“Inheritance” Given Broad Interpretation

"Inheritance" Given Broad Interpretation

The words inherit and inheritance were given a very broad interpretation in Lotimer v Johnston 2019 BCSC 2098.

The parties were married for many years, but separated in 2007 and negotiated a separation agreement.

The husband agreed that as the wife had shared an inheritance she received from her mother during the marriage, that he would provide to her 25% of any inheritance that he would receive from his mother. The agreement was negotiated between the couple and reduced to writing by lawyers.

Soon after the separation agreement was signed the husband showed the document to his mother, and a few months later, the mother changed her will, to instead leave the husband only $10,000, rather than sharing equally in her $1 million estate with his sister.

Between the date of the separation agreement and the mother’s death, the husband received gifts totaling $330,000.

The mother put the husband and his sister on title with her on her home as joint tenants.

By 2012 the mother had liquidated most of her assets and started to give them to her son, daughter and grandchildren,

The wife successfully argued that $310,000 of that sum was in fact the husband’s inheritance and ordered that the wife be paid one quarter of that said sum.

The husband argued that the dictionary definition of inherit and inheritance supports the view that it inheritances property received from an ancestor under the law of intestacy or from anyone pursuant to a will.. Both avenues contemplated transfer of property effective upon the death of the giver. He argued that the monies that he received from his mother during her lifetime were inter vivos gifts that were made not an expectation of death.

The court rejected this argument, and said that the words inherit and inheritance are not legal terms of art, having a specialized legal meaning that it must be assumed that the parties, assisted by their lawyers, intended to invoke. The court found that the agreement was substantially based on discussions between the parties, rather than careful legal drafting.

The court held that the interpretation of contractual language in most cases, including this one, is a question of mixed fact and law grounded in the circumstances at hand.

The word inheritance encompasses a range of meanings, and the court concluded that the concept of an inheritance does not require that the giver has died.

The court instead allowed a broader understanding of inheritance that encompass gifts made by the mother in her lifetime that she intended to substitute for a gift effective on death, and found that was consistent with the language used by the parties in light of the surrounding circumstances.

The gifts were found to be intended by the mother to stand in place of the testamentary bequests to her son.