Incorporation of Documents Into a Will

incorporation of documents into a will Because the facts in  Yaremkewich Estate 2015 BCSC 1124 resulted in the Justice allowing a 12 page detailed document relating to specific bequests to form part of a will likely signed prior to the date of said document, the court dealt with the law relating to the incorporation of documents into a will under WESA and testamentary intent.

The Incorporation of Documents into a Will

[42]         Ms. Yaremkewich’s Will refers to the bequest lists and the care instructions for the dog.  Where a will refers to a separate document, that document must meet certain requirements to be incorporated into the will.

[43]         The requirements for incorporating a document into a will are set out in Mihalopulos (Re) (1956), 5 D.L.R. (2d) 628 at 630 (Alta. S.C.): (i) it must be clear that the will referred to some document in existence at the time the will was executed; and (ii) the document in question must be beyond doubt the document referred to in the will.

[44]         It is impossible to discern from the evidence whether or not the requirements for incorporation were met, but even if they were met, there is no valid will into which the documents could be incorporated.

[45]         Section 58(3)(a) provides that where the court is satisfied that a document represents the testamentary intentions of the deceased, the court may order that the document “be fully effective as though it had been made as the will or part of the will of the deceased person” [emphasis added].  This wording indicates that where a person has not complied with formal requirements to incorporate a document into a will, s. 58 can still be used to cure the defect if the document represents the testamentary intentions of the deceased. 

[46]         Therefore, for purposes of this s. 58 analysis, the proper inquiry is not whether the documents are validly incorporated but whether each of the documents represents the testamentary intentions of the deceased.

[47]         This was the approach taken by the Saskatchewan Court of Appeal in Bunn Estate.  In that case, the testatrix created three testamentary documents.  One was a printed will-template form that was signed and dated.  This document named an executor and revoked all prior wills but did not contain directions disposing of her estate.  The second document was an unsigned, handwritten sheet of paper that had the same date as the will form but was not signed.  This document contained instructions for her funeral and made several bequests.  The third document was another will form that was identical to the first document except it was unsigned.  All of these documents were placed in a sealed envelope that was labelled as the testatrix’s will.

[48]         Without reference to the doctrine of incorporation, the Saskatchewan Court of Appeal applied the curative provision in s. 35.1 of that province’s Wills Act, R.S.S. 1978, c. W-14 (since repealed), and held that the first and second documents should be admitted to probate even though they did not comply with the execution formalities imposed by the statute.  The trial judge found that these documents set out the deceased’s testamentary intentions, even though these intentions were recorded in two documents instead of one (at 234).  The Court of Appeal agreed and found that “[i]f the two documents are read together, a complete will is the result” (at 239).  Accordingly, the Court of Appeal upheld the trial court’s decision that the two documents should be admitted into probate as a valid will.

ANALYSIS

[49]         The types of evidence that are relevant to prove testamentary intent will vary from case to case.  In this case, the contents, the detailed wording of the Will and its attachments, and the circumstances in which they were found militate in favour of finding that the will and two of the accompanying documents, the bequest lists, represent Ms. Yaremkewich’s testamentary intentions meaning that they represent her fixed and final expression of intention as to the disposal of her property on death.

[50]         Other evidence is also of assistance.  For example, her statements to the witnesses Mr. and Mrs. Bespalko indicate that she was contemplating specific bequests at the time that she arranged for witnesses to the Will.  Ms. Yaremkewich was ill at this time, and I infer from her actions that she wanted to put her affairs in order.  She used a will template rather than an ordinary piece of paper.  The four documents were treated as important by being placed in an envelope and marked as her will.

[51]         It is relevant that Ms. Yaremkewich attempted to comply with the formalities of making a will, including signing and dating the Will at the end and initialling many of the pages.  Attempts were made to comply with the formalities of execution by having two witnesses sign.  Executors were appointed.  Finally, many of the provisions are detailed and indicate a great deal of thought, such as the appointment of a lawyer as an alternate executor, the making of alternative gifts if certain beneficiaries predeceased her, and bequests to minors not being made until they reach the age of 21.

[52]         Further, it is worth noting that there are no changes or markings in Ms. Yaremkewich’s Will or the accompanying documents that indicate that they were only draft documents or were not meant to be fully effective.  I am also satisfied that the documents are authentic, and that they were written by Ms. Yaremkewich.

[53]         Finally, there is no evidence to the contrary or suspicious circumstances that indicate the Will does not represent Ms. Yaremkewich’s testamentary intent.

[54]         In the circumstances, I find that the Will represents Ms. Yaremkewich’s testamentary intentions.

[55]         Concerning the other documents in the envelope, the circumstances surrounding the creation of the Will are a key factor in determining Ms. Yaremkewich’s intentions.  Although it is not possible to determine exactly when all of the documents were completed, it is likely that they were created at approximately the same time and I so find.  The will form that Ms. Yaremkewich filled in was only three pages long, and she filled in nearly all the blank space provided for gifts under heading number four of the template.  To be able to include detailed gifts and instructions, it was necessary for her to include additional pages.  Accordingly, in provisions three and six of the Will Ms. Yaremkewich referred to attachments and then placed the documents together in an envelope which was marked “Will of Denise Lynn Bevan Yaremkewich”.  Given the amount of detail and consistency in the additional 18 pages, I am satisfied that the additional three documents were created at approximately the same time as the main body of the Will, and that she intended for these to operate alongside the Will.

[56]         Based on the foregoing, including the factors I have referred to that support the finding that the Will represents Ms. Yaremkewich’s testamentary intention, as required by s. 58(2)(a) of WESA and as explained in George, I find that I find that the two bequest lists enclosed in the envelope also represent the testamentary intentions of the deceased and are therefore part of the Will.  Each of the documents in substance contemplates gifts on her death and in that sense is testamentary in nature.

[57]         The personal bequest list is 12 pages long and entirely in Ms. Yaremkewich’s handwriting.  It sets out a large amount of her personal property using detailed descriptions, and grants highly personalized gifts to 19 beneficiaries, including friends, family, and extended relationships.  Many of the gifts are small personal items.  It is obvious that Ms. Yaremkewich spent a great deal of time considering which gifts to give to each beneficiary.  I have no doubt that this represents her carefully-considered testamentary intentions.

[58]         For similar reasons, I find that the charitable bequest list also represents Ms. Yaremkewich’s testamentary intent.  This document distributes the remainder of the estate to 12 named charities with various charitable goals, but the charities seem to predominantly deal with animal welfare and medical services.  Since Ms. Yaremkewich’s testamentary documents are detailed and there is no other provision outlining the remainder of the estate, and in the absence of any evidence to the contrary, I find that this represents her intention to dispose of the remainder of her estate after the other gifts are made.

[59]         The only exception is the document by which Ms. Yaremkewich left instructions for the care of her beloved dog Jake.  It does not contain funeral instructions for her or a disposition of her property on death.  The bequest for Jake’s care is made in the Will which I have found to be valid.  Although the care instructions indicate Ms. Yaremkewich’s wishes for Jake’s care after her death, which is an admirable concern, they are not testamentary intentions.  As such, that document does not have testamentary status and is not within the curative power of s. 58.

[60]         After considering all of the evidence, I am satisfied that the Will and the two accompanying bequest lists collectively represent Ms. Yaremkewich’s testamentary intentions.  They represent her fixed and final expression of intention as to the disposal of her property on death.

[61]         I am therefore satisfied that the Will and the two bequest lists which were placed in the envelope should be treated collectively as a fully effective will pursuant to s. 58.

Vested – Did You Inherit?

vestedBlack’s Law dictionary defines vested or vesting “as having the character or given the rights of absolute ownership; not contingent; not subject to be defeated by a condition precedent.”

To be vested, a right must be more than a mere expectation based on an anticipation of the continuance of an existing law, it must have become a title, legal or equitable, to the present or future enforcement of a demand, or a legal exemption from the demand of another.”

Fargey v. Fargey Estate, 2015 BCSC 721 contains extensive discussion of the law of whether a gift has vested in the beneficiary of the testamentary bequest, as opposed to whether the bequest was contingent or conditional.
I normally do not print the entire judgment, but in this particular case Mr. Justice McEwen does an extremely thorough review of the law in this area, pertaining to the interpretation of the wording of the deceased will, leading to the question of whether the gift to the plaintiff had vested, which the court found it had, or had been terminated.
McEwan J.:
1      Matthew Fargey seeks an order terminating a trust in his favour created by the last will and testament of Donald Robert Fargey, his grandfather. Depending on the court’s ruling in his petition, his brother, Joseph, by his guardian ad litem, seeks related relief in a separate petition.
2      The will is dated June 28, 1995. A codicil appointed a son, Bruce Patrick Fargey, and a daughter, Jillian Fargey, the respondent, to be executors of the will. The will left the residue of the estate to Donald Fargey’s wife, Elspeth. She predeceased him on October 10, 1977. Bruce Patrick Fargey also predeceased him on October 22, 2006.
3      The will provided that in the event that one of Mr. Fargey’s children predeceased him, the share of that child was to be divided among his or her children and the trustee was to:
invest and keep invested each such sub-share and to pay the income therefrom or so much thereof as may be necessary or advisable in my Trustee’s discretion for the grandchild’s maintenance, education or benefit during his or her minority, (any income not so paid in any year to be added to the capital of the share) and upon my grandchild attaining the age of twenty-five (25) years to distribute the capital of the sub-share to him or her
4      The petitioner and Joseph Fargey are Bruce Fargey’s sons.
5      The petitioner takes the position that his interest under the will has “vested” in him as a result of his father predeceasing Donald Fargey. He submits that the proper characterization of this bequest is that his entitlement is not contingent upon his attaining the age of 25, but that only his receipt is postponed.
6      Jillian Fargey, the remaining executor of Donald Fargey’s will, takes no position on the application except to point out that there is some doubt as to whether his interest is vested. The executrix submits that it is possible that if the petitioner died after attaining age of majority but before the age of 25, the gift would lapse and be dealt with as on an intestacy under s. 84 of the Estate Administration Act.
7      The authority cited by the petitioner is Saunders v. Vautier (1841), 41 E.R. 482 (Saunders). It was considered in British Columbia in Grieg v. National Trust Co. Ltd. (1997), 47 B.C.L.R. (3d) 42 (B.C.S.C.), where Grist J. observed:
 Donovan Waters in The Law of Trusts In Canada, 2d Ed. (Toronto: Carswell, 1984) at 962-963, comments on the rule in Saunders v. Vautier (1841), 41 E.R. 482,
If there is only one beneficiary, or if there are several (whether entitled concurrently or successively), and they are all of one mind, and he or they are not under any disability, the specific performance of the trust may be arrested, and the trust modified or extinguished by him or them without reference to the wishes of the settlor or the trustees. (Approved in Re Johnston (1964), 48 D.L.R. (2d) 573 (B.C.S.C.) per Nemetz, J., as he then was).
8      In Coman Estate Re, 2000 CanLII 1415 (NUCJ), Hetherington J. of the Nunavut Court of Justice considered an application by a 21-year-old for an order terminating a trust postponing payment until she had attained the age of 25. The court observed:
[5] I will deal first with Heather’s application for an order terminating this trust, and directing that the assets held by the trustees be distributed to her for her own use absolutely. In support of this application her counsel relies on the rule in Saunders v. Vautier, (1841) 4 Beav. 115; 49 E.R. 282 (Ch.); aff’d 1 Cr. & Ph. 240; 41 E.R. 482. In D.W.M. Waters, Law of Trusts in Canada, 2nd ed. (TORONTO: Carswell, 1984) at 964, the author concluded that this rule operates in three situations. Only one is relevant here. It is described as follows (at 964):
A beneficiary who is adult, of sound mind, and entitled to the whole beneficial interest may require the trustees to transfer the trust property to him.
Counsel for Heather contends that this is exactly the situation in which she finds herself.
[6] Heather Coman is an adult and of sound mind. Is she presently entitled to the whole beneficial interest in the assets held in trust for her? Counsel for the trustees says that she is not.
[7] Counsel for the trustees argues that paragraph 5.4. and paragraph 7 of Mr. Coman’s will are contradictory, or that the effect of the former is modified by the latter. I will repeat the relevant parts of those paragraphs for ease of reference.
5. I give all property owned by me at the date of my death and all property over which I have a power of appointment at the date of my death to my Executor on the following trusts:
. . .
4. to transfer and deliver to my daughter Heather Anne Coman one half of my remaining estate, for her own use absolutely;
7. In the event that any portion of my estate is to be delivered to a Beneficiary then under the age of 25 years, I instruct that such portion be instead delivered in trust to my Trustees and retained or paid in the following manner:
. . .
And that upon the Beneficiary reaching the age of 25 years that the capital and accrued income of the Trust, if any, be distributed absolutely to the Beneficiary.
[8] Under paragraph 5.4, Heather acquired a vested interest in one half of the residue of her father’s estate when he died. However, counsel for the trustees argues that the effect of paragraph 7 is that this interest is subject to divestment if Heather does not reach the age of twenty five years. Should that happen, counsel says that the assets held in trust for Heather would fall into the residue of her father’s estate, and that they would then be held in trust for Oolahnee under the terms of paragraph 5.5. of the will. As a result, Heather is not yet entitled to the whole beneficial interest in the assets.
[9] With respect, I do not agree. Paragraphs of a will must be read in context, not in isolation, with a view to giving effect to the intention of the testator. When read in context, paragraphs 5.4 and paragraph 7 do not conflict. The latter does modify the former, but not in the way set forth by counsel for the trustees. Under paragraph 5.4 Heather acquired a vested interest in one half of the residue of her father’s estate. Under paragraph 7 her enjoyment of that interest is postponed until she reaches the age of twenty five. There is nothing in paragraph 7 to suggest a divestment if she does not reach that age. As a result, she is now the sole beneficial owner of the assets held in trust for her.
[10] I therefore grant Heather’s application, and order that the trust provided for in paragraph 7 of her father’s will is to be terminated. I order as well that the assets held in trust for her pursuant to paragraph 7 are to be delivered to her for her own use absolutely.
9      In Fast v. Van Vliet, 49 D.L.R. (2d) 616 (Fast), the Manitoba Court of Appeal considered a will that included the following provisions:
(d) The residue of my estate I divide into three equal shares. One-third to be paid to my son, Rollin Ralph Fast, of the City of Winnipeg, in the Province of Manitoba, as soon as conveniently may be after my decease. In the event of Rollin Ralph Fast predeceasing me and/or upon his death his share of my estate to be divided equally between Wade Leroy Fast and Rollin Carl Fast, upon their attaining the age of twenty-five years.
(e) Two-thirds share to be paid to my infant (G. M. Fast: Jessie A. Stevenson: Seija H, Jarvi:) grandchild, Calvin Ralph Fast, upon his attaining the age of twenty-five years.
(f) If any beneficiary hereunder shall be under the age of twenty-one years, to use so much of the income and/or capital of the share of such beneficiary as my Trustee in his discretion shall deem necessary to provide for his or her maintenance and education, as well as for any illness or other emergency him or her affecting.
(g) To pay to the parent, guardian or custodian of any beneficiary hereunder under the age of twenty-one years any monies directed to be used for the benefit of such beneficiary and the receipt of such parent, guardian or custodian shall be a sufficient discharge to my Trustee.
10      The majority carefully considered whether the interest was vested or contingent:
37 The question is whether the residuary bequest to the applicant upon his attaining the age of 25 years is vested or contingent. The law is said to favour the vesting as well as the early vesting of estates; yet this is essentially a question depending upon the construction of the instrument read as a whole. As a will takes effect upon the death of the testator, it follows that a bequest or devise in favour of a person in being normally confers an immediate vested interest. Courts have been strongly inclined to hold interests to be vested, so much so that they have devised the system, in cases which were obviously contingent, to declare that the terms of the bequest conferred an absolute interest in the first instance, subject to being divested on the happening of a definite contingency.
38 The soundness of that rule is not in doubt. It was derived from the anxiety of Judges to permit the failure of a contingent devise taking effect in the future, because of the death of the legatee prior to attaining a certain age. But this rule of early vesting is not an absolute one.
39 I must therefore look at the meaning of “vested” as opposed to “contingent interests”. I had occasion to look into the meaning of these words in Re Patterson Estate (1958), 66 Man. R. 416.
40 Jarman on Wills, 8th ed., vol. 2, has a lengthy chapter [chapter XXXIX] on vested and contingent interests, as well as the various rules applicable, commencing at p. 1341. The length of the chapter and the number of rules, many of them complex and some contradictory, indicate the difficulty of the problem. One can find quotations both supporting and conflicting to suit his wishes.
41 A contingent interest is one in the future liable to be defeated by the death of the beneficiary prior to the happening of the future event. “Vested” is therefore the opposite of “contingent” and contingent has the nature of “conditionalness”. In the instant case there is no necessity to speculate on the testatrix’ motives or desires. The language used is not an attempt to postpone the date of payment but clearly a condition that the bequest is to take effect upon the attainment of the age of 25.
11      The court observed further at para. 48:
This principle of early vesting, which at best in an indefinite one, is not a binding presumption of law. In the instant will the language is clear and unambiguous. One need not strain words or mind to find the testatrix’ clear intention. She did not wish her grandson to inherit until he attained the age of 25, and clearly said so. No one but a person who has attained the age of 25 can claim anything under such a gift. This is not the case of an antecedent gift followed by a postponement of enjoyment. The clause read in the context of the will indicates that there is no vesting until the applicant has reached the age of 25.
And at para. 50:
In the instant case we are not dealing with a direction as to payment after a clear bequest, but with a bequest conditional upon the beneficiary attaining a given age. The condition upon which the grandson is to inherit is so clearly expressed that to treat the bequest as vested upon his attaining the age of 21 would be to do violence to the plain, unambiguous language used by the testatrix.
12      What is clear in that case is that the will provided that the estate was not to be divided into shares for the beneficiaries until they attained the age of 25 years.
13      In contrast the shares in Donald Fargey’s will are to be created at the time of his death and the distribution of the share is postponed to the age of 25. It appears that what was anticipated was that equal shares would be created immediately and the income administered as the differing needs of the beneficiaries dictated, until their majority. There is then a gap until each share can be distributed to each brother as each attained the age of 25. The division into shares appears to take place before, not upon the attaining of the age of 25.
14      Accordingly, an intention to vest the shares before the beneficiaries attain their majorities is reasonably clear. To the extent that the provision may be ambiguous, the tendency of the law is to avoid intestacy, as noted in Fast at para. 56:
Courts do not normally incline towards intestacy but, even at that, the possibility of an intestacy in a residuary clause must be considered; at times it may be avoided, but when the testator’s language is specific and can be gathered with certainty from the entire will, one is not free to alter that which is clear simply because of the possibility or even the probability of an intestacy. The testator may well have anticipated just that and our modern devolution of estates Acts exist to cover such a situation.
15      I am of the view that the proper reading of the will is that the gift to Matthew vested upon Donald’s death, and only receipt was postponed.
16      Matthew Fargey’s application is for an order terminating the trust with the funds held to be paid for his benefit forthwith. There is a complication, however, in applying the rule in Saunders, which permits a trust to be extinguished where the beneficiary is of full capacity, and has the full beneficial interest. Matthew Fargey qualifies in that he is an adult, aged 23 years, and has a vested interest, but he does not have the full beneficial interest.
17      Where there is more than one beneficiary, Saunders provides that they must be of one mind and none may be under a legal disability (see para. 7 herein).
18      Joseph Fargey was born September 8, 1998 and is presently 17 years old. On the face of it, he lacks the capacity to consent to the arrest or collapse of the trust. He has an application before the court to vary the trust to permit encroachment on capital for his maintenance, education, or benefit.
19      The application is brought by Joseph’s mother, Sarah Sherratt, as litigation guardian.
20      None of the people who, in a legal sense, have a say in Joseph Fargey’s affairs oppose Matthew’s application, although they seek to have Joseph’s vested share dealt with differently because of his infancy. Apart from his mother, and Jillian Fargey, as trustee of the estate, the Public Trustee is not opposed:
I write to advise that the Public Guardian and Trustee has now reviewed your Petition to the Court and the materials and information provided in support.
The Petition and materials were reviewed on the basis that Joseph’s interest in the trust is vested and not contingent. Provided that Joseph’s interest in the trust is vested, the Public Guardian and Trustee is not opposed to a variation of the trust that provides Joseph with access to interest and capital sufficient to allow him to continue at Brentwood College. However, the Public Guardian and Trustee is of the view that the discretion in providing those funds should remain with the trustee and not be transferred to Joseph’s mother.
In the event that the Court finds that Joseph’s interest in the trust is contingent, we would need to consider the interests of any other contingent beneficiaries who were also minors.
I understand you will be providing a copy of this letter to the Court.
21      The materials before the court are sparse but counsel have advised, and it appears to be uncontroversial, that Joseph attends an expensive school, that it is in his best interests that he continue there, and that the income from the trust will not cover his tuition, which is the reason for the application on his behalf.
22      Taking the whole situation in view, I am satisfied that the gift to each brother is vested and that despite their differences in capacity, those who speak in a legal sense for Joseph do not stand in the way of the application of the rule in Saunders.
23      I am further satisfied that there is sufficient latitude under the Trust and Settlement Variation Act, R.S.B.C. 1996, c. 463, to grant the order Joseph’s litigation guardian seeks. The Act reads:
1 If property is held on trusts arising before or after this Act came into force under a will, settlement or other disposition, the Supreme Court may, if it thinks fit, by order approve on behalf of
(a) any person having, directly or indirectly, an interest, whether vested or contingent, under the trusts who by reason of infancy or other incapacity is incapable of assenting,
(b) any person, whether ascertained or not, who may become entitled, directly or indirectly, to an interest under the trusts as being at a future date or on the happening of a future event a person of a specified description or a member of a specified class of persons,
(c) any person unborn, or
(d) any person in respect of an interest of the person that may arise by reason of a discretionary power given to anyone on the failure or determination of an existing interest that has not failed or determined,
any arrangement proposed by any person, whether or not there is any other person beneficially interested who is capable of assenting to it, varying or revoking all or any of the trusts or enlarging the powers of the trustees of managing or administering any of the property subject to the trusts.
24      I am prepared to allow the application filed on behalf of Joseph, with the modification that I accept the recommendation of the Public Trustee and Guardian that the discretion over the funds in trust remain with the existing trustee and not be transferred to Joseph’s mother.
25      Accordingly, in relation to petition No. S150894 Vancouver Registry, brought by Matthew Robert Fargey, I order that the trust in his favour be terminated and the funds be paid to him forthwith after payment of all just and outstanding accounts.
26      In relation to petition No. S150895 Vancouver Registry, brought by Sarah Sherratt, as litigation guardian of Joseph Fargey, I order that the trustee may apply so much of the income and capital for the maintenance, education, and benefit of Joseph Fargey as she deems appropriate.
27      If further directions are required there shall be liberty to apply.

 

WESA S.58 Curative Provisions for Defective Wills

Cartoon Judgewill rectificationDefective Wills in WESA S.58

Estate of Young 2015 BCSC 182 is the first reported case of the Court’s curative powers under Section 58 of WESA to cure otherwise defective wills.

The executor brought an application for a Court determination as to whether two additional documents to the will of the deceased formed part of her will or not.

 

The Court held one document to be part of her will and the other one not to be.

It is primarily the reasoning of the Courts of Manitoba that the BC court follows that is most noteworthy.

The deceased had a will dated 2009 but when the executor attended at the home of the deceased, two signed documents were found:

1. a signed letter dated June 13, 2013 that changed a portion of the will dealing with the distribution of furniture, art, and the like. She gave an unsigned copy of this document to a friend.

 

She subsequently signed another document in October  that also  dealt with the distribution of the furniture, art, and the like, but it was not signed by the deceased, not was a copy of it given to the same friend.

 

[17]         Section 58 of the WESA is a curative provision.  It confers a discretion on the court to relieve against the consequences of non-compliance with testamentary formalities in a “record, document or writing or marking on a will or document”.  In prescribed circumstances, s. 58 permits the court to address and cure issues of formal invalidity in such documents.  It cannot, however, be used to uphold a will that is invalid for substantive reasons such as testamentary incapacity or undue influence.

[18]         Section 58 provides, in relevant part:

Court order curing deficiencies

58 (1)   In this section, “record” includes data that

(a)        is recorded or stored electronically,

(b)        can be read by a person, and

(c)        is capable of reproduction in a visible form.

(2)        On application, the court may make an order under subsection (3) if the court determines that a record, document or writing or marking on a will or document represents

(a)        the testamentary intentions of a deceased person,

(b)        the intention of a deceased person to revoke, alter or revive a will or testamentary disposition of the deceased person, or

(c)        the intention of a deceased person to revoke, alter or revive a testamentary disposition contained in a document other than a will.

(3)        Even though the making, revocation, alteration or revival of a will does not comply with this Act, the court may, as the circumstances require, order that a record or document or writing or marking on a will or document be fully effective as though it had been made

(a)        as the will or part of the will of the deceased person,

(b)        as a revocation, alteration or revival of a will of the deceased person, or

(c)        as the testamentary intention of the deceased person.

[19]         The court must be satisfied that a document represents the testamentary intentions of the deceased before granting an order that it is fully effective as a will pursuant to s. 58(3) of the WESA .  If such an order is made, the testamentary document may be admitted to probate.

[20]         Prior to enactment of s. 58 of the WESA, British Columbia was a “strict compliance” jurisdiction with respect to formalities for creating, altering, or revoking a will.  Since its enactment, this province has joined the ranks of other Canadian jurisdictions with curative provisions in their wills and estate administration legislation.  These include Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick and Prince Edward Island.

[21]         In some Canadian jurisdictions, the curative provision in force requires substantial compliance with traditional formalities.  Unlike those provisions, however, Section 58 of the WESA does not specify a minimal level of execution or other formal requirement for a testamentary document to be found fully effective.  Section 58 is most similar in this respect to Manitoba’s current curative provision:  s. 23 of the Wills Act, C.C.S.M. c. W150 (the “WA“).

Review of Manitoba Authorities

[24]         The leading authority on the court’s curative power is George v. Daily (1997), 143 D.L.R. (4th) 273 (Man. C.A.).  In George, the trial court found that a letter written by the deceased’s accountant was a valid will pursuant to s. 23 of the WA.  The deceased had informed his accountant of desired revisions to his existing will and the accountant wrote a letter the next day in relation to these instructions. The letter was sent to the deceased’s lawyer, who confirmed the instructions with the deceased less than two weeks later.  However, a new will was not promptly executed because the lawyer requested that the deceased first obtain a certificate of medical competency.  The deceased died two months later.  There was no evidence that a new will was drafted or that the deceased attempted to obtain the requested medical certificate.

[25]         The Manitoba Court of Appeal allowed an appeal from the trial judge’s order.  In doing so, the court found that the accountant’s letter did not reflect the deceased’s testamentary intentions.  While third party documents are not excluded from s. 23 of the WA, at para. 67 Philp J.A. stated the “court must be satisfied that the deceased knew and approved of the contents of the document which is presented for probate”.  On the facts found at trial, however, it was unclear if the deceased knew of the existence or contents of the accountant’s letter and it was clear that he intended for his lawyer to make the new will.  The court noted in this regard that testators often change their minds and remarked that, at best, the letter was instructions for the new will’s preparation.

[26]         Philp J.A. clearly explained the limits placed on the court’s curative powers in his reasons for judgment.  At paras. 62 and 65, he stated:

Not every expression made by a person, whether made orally or in writing, respecting the disposition of his/her property on death embodies his/her testamentary intentions…

The term “testamentary intention” means much more than a person’s expression of how he would like his/her property to be disposed of after death.  The essential quality of the term is that there must be a deliberate or fixed and final expression of intention as to the disposal of his/her property on death [citations omitted ]

[27]         In Kuszak v. Smoley, [1986] M.J. No. 670 (Q.B.), a partially-printed and partially-handwritten document signed by the deceased but not witnessed was found to reflect the deceased’s testamentary intentions.  The court relied on several factors in making this determination, including:

(1)      the document was in the deceased handwriting;

(2)      the document was signed by the deceased in four places;

(3)      the date was in four places;

(4)      the printed portion identified the document as a will and was properly filled out; and

(5)      there was nothing before the Court refuting the conclusion that the document embodied the deceased’s intentions.

In these circumstances, the handwritten document was validated pursuant to s. 23 of the WA.

[28]         A document similar to that in Kuszak was considered in McNeil v. Snidor Estate, 2008 MBQB 187.  In McNeil, there were several testamentary documents executed prior to the document at issue, which was a will form filled out in the deceased’s handwriting.  Prior to filling out the form the deceased had his childhood friend witness the blank form.  The other witness did not see the deceased sign the completed form.

[29]         After referring to the Kuszak factors, the court in McNeil determined that the will form embodied the deceased’s testamentary intentions and should be admitted to probate under s. 23 of the WA.  This determination was based on the following factors:

(1)      the deceased revoked his earlier Last Will and Testament and the specific dispositions therein, expressed his intent in respect of who should not receive the proceeds of his estate and disposed of the residue of his estate;

(2)      the document appointed an executor and provided him with instructions for the management of the estate including funeral and burial arrangements;

(3)      the document is entitled “Will” on the top of the first page;

(4)      each blank space on the form, with the exception of the final space for the second witness and one space (where the name of the executor appears instead of the name of the testator) was completed properly in the deceased’s handwriting;

(5)      the deceased signed the second and third page of the Will; and

(6)      the deceased had a witness sign the document, albeit at a later date.

[30]         In Martineau v. Myers Estate, [1993] M.J. No. 339 (Q.B.), the court considered whether a holograph will written in the deceased’s handwriting could be validated under s. 23 of the WA.  It determined that the document reflected the deceased’s testamentary intentions as the document was titled “Harold Myer’s Will”, was written entirely in the deceased’s handwriting and set out where the deceased’s furniture was to go.  The court also found that the presence of changes, deletions and a question mark did not indicate an unsettled mind and the name portion of the title at the beginning of the document was a signature because the style matched the deceased’s normal signature.  In these circumstances, the holograph will was validated under s. 23 of the WA.

[31]         Sawatzky v. Sawatzky, 2009 MBQB 222, concerned an application for an order under s. 23 of the WA for an unsigned typewritten document drafted by the deceased’s lawyer to be fully effective as the deceased’s will.  The document was entitled “Last Will and Testament” and was dated two days before the deceased passed away. Four other testamentary documents were also located.  These included a valid holograph will which would be operative if the document at issue was not admitted to probate.

[32]         Following a cancer diagnosis, the deceased brought the holograph will to his lawyer for the purpose of having a formal will prepared in essentially the same terms.  The lawyer typed up the will with one change to the form of executorship and brought the typewritten document to deceased, who, at that point, was hospitalized.  The deceased informed his lawyer that he wanted to make several changes to the will and the lawyer noted these changes on his copy of the typewritten document.  The lawyer returned the next day with the updated document but the deceased had passed away before he could sign it.  The updated typewritten document was the document at issue.

[33]         The court dismissed the application in Sawatsky and declared the holograph will valid.  In doing so, it relied extensively on George.  There was no evidence that the deceased reviewed the typewritten document in its updated or earlier form, which was a significant factor for consideration.  In addition, although the lawyer testified that the updated typewritten document reflected the deceased’s testamentary intentions, his testimony was not determinative and the deceased, who was not facing imminent death, did not tell his lawyer that his instructions were final or would not be changed.  Further, the lawyer had made changes to the executorship portion of the document without instructions, so the document did not reflect the deceased’s intentions in at least one aspect.

Summary

[34]         As is apparent from the foregoing, a determination of whether to exercise the court’s curative power with respect to a non-compliant document is inevitably and intensely fact-sensitive.  Two principal issues for consideration emerge from the post-1995 Manitoba authorities.  The first in an obvious threshold issue:  is the document authentic?  The second, and core, issue is whether the non-compliant document represents the deceased’s testamentary intentions, as that concept was explained in George.

[35]         In George the court confirmed that testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death.  The key question is whether the document records a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death.  A deliberate or fixed and final intention is not the equivalent of an irrevocable intention, given that a will, by its nature, is revocable until the death of its maker.  Rather, the intention must be fixed and final at the material time, which will vary depending on the circumstances.

[36]         The burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is a balance of probabilities.  A wide range of factors may be relevant to establishing their existence in a particular case.  Although context specific, these factors may include the presence of the deceased’s signature, the deceased’s handwriting, witness signatures, revocation of previous wills, funeral arrangements, specific bequests and the title of the document:  Sawatzky at para. 21; Kuszak at para. 7; Martineau at para. 21.

[37]         While imperfect or even non-compliance with formal testamentary requirements may be overcome by application of a sufficiently broad curative provision, the further a document departs from the formal requirements the harder it may be for the court to find it embodies the deceased’s testamentary intention:  George at para. 81.

 

UBC Property Transfer Set Aside For Being a “Fraud On a Power”

Fraud On a Power

It is a fraud on a power contained in a will to use a society created in accordance with the terms of the will to achieve indirectly the transfer of property to a non-object of that power which could not be done directly as was quoted by the BCCA in The Land Conservancy of BC v UBC 2014 BCCA 473.

The headnote is interesting and reads:

The University of British Columbia (UBC) challenged the transfer of a historic property known as the Binning House by the executors and trustees of the estate of the owner of the property.  

The testatrix’s will instructed the trustees to either create a society for the preservation of the property and transfer it to that society or to sell the house and give the net proceeds of the sale to a fellowship fund with UBC.  

The trustees entered into talks with the respondent, a society dedicated to historical preservation, about assuming ownership of the property.  After receiving legal advice that the will did not permit them to transfer the property directly to the respondent, the trustees created a society and transferred the property to it.  

The society immediately transferred the property to the respondent.

 When the respondent encountered financial difficulties and proposed to sell the Binning House, UBC challenged the transfer by the trustees as a fraud on the power granted to them in the will.  

The application judge dismissed the challenge, finding that the will granted the trustees significant discretion to fulfill the testatrix’s hope that the Binning House would be preserved for historical purposes. 

Held: appeal allowed.  Although the trustees acted in good faith, they deliberately exercised their power under the will for the ulterior purpose of benefiting a non-object of the power.  The transfer of the Binning House by the trustees to the new society constituted a fraud on the power given to them, and the transfer is void.

In order to succeed in having the transfer of the Binning House declared void, UBC had the onus of proving that the transfer was a fraud on the power contained in the Will authorizing the Trustees to transfer it.  The phrase “fraud on a power” is a term of art, and it does not connote fraud in the usual sense of dishonesty.  This is explained by Geraint Thomas in Thomas on Powers, 2d ed. (Oxford: Oxford University Press, 2012) at para. 9.03:

The doctrine of fraud on a power is not founded upon a state of conscience imputed to the donee in equity.  Dishonesty of some kind is often present, but it is not essential.  Indeed, the donee’s intention or motive may be perfectly honest.  Thus, the doctrine may apply where the donee honestly believes that, by his exercise of the power, he is disposing of the property in a more beneficial manner, or in a way which is consonant with what he believes would have been the real wish of the donor of the power …

[Footnotes omitted.]

[43]         The parties are agreed, as they were before the chambers judge, that the two basic elements of a fraud on a power are as set out in Thomas on Powers at para. 9.02:

(a)      “a disposition beyond the scope of the power by the donee, whose position is referable to the terms, express or implied, of the instrument creating the power;” and

(b)      “a deliberate breach of the implied obligation not to exercise that power for an ulterior purpose”.

[44]         The first element involves the interpretation of the Will to determine whether the disposition of the Binning House by the Trustees was beyond the scope of the power given to them in the Will.  The second element involves a consideration of the Trustees’ actions.

(a)  Scope of the Power

[45]         The parties are also agreed as to the general principles governing the interpretation of wills.  The basic principle was articulated by the Supreme Court of Canada in National Trust Co. Ltd. v. Fleury, [1965] S.C.R. 817 at 829:

            In the construction of wills, the primary purpose is to determine the intention of the testator and it is only when such intention cannot be arrived at with reasonable certainty by giving the natural and ordinary meaning to the words which he has used that resort is to be had to the rules of construction which have been developed by the Courts in the interpretation of other wills.

[46]         Other relevant principles include the following statements from James MacKenzie, Feeney’s Canadian Law of Wills, loose-leaf, 4th ed. (Markham, Ont.: LexisNexis, 2000):

§10.43       … the most influential rule of construction is that the court may construe the words used by the testator in their ordinary sense.…

* * *

§10.60       The testator’s intention is to be gathered from a consideration of the will as a whole and not solely from the words used, say, in an unclear portion of the will.  The ordinary meaning rule and other rules of construction are entirely subservient to the content of the will.  This idea is often expressed by saying that the testator’s intention is to be ascertained, first of all, from the four corners of the will.

* * *

§10.61       It is reasonable to presume that the testator’s intention was that effect be given to every word of his or her will …

[Footnotes omitted.]

[47]         It is appropriate to consider surrounding facts and circumstances only if the language of the will is ambiguous: Feeney’s Canadian Law of Wills at §10.51.

 

 

Sibling Greed After Death

Greed

Sibling Greed After Death is an excerpt taken from a longer article I have written on the topic of just how greed enters the equation amongst siblings after the death of a parent, especially the last one.

It is almost guaranteed that upon the death of the last parent, every resentment—real or perceived—dormant or simmering under the skin of a child, will erupt; the way it manifests is generally in terms of possessiveness, jealousy, spitefulness, argumentativeness, and greed. Often the issue is not even about material possessions but rather the explosion of a culmination of years of often-repressed hurt feelings.

The traditional family unit has continued to erode over the last 50 years. As a result, directly or indirectly, there are likely more dysfunctional families than functional. The blended family concept remains problematic, not to mention litigious, and there has been a marked increase in sibling estate litigation.

Greed is often seen to manifest itself in dysfunctional families when individuals have had negative experiences in childhood such as the death of a parent, drug or alcohol additions, or a narcissistic parent where nurturing has been lacking—a step-parent who has not bonded, paid caregivers, or the use of television as a child-minder. The lack of a nurturing environment and the experience of having to go without something so essential to a child appears to have a very detrimental effect going into adulthood.

It might be said that every estate litigation file has an element of greed to it and often a significant amount but, in my experience, most siblings seek only a” fair and equitable” share of their parents’ inheritance and have great difficulty accepting that one or more sibling will inherit a greater share in the absence of a reasonable and rational reason.

Greed demolishes “the equity” siblings seek from their parents. There cannot be family harmony if one or more siblings receive the bulk of an inheritance from the parents, to the detriment of the remaining siblings.

In 40 years of dealing with inheritance litigation, I note that most sibling disputes can be rather simplistically reduced to the perception that where one sibling inherits more money than another, that sibling was simply loved more by the deceased parent. That is an intolerable insult for the sibling who received less. Money and asset division are equated with the level of parental love and approval.

The Differences Between Joint Bank Account and Joint Property

There are some particular features of a joint bank account that distinguish it from a joint tenancy in real property and these have been discussed by our Court of Appeal (Bergen v. Bergen, 2013 BCCA 492): ( see my blog on Bergen dated August 26.14

These differences between a joint bank account and a jointly owned real property as discussed in the Bergen case were re-iterated recently by Justice Steeves in Zeligs v Janes 2015 BCSC 7:

[39] The practicalities of a joint bank account … are different from those of a joint tenancy in respect of other forms of property.

Obviously, a depositor’s interest in a bank or investment account is a chose in action: the depositor is a creditor, and the bank or other depository is a debtor that is bound, subject to the terms of the agreement between them, to pay over the balance in the account on demand. In this context, it is difficult to conceptualize the operation of the four unities (of title, interest, time and possession) from which joint tenancy historically arose. (See generally Law Reform Commission of British Columbia, Report on Co-Ownership of Land (1988), at 3.)

Most importantly, where one of the holders of a joint account wishes to discontinue the arrangement and eliminate the right of survivorship, the usual course is to bring the account to an end – if necessary by draining it to a zero balance. (See generally Waters (4th ed.) at 440 [Waters’ Law of Trusts in Canada, 2012]; see also Edwards v. Bradley, supra at 233, quoted above [[1956] O.R. 225 (Ont. C.A.)]; and Pecore at para. 50.)

The remaining account-holder who claims to have had a beneficial interest in the withdrawn funds may pursue an equitable remedy such as constructive trust or tracing (see Waters, 4th ed., at 440), but this may be a complex process.

[181]     As I see it, the dynamic nature of joint accounts with funds being withdrawn and deposited over time does not easily accommodate the application of the unities. The nature of the joint account is that it is to be used for withdrawals and deposits and it cannot be that one of the unities is destroyed by doing so. In short, the withdrawal of funds by one tenant by itself cannot sever a joint account. In contrast, in the case of real property, either tenant can sever the joint tenancy at any time by destroying one of the unities and the value of the resulting equal shares held in of the unities and the value of the resulting equal shares held in common is subject only to market conditions. 

Mental Capacity Required For a Will Is the Same as Inter Vivos Transfer

 Mental Capacity Required For a Will

 

Brydon v Malamas 2008 BCSC 749 at paragraph 47 confirms that the test for mental capacity for an inter vivos transfer ( while  alive), is the same as the test of testamentary capacity, including the shifting of the burden of proof to the propounder of the will once suspicious circumstances are presented from the party attacking either the will or the inter vivos transfer.

 

The Court stated:

[46]            The parties seemed to agree that the mental capacity required by law to enter into the inter vivos transactions completed by Stella on October 12 and 13, 2004, was much the same as the mental capacity required to make a valid will.  There is some authority which supports that common sense proposition, and I was referred to the following cases on this point:  Keljanovic Estate v. Sanseverino 2000 O.J. No. 1364 (Ont.C.A.) at paragraph 37; Mikita v. Lick [1992] B.C.J. No. 935 (B.C.S.C.); and Johnson v. McArton [1986] B.C.J. No. 2227 (B.C.S.C.).  It is agreed that the burden of proving that the will of October 19, 2004 is valid is on the defendants.  However, the defendants say that the onus of proof is on the plaintiff to negative mental capacity in respect of the inter vivos transactions.

 

 While the standard of proof remains the civil standard, where suspicious circumstances exist, the proponent must prove testamentary capacity to a higher degree of certainty than a mere fifty-one percent probability.  In such a case:

The extent of the proof required is proportionate to the gravity of the suspicion….

See Re Martin; MacGregor v. Ryan, [1965] S.C.R. 757 at p. 766 (cited in Vout v. Hay at par. 24).

The Judge found that the deceased was mentally incapable due to delusions:

The inter vivos gifts

[226]        I have earlier referred to several authorities which suggest that the legal test for mental capacity to make a will is similar to the test for mental capacity required to enter into and complete the inter vivos transactions completed by Stella on October 12 and 13, 2004.  I would also note that Sedgewick J. in Skinner v. Farquharson made reference to this similarity (with apparent approval) as follows:

…In Jenkins v. Morris, 14 Ch. D. 674, the same principle was applied to a contract inter vivos the rule being that when the existence of an insane delusion is once established the question to be determined is whether it had any, and if any what, influence upon the performance of the act or transaction which for the time being is under consideration.   ….

[227]        Having decided that the defendants have failed to prove that Stella had testamentary capacity, is that conclusion sufficient to invalidate the bank transactions on October 12, and the land transfer on October 13, 2004?  Or should it be presumed that Stella had the mental capacity required to by law to complete those transactions, and require the plaintiff to prove affirmatively that Stella did not have sufficient legal capacity? 

[228]        It seems to me that the answers to these questions might be found in the rules of law relating to inter vivos gifts.  The general rule is that, where a person makes a gift of money or property to some person other than his or her spouse or child, a presumption of resulting trust is created.  This presumption casts an onus on the recipient of the gift to rebut the presumption, which may be done by proving that the donor of the gift intended that it should be a gift.  See Pecore v. Pecore [2007] 1 S.C.R. 795 at paragraphs 22-26 and 43-44.  At paragraph 53, Rothstein J. (speaking for eight members of the Court) stated:

[53]      Of course, the presumption of a resulting trust means that it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor.  Otherwise, the assets will be treated as part of the transferor’s estate to be distributed according to the transferor’s will.

[229]        It is apparent that, when Stella made Mary and Jim Malamas joint account holders with her, and made them the beneficiaries of her R.R.S.P.; and when Stella transferred a joint interest in her house and land to Mary, there was no consideration given to her.  They were not her spouse or child.  Consequently, I think the transactions should be examined in accordance with the rules of law relating to inter vivos gifts.  An unusual feature of this case is that Stella purported to deal with her bank accounts and her R.R.S.P. in her will, after already having made gifts of them to Mary and Jim Malamas the previous day (although Jim Malamas did not finalize the bank account transfers to him until October 20).  Brian Gregory of course knew that Stella had transferred her land to Mary, and so her real property was not included in the will.  But he knew nothing of what Stella had done the previous day and so he drew a will based on her instructions.  (As I have mentioned, some of Stella’s statements to Mr. Gregory on October 13, indicate that she may have forgotten some or all of what she did the previous day at the bank.)  Stella seemed unaware that there was not much left for her dispose of by will, in light of what she had already done.

[230]        As I have previously found, the evidence establishes that Stella appeared to know what she wanted to do in respect of these matters, appeared to know what she was doing, and to approve of what she was doing when she completed all of these transactions.  If all the defendants had to do in order to rebut the presumption of resulting trust, was to prove that Stella intended to make gifts to them, they would easily succeed.  But I think the issue is much more complex than that in the circumstances of this case, where testamentary capacity has not been established for the same time period which includes these inter vivos transactions.  In my opinion, in order to rebut the presumption of resulting trust, the defendants must prove not only that Stella intended to make gifts, but also that her intention in this regard was not affected by any insane delusion.  In other words, I think that the defendants must prove the same facts required to establish that Stella had testamentary capacity.  This of course, they have failed to do.  It is therefore my opinion that the presumption of resulting trust carries the day, and the gratuitous inter vivos gifts must be set aside.

[231]        If my analysis of this issue is wrong, I would find (as previously alluded to) that the evidence proves that the main reason why Stella did what she did, was because of her delusion that the plaintiff had broken a promise she made to Stella, not to sell the Vine Street property.  That finding leads inevitably to the conclusion that the plaintiff has proved on the balance of probabilities that Stella was not mentally competent at the time of the challenged transactions.  In my opinion, the standard of proof that would be required (assuming that the plaintiff bears the onus) is simply, “more probable than not.”

What Litigators Look For In Will Drafters Files

Litigators

What Litigators Look For In Will Drafters Files

 

R. Trevor Todd

Presented November 15,2014 at the BC Canadian Bar Conference in Scottsdale Arizona

 

 

I would be remiss in any discussion regarding the taking of will instructions, especially from the elderly and frail, not to start with a wise quote from former Southin JA. in Chalmers v. Uzelac 2004 BCCA 533

 

“[1]       Every solicitor who, as part of his or her practice draws wills, should read, mark and inwardly digest at least once each year the judgment of Sir John Alexander Boyd, C. in Murphy v. Lamphier (1914), 31 O.L.R. 287, the Canadian locus classicus on a solicitor’s duty in taking instructions, especially at pages 318-321.

 

[2]       That duty is owed not only to those who might, or ought to be, objects of the testator’s bounty but also to the testator, for only the solicitor can be the testator’s voice from the grave; the solicitor discharges that duty by making proper inquiries of the testator at the time of the making of the will and by taking and preserving proper notes of the responses and of any observations relevant both to capacity and to knowledge and approval of the contents of the will. The reason for the latter obligation ought to be obvious but, lest it is not, I state it: How can a judge put confidence in the testimony of a solicitor who says, years (here 9) after taking instructions, but keeping no notes of those instructions, that the testator said this or that as the reason for changing an earlier will?”

 

What follows is an extract from the Murphy head note and a comment from Friesen and Friesen, in addition, and must say, that if will-makers did follow the outlines of Murphy v Lamphier,  and many like decisions, a bottom feeding scum sucking estate litigator like myself could be hard pressed for work.

 

“It is an error to suppose that, because a person can understand a question put to him and give a rational answer, he is of sound mind and capable of making a will: the competency of the mind must be judged by the nature of the act to be done, and from a consideration of all the circumstances of the case.

 

The grand criterion by which to judge, whether the. mind is injured or destroyed, is to ascertain the state of the memory.  Memory affords all the materials on which to exercise judgment and to arrive at a conclusion or resolution.

 

In the case of a person enfeebled by old age or with faculties impaired by disease, and particularly in the case of one labouring under both disabilities, a solicitor called in to prepare a will does not discharge his duty by simply taking down and giving expression to the words of the client, without being satisfied by all available means that testable capacity exists and is being freely and intelligently exercised in the disposition of the property; and, in dealing with a person needing protection and advice, it is important for the solicitor to find out if there be a former will, and its nature, with a view of getting at the reasons for any variations or changes therefrom, if such changes be contemplated.

 

The notes of haste, stealth, and contrivance attached to this transaction, and were not removed by the evidence.”

 

The duty was similarly described by Kroft J. in Friesen v. Friesen Estate (1985) 33 Man.R.(2d) (Q.B.) at para 77: as follows:

 

“6.          The duty upon a solicitor taking instructions for a will is always a heavy one. When the client is weak and ill, and particularly when the solicitor knows that he is revoking an existing will, the responsibility will be particularly onerous.

 

 

7.             A solicitor cannot discharge his duty by asking perfunctory questions, getting apparently rational answers, and then simply recording in legal form the words expressed by the client. He must first satisfy himself by a personal inquiry that true testamentary capacity exists, that the instructions are freely given, and that the effect of the will is understood.”

 

 

SUGGESTIONS TO AVOID POTENTIAL LIABILITY

 

 

 

  1. Take written detailed notes and date them.  Consider typing them and providing your client with a copy.

 

  1. Take your time.  Be cautious.  Seriously consider charging your actual time on a Wills file.  If your client objects, then educate the client about the amount of time needed to prepare a Will so as to ensure that the client’s lifetime accumulated wealth will pass to his or her chosen heirs.

 

  1. When the Will is ready for execution, read it through a number of different times, each time assuming a different scenario involving contingencies relevant to the Will. (Ask the “what ifs?”)

 

  1. Do not be a dabbler. If you do not routinely draw Wills, then don’t do them at all.

 

  1. Use a checklist when taking instructions. The Law Society Practice Checklist Manuals and PLTC materials are an excellent start, and can be modified to suit you .  I always use it when I cross-examine a lawyer or Notary. It often makes them look incompetent if they have not followed a checklist.

 

  1. Get all the necessary information about your client’s personal circumstances, including special situations such as a disabled child.  It is essential to obtain complete information about the client’s estate, including details about the nature and value of each asset, its location, and how it is registered.

 

  1. Review copies of earlier Wills, insurance policies, separation agreements, marriage contracts, or any other documents that may affect the client’s estate.

 

  1. Take the necessary time to satisfy your responsibility to ensure that the client understands what the Will says, what it means, and that the client approves its contents. It is essential to go through the Will clause by clause with the client. The lawyer should attend upon the client to make sure that the Will is properly executed. If this is not possible, the lawyer has a duty to make sure that when the original of the Will is sent out for signature, it is accompanied with a very clear letter of instructions on how to execute the Will. You have a further obligation to subsequently ensure that the Will is in fact executed and is put in safekeeping.

 

  1. It  is  essential  to   keep  very  careful   notes  of Will   instructions  and   all communications with Will clients.

 

  1. Utilize good legal assistants, but do not place too much reliance on them. Ultimately you cannot delegate your own responsibility to ensure that Wills are prepared correctly.

 

  1. Always file a Wills Notice with the Division of Vital Statistics. Although it is not mandatory, you should do so, particularly in light of the development of liability in favour of disappointed beneficiaries.

 

  1. Maintain a Wills index with the name and address of the testator, the  number of the Will file, the name of the executor, the date of execution of the Will, and the Will’s location.

 

 

  1. Deliver a final letter to the client confirming the location of the Will, the date that it was signed, and reminding the client to review the Will from time to time. It is also essential to advise that divorce or separation may affect the validity of some provisions of the Will as per WESA.

 

  1. Probe the testator’s mind to ensure that there is sufficient mental capacity to prepare a Will. If there is any doubt, a medical opinion should be obtained.  Bear in mind, however, that capacity is ultimately a legal test, not a medical one.

 

  1. Always take instructions in the absence of potential beneficiaries or executors.

 

  1. Record detailed  reasons why any person who would be an appropriate object of the testator’s bounty is being omitted from the Will, and then consider the preparation of a detailed memorandum to the Will in conjunction with your notes.

 

  1. Try not do any codicils. It is too easy to make a mistake.

 

  1. Do not use the words “issue”, “per stirpes”, “per capita” –  use instead “child”, “grandchild”.

 

  1. If a charity is a beneficiary in a Will, then it is imperative to do two things:

 

(I)        understand the structure of the charity, and obtain the testator’s instructions on which part of the charity her or she wishes to benefit; and

 

(ii)        ensure that the name of the charity is correct. The easiest way of understanding the structure of the charity and finding out its proper name is to telephone the charitable organization and explain your inquiry relates to a gift made by Will, and speak with a person authorized to give you the information. See also each year’s Canadian Donor’s Guide for assistance.

 

  1. Only sign one original, and make it clear that a copy is, in fact, a copy.

 

  1. Use memorandums to explain why certain beneficiaries are not being provided for, in situations where a cause of action for a Wills Variation action could arise.  Set out the reasons in detail, and try to ensure that the reasons set out are factually accurate, and not merely vindictive and mean spirited.

 

  1. Do not under any circumstances attempt to prepare a Will that is “over your head” or that you should not be preparing due to restrictions on your practice, i.e., Notaries doing Wills with discretionary trust provisions. “If in doubt, refer it out” should be your motto.

 

  1. Try to use percentages, rather than specific amounts, and make sure the total equals 100%.

 

  1. Ensure that the executors have sufficient powers to carry out their job. For example, if the testator has a business, then include powers to operate the business, such as the power to order inventory. Otherwise the trustee may only be able to operate the business much like a receiver, unless appointed special powers by the court, on application.

 

  1. Do not take instructions from a testator where you are relying on an interpreter where the   interpreter is a potential claimant to the estate.

 

 

  1. Most importantly, make written observations of your opinion of the client`s testamentary capacity, after probing the mind for the entire interview, but “vigorously” for at least 15 minutes.

 

 

AND DON’T FORGET THE WESA STUFF

 

Section 58 of WESA gives the court the power to remedy defective formalities of execution that might otherwise have defeated the will maker`s testamentary intentions.  What is interesting is that the section now allows the court to look at any `record, document or writing or marking on a will or document`in order to determine and give effect to the will maker`s intentions.

 

Since the range of documents that the court may now consider is quite broad, including electronic documents and potentially solicitors’ notes and even a signed draft will, it makes it all the more important for the will maker to keep detailed notes of the will maker’s intentions, instructions, mental clarity and ability to address the necessary issues required to sign a power of attorney.

 

In addition, the new definition of spouse both in WESA and in the Family Law Act is now quite  complicated and may require solicitors to investigate the nature and extent of the person’s relationship with a partner, including discussions of such issues as a  possible intention to separate, should the matter become relevant at a later challenge of the Will

 

Mental Capacity Requirements

 

 

We have all heard the words of Banks v Goodfellow and many cases that followed relating to the degree of mental capacity required, but the legislatures’ enactment of the Power of Attorney Act, I would now submit,  should be substituted for the requirements of what capacity is required for a testator to have sufficient capacity to prepare both a will or a power of attorney.

 

Prior September 2011 and the introduction of this legislation, the BCCA In Egli had  ruled that one really only needed to know what a power of attorney is, and that it required a lower standard of capacity required than for a will.

 

In light of the requirements of this statute, that decision can no longer be correct.

 

Section 12 of the Power of Attorney Act specifies that an adult may not make an enduring power of attorney unless the adult is incapable of understanding the nature and consequences of the proposed enduring power of attorney.

 

“12      (1) An adult may make an enduring power of attorney unless the adult is incapable of understanding the nature and consequences of the proposed enduring power of attorney.

 

(2) An adult is incapable of understanding the nature and consequences of the proposed enduring power of attorney if the adult cannot understand all of the following:

 

(a)        the property the adult has and its approximate value;

 

(b)        the obligations the adult owes to his or her dependants;

 

(c)        that the adult’s attorney will be able to do on the adult’s behalf anything in respect of the adult’s financial affairs that the adult could do if capable, except make a will, subject to the conditions and restrictions set out in the enduring power of attorney;

 

(d)       that, unless the attorney manages the adult’s business and property prudently, their value may decline;

 

(e)        that the attorney might misuse the attorney’s authority;

 

(f)        that the adult may, if capable, revoke the enduring power of attorney;

 

(g)        any other prescribed matter.”

Commonlaw Elderly Spouse and Wills Variation Act

Commonlaw Elderly Spouse And the Wills Variation act

 

McFarlane v Goodburn Estate 2014 BCSC 1449 involved a plaintiff and testator, both widows and in their mid-60s to began to live together in 2000.

They were both financially independent, and the evidence was clear that they had in fact lived in a marriage like relationship for at least two years, thus the spouse qualified as same under the wills variation act.

The issue of marriage like relationship was in fact raised and the court  having regard to objective and subjective criteria  found that  the parties shared a marital bed  and that the care  and  attention provided  by the plaintiff to the deceased  over the years was well beyond a relationship of a friend .

He lived in her house  ” rent-free”, but provided  payment of household expenses  and  did  household services .

The testator ultimately suffered ill health in later years and underwent nine different surgeries battling lung cancer. The plaintiff cared for him during his periods of convalescence

during the testator’s convalescence, the plaintiff took the testator to a lawyer and has his will drawn so as to provide to only his children and grandchildren, and made no provision for his surviving spouse.

After executing his will the testator applied for disability award with Veterans Affairs in respect of his cancer, and while extremely close to death, he received an award of $262,000. This made the gross value of the estate $780,000;

the plaintiff bought a wills variation action and was awarded $90,000 primarily based on the testator’s moral obligations to provide for his spouse as a result of the excellent care provided that she provided when he was so gravely ill.

Although the plaintiff made no claim based on financial need, need is to be considered in determining what is adequate just and equitable but is no longer the sole governing factor, and is only a factor to be considered in determining what is ” adequate, just and inequitable”.

Wrongdoer Concealed Information Cannot Rely On Limitation Defence

Cheats and LiarsWhere a party has actively concealed wrongdoing, he or she cannot rely on a statutory limitation period to frustrate a cause of action by defending on the basis that the claim is out of time.

 

In order to show concealed wrongdoing, the party asserting concealment must show:

(a) the parties are in a special relationship with one another;

(b) given the nature of this relationship, the conduct complained of amounts to an “unconscionable thing” for one to do to the other;

(c) the person conceals the right of the other (either actively, or as a result of the manner in which the act that gave rise to the right of action is performed).

At common law, an action in negligence or for an intentional wrong is not permitted against or on behalf of a deceased person.

The right to sue arises from statute, in BC, the Trustee Act . As a result, compliance with the Act is a must.

The Act includes its own limitation period for actions, providing that an action under section 38 “shall not be brought after the expiration of two years from the death of the deceased”.

Unlike the Limitations Act, 2002, there is no “discoverability” factor to be considered.  The date is fixed.

The legal doctrine of “fraudulent concealment was recently discussed by the Ontario Court of Appeal in Rajmohan v Solomon family Trust ( no cite available )

In  the Rajmohan v Solomon Family Trust case  , a husband and wife gave  second and third mortgages to a mortgagee in amounts totalling $125,000.

The  mortgages went into default and proceedings were commenced against the  mortgagors. The mortgagors commenced an action against the mortgagee, alleged  that the mortgages were fraudulent and that they did not receive any advances.

The mortgagee commenced a third-party action against the estate of the (since  deceased) lawyer who acted for him, alleging negligence in the handling of the  mortgages, including a claim of fraudulent concealment.

The fraudulent  concealment claim was necessary because the third-party action was commenced  more than two years after the lawyer’s death. The estate of the deceased lawyer  brought a motion for summary judgment to dismiss the third-party action on the  basis that it was statute barred under s. 38(3) of the Trustee Act.

The  motion succeeded. The decision was appealed and the Court of Appeal dismissed the appeal, primarily on the basis that the mortgagee was deceased and there was no evidence with respect to the instructions given the lawyer other than a reporting letter , so that the court could not find any evidence that went beyond mere negligence , and not reach the threshold of ” an unconscionable thing”.