required.

In doing so, the court cited Townson vs. Ticknell (1819) 3 B & Ald. 31, as the authority for the proposition that an estate cannot be forced upon a person. Further it is not necessary to go to trouble or expense to demonstrate that a gift is not accepted.

Note however the crucial question of timing. You may disclaim an inheritance only before the beneficiary has derived any benefit from the assets. Once a benefit has been taken, then the disclaimer can no longer be made. A. R. Mellows, The Law of Succession, p. 508.

When you disclaim an inheritance, it’s all or nothing

Where there is a single undivided gift, the law requires the donee to either take the gift entirely or disclaim it entirely: the donee cannot take only part of the gift and disclaim the rest.

This principle is illustrated in the following cases:

1. Guthrie v. Walrond (1883), L.R. 22 Ch.D 573. “Here the intended gift was all my estate and effects in the island of Mauritius”. The court held that the donee must take all or nothing and could not pick and choose.

2. Green V. Britten ( 1873) 42 L.J. Ch. 187. This involved a gift of 6 leasehold villas together with an ornamental park. The court held that this was one entire gift and the recipient could not take the villas alone and leave the park.

Retroactive to the Date of Death

Once made, a disclaimer will be retroactive to the date of death of the deceased. A beneficiary who disclaims a gift is refusing to acquire the property of another. Thus the effect of the disclaimer is that the property is never acquired. Re Metcalfe (1972) 3 O.R. 598.

What Becomes of the Disclaimed Gift?

When you disclaim an inheritance, unless there is a gift over, the disclaimed gifts will fall into the residue of the estate. Where a gift of the residue is disclaimed, in the absence of a gift over then an intestacy results. If no contrary intention appears in the will, the disclaimed residue will pass on an intestacy. Re Stuart (1964) 47 W.W.R. 500(check Cite)

In Re Backhouse (1931) W.N. 168 (Ch.), a specific legacy, once disclaimed, became part of the residue of the estate.

Where an intestacy occurs, the next of kin are to be determined, prima facie, as of the date of the testator’s death unless there is sufficient indication in the will to some other effect: McEachern v. Mittlestadt (1963) 46 W.W.R. 359.

To disclaim an inheritance is not a fraudulent conveyance

In Mulek v. Sembaliuk ( 1985) 2 W.W.R. 385, a couple married and had four children. Ten years later the husband’s father died leaving him an inheritance. Following the death, the parties commenced divorce proceedings. The husband ran up significant arrears of maintenance and alimony.

The husband disclaimed his interest in his father’s estate which prevented his wife and children from attaching these funds to satisfy the maintenance claim.

At trial the wife was granted an order setting aside the husband’s disclaimer on the basis that it was a fraudulent conveyance.

The Court of Appeal granted the husband’s appeal, holding that a disclaimer does not convey property, rather it avoids the gift being conveyed in the first place. The husband had no obligation to accept the bequest, in spite of his obligation to support his dependants. The husband did not convey property by disclaiming his interest thus this disclaimer could not be categorized as a fraudulent conveyance.

In the Bank of Nova Scotia v. Chan, 68 C. B. R. ( N.S.) 118, five will beneficiaries were named as co defendants in an action brought by a judgment creditor of one beneficiary who disclaimed his interest. The creditor alleged that the debtor defendant, by disclaiming his interest, had conveyed this interest with the intent to defeat or defraud creditors.

Once more the court held that a disclaimer of a beneficiary’s entitlement under a will is not a conveyance and therefore not covered by the Fraudulent Conveyances Act.

The court went on to say that should it be found that the defendant had received some form of kickback for giving up his interest, then that would be an assignment of interest rather than a proper disclaimer. Such an assignment might very well be a fraudulent conveyance.

Acceleration to disclaim an inheritance

A disclaimer may result in the acceleration of subsequent interests, thus permitting future heirs to take immediately.

Blacks Law dictionary, revised 4th edition, 1968 defines acceleration as “the shortening of the time from vesting in possession of an expectant interest – hastening of the enjoyment of an estate which was otherwise postponed to a later period”

The recent decision Clarke v. Di Bella 2010 BCSC 505 is a good example of such an acceleration which effectively wound up a lengthy trust.

Mrs. Bushby died in July 2007, leaving a will and an estate valued at $600,000. Her will created a trust with a life interest for her only niece with the residue divided equally among those of the daughter’s nieces/nephews alive at the time of her death. The will also provided that if any of those nieces/nephews predeceased the this niece, and they themselves had children, then their children would receive their parent’s share.

The niece was middle aged and had 3 nieces/nephews who, at the time of the hearing, were 28, 26 and 23 years of age. None had any children of their own.

The niece and her 3 nieces/nephews brought an action jointly, in which the daughter sought to renounce her interest in the trust and to have the property vest immediately and absolutely in her nieces/nephews equally.

The application was opposed by the Public Guardian who took the position that the acceleration would improperly extinguish the contingent interests of unborn beneficiaries of the will.

The court set out four clear principles relating to acceleration:

a) acceleration is presumed unless there is an indication to the contrary;

b) in assessing whether there is any intention to the contrary, the court must look at both the instrument and the surrounding circumstances;

c) the instrument must be examined in its entirety, and clauses must not be examined in isolation; and

d) the intentions must be viewed, as nearly as is possible, from the perspective of the testator, applying an objective standard.

The court held that while it is clear that the testatrix intended to provide for her daughter, there is nothing to suggest that the daughter could not disclaim that benefit and provide immediately for the ultimate beneficiaries upon her death.

The court held that the aunt was free to disclaim her entitlement thus accelerating her nieces/nephews’ interests in the estate. Each niece/nephew thus inherited one third of the estate upon attaining the age of 25 years (the age stipulated by the testatrix).

Conclusion

Beneficiaries cannot be forced to accept gifts. Beneficiaries have the right to refuse to accept gifts and may choose to do so for a wide variety of reasons.

The Clarke V. DiBella decision is an excellent example of the court permitting the a beneficiary to disclaim her interest, in order to accelerate the passing of an absolute interest to her own children.

General Rule In Wills Variation Actions Is Loser Pays the Winners Court Costs

Wills Variation Actions

Todd v Walker 2009 BCSC 537 is authority for the above proposition re costs.

The parties were half siblings.

The deceased left $1 to her daughter plaintiff, and the residue to her son, who was also the executor.

At trial the daughter was awarded %40 of the assets and was awarded double costs for trial and trial preparation as she had filed an offer to settle, and then did better at trial than the offer was for.

The court found that the decision to defend the action was his and his alone, so therefor he was personally responsible for payment of his sisters costs, rather than having his and her costs paid from the estate .

A helpful statement of the principles governing the issue of costs in estate litigation was set out by Martinson J. in Steernberg v. Steernberg, 2007 BCSC 953, in which she noted:

[21] In Vielbig v. Watertand Estate (1995), 121 D.LR. (4th) 485,1 B.C.L.R. (3d) 76 (C.A.), the British Columbia Court of Appeal approved the following summary of the law made by Master Horn in Lee v. Lee Estate (1993), 84 B.C.L.R. (2d) 341 (S.C.), with respect to costs in estate actions and actions under the Wills Variation Act:

An order for costs in favour of a completely unsuccessful party against a completely successful party is a most exceptional order. The general rule is that costs follow the event and, while a court may depart from this rule, any departure is usually in the way of depriving a successful party of costs and not of awarding costs to an unsuccessful party. In either case, the usual rule should not be departed from simply because an unsuccessful party did not expect to lose ….

In probate or administration actions or in proceedings for the construction of wills, the rule may be more frequently departed from. In such cases where the validity of a will or the capacity of the testator to make a will or the meaning of a will is in issue, it is sometimes the case that the costs of all parties are ordered to be paid out of the estate. This is upon the principle that where such an issue must be litigated to remove all doubts, then all interested parties must be joined and are entitled to be heard and should not be out of pocket if in the result the litigation does not conclude in their favour. The estate must bear the cost of settling disputes as a cost of administration …. The question to be asked in such case [sic] is whether the parties were forced into litigation by the conduct of the testator or the conduct of the main beneficiaries.

But the case is different where the litigation does not relate to the validity of the will or the capacity of the testator or the construction of the will. Actions brought under dependants’ relief legislation presume the validity of the will and the capacity of the testator and that his intentions are clear. There are not doubts to be settled. The remedies provided by such legislation are directed to the maintenance and support of the dependants of the testator and are based on public policy. The legislation does not invalidate the will, it merely permits the court to vary the provisions made by the testator. So an unsuccessful action under such legislation cannot be said to have been caused by a testator, or to have been necessary to enable the estate to be distributed. The action does not benefit the estate.

[5] Thus, in actions brought under the Wills Variations Act, the general rule is that the unsuccessful party is to personally pay the successful party’s costs.