Wills Variation: Second Spouse Limited to Life Estate

Wills Variation: Second Spouse Limited to Life Estate

Klotz v Funk 2019 BCSC 817 dismissed the wills variation claim of a 78-year-old widower and found that the bequest to him of a life interest in the deceased’s one half interest in the matrimonial home was a sufficient provision for him.

It was a second marriage for the plaintiff and third for the deceased. Their marriage like relationship  was 20 years in duration.

The estate of the deceased consisted of a one half interest in the former matrimonial home with a value of $357,000 as of death.

The parties owned a number of properties both separately and together, both prior to and during their relationship.

The three defendants were adult children of the deceased from relationships.

The deceased had sold the home she owned in Florida prior to purchasing the subject home in 2010 with the contribution of approximately $100,000.

Prior to her death the deceased made arrangements to transfer approximately $80,000 her children and grandchildren.

The parties ultimately designed and built their matrimonial home in Surrey with the plaintiff contributing the majority of the costs for the construction.

Initially the property was put solely in the name of the plaintiff, but after one year was transferred into joint tenancy with the deceased who paid no consideration for her interest.

Upon learning that she had terminal cancer the deceased severed the joint tenancy, so that the plaintiff and the deceased became tenants-in-common.

The court found that the deceased met both her legal and  moral obligations that she owed to the deceased by leaving him the life interest in her half of the matrimonial home.

The court was also satisfied that the provisions of her will were well within societies reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards . The court cited the leading decision of Tataryn v Tataryn (1994) 2 SCR 807 at 821.

The court held that the life interest in the matrimonial home, including the potential rental income therefrom, and the plaintiff’s entitlement to remain in the home until such time as he no longer chooses to do so, resulted in a situation where there was “no or very little risk that he will never lose the roof over his head”

Rather surprisingly, the court stated that had the plaintiff wished to protect himself from severance of the joint tenancy, he could have entered into a marriage agreement to protect is now asserted interest. (This is  an uncommon practice in estate and marriage agreement planning).

What was quite different about the reasoning of the justice in this decision was that after reviewing many of the leading decisions in wills variation law is that with respect to the division of property, the court referred in addition to family law decisions such as Khan v Gilbert 2019 BCCA 80:

“The appeal court referred to Jaszczewska v Kostanki 2016 BCCA 286, with respect to the principles of relative contribution in found in section 65 of the former Family Relations act that permitted the court to consider, and dividing property, circumstances relating to the acquisition, preservation, maintenance, improvement, or use of property.”

The Family Law act in section 95 (2) refers rather narrowly to career contributions and to post separation increases in value beyond market trends caused by one spouse.

The court again referred to a section 95 family law act decision Slavenova v Ranguelov 2015 BCSC 79 at para 60”

“The significant unfairness contemplated by section 95, requires much more than differing financial contributions in a relationship. Exactly equal contribution is more likely exceptional than commonplace. The new regime under the Family Law act recognizes that partners will come to a relationship in differing circumstances and accounts for those in the concept of family property and excluded property. The starting point in the division of property analysis already applies significant exclusions.”