Lost Wills and the Presumption of Revocation

lostLost Wills and the Presumption of Revocation

An update to this article is that since the introduction of WESA on April 1, 2014, I anticipate that the courts will be more willing to allow copies of wills as proof of the testator’s intention to more easily admissible into probate

Often when a person dies, his or her original will cannot be found and will never be found.

Frequently years have passed between between the date the will was signed and the testator’s death.

In many circumstances a true copy of the will be accepted for probate in the place of the original will.

However, if the will was last known to be in the custody of the testator, and is not found after the death of the testator, then the presumption is that the testator destroyed the will with the intention of revoking it.

The presumption of revocation may be rebutted by evidence such as the following:

A. The character of the testator;

B. The existence of codicils;

C. Statements made to beneficiaries with respect to provisions made for them; and

D. Words and actions of the testator before and after the execution of the will.

The degree of evidence required by the Courts to rebut this presumption is not usually very high.

If the existence of a valid will is proved then the presumption of revocation is rebutted. The contents of the will must then be proved.

If there is a copy or completed draft, and the solicitor who prepared the will gives evidence as to proof of execution by the testator, there should be sufficient evidence of the contents of the will.

If there is no copy or completed draft, the evidence of the witness as to the contents of the will may be sufficient, even if that witness has an interest in the will.

Such evidence may include statements made by the testator before or after the execution of the will, evidence that the witness with the will, evidence of codicils to a will that reference to the will in written documents.

Compensation For Executors and Trustees in British Columbia

Compensation For Executors and Trustees in BC

Many issues in estate litigation arise that pertain to the appropriate amount of compensation for executors and trustees.

The first place to start for the answer is the Trustee Act of British Columbia.

If the will or trust stipulates the amount of the executor or trustee’s compensation, then that will generally speaking be upheld by the courts.

The Courts are inclined to follow the stipulated direction of the testator in this regard.

If compensation is not stipulated in the testamentary document, then the maximum entitlement for an executor is 5% of the gross aggregate value of the estate, as compensation for their time spent, care, trouble and duties carried out.

In addition, the Trustee Act also provides for a maximum fee of .4% of the average market value of the assets on a yearly basis, for the care and management of the assets.

In the experience of disinherited.com, the overwhelming number of initial compensation disputes between the beneficiaries and the executor are resolved without access to the courts.

Most beneficiaries will often agree on a reasonable amount of compensation, as they both recognize the effort carried out by the executor,as well as they are very often in a hurry for their inheritance and do not want to further delay the distribution.

When beneficiaries cannot resolve the fee dispute, the court uses the following criteria in determining the amount of executor/trustee compensation, namely:

A. The time occupied;
B. The success achieved in the final results;
C. The amount involved in the estate;
D. The skill and ability displayed and required;
E. The care and responsibility involved

One of the feeding decisions that is often referred to is McColl Estate (1967) 65 WWR 110 BCSC where the aforesaid criteria were set out by the court

The type of criteria that the court will look at is whether on the one hand it was simply a bank account with a large amount of money, that involved very little work, or on the other hand ,a small problematic estate to the point that it was a thankless job.

In the experience of disinherited.com is not usual to be paid the maximum 5% in most estates.

The average instead being more in the range of 2 1/2 to 3%. .

It is in fact surprising that very few of the contested compensation matters actually proceed to court and there is in fact a paucity of caselaw on the topic.

In the experience of disinherited.com carrying out the duties of executor or trustee can often amount to being a fire hydrant on a street of dogs

“Gift” Set Aside – Resulting Trust Imposed on Asset

Gift v Resulting trust

Pan v Pan Estate 2011 BCSC 856 is an excellent example of a court case that deals between the “tug of war” in legal terms  of a gift versus a resulting trust.

In 1994 the plaintiff withdrew $450,000 from her bank in Taiwan and transferred into an account in the name of her husband in Vancouver.Continue reading

Executor/Trustee Personally Liable To Beneficiary For Unauthorized Payments from Estate Assets

Executors and trustees can be personally liable to beneficiaries for improper or unauthorized payments from estate assets.

The Brown v Brown 2011 BCSC 649 is a good example of that principle of law.Continue reading

Presumption of Resulting Trust Rebutted

Presumption of Resulting Trust Rebutted

Gift of House and Bank Accounts to Spouse Upheld as Gifts

In disinherited.com’s last blog, we discussed the Zukanovic v Malkoc case.

There, the court set aside various “gifts” made during the lifetime of the deceased, and found they were held in trust for the estate.

Hamilton v. Jacinto 2011 BCSC 52, although involving different facts altogether, also involved the same legal arguments of one side arguing that the asset was transferred to him or her without consideration, with the intention of gifting that asset, while the opposing party typically arguing that no intention of a gift was shown and that the asset accordingly, is held in trust for the estate.

In this decision, the court held that the transfer of various assets to his 2nd spouse, after the death of his wife of 59 years, was intended by the deceased to be a gift to his new spouse, and that he was competent, and free of undue influence to do so.

In 2003, the plaintiff’s elderly father, a Washington state resident, purchased a house in British Columbia in joint names with the defendant, and opened joint bank accounts with her,using assets of a Washington state trust, of which he was the sole trustee and beneficiary. She contributed no monies to the bank accounts or the house.

After the father’s death in 2004 at age 84, the plaintiff children commenced a court action to set aside the house and bank transactions.

The plaintiffs argued that the defendant held the property in trust for their father’s estate.

The evidence however showed that the father knew what he was doing and acted freely.

The court found that the presumption of resulting trust was rebutted, that there was no undue influence.

Accordingly the action was dismissed in favor of the defendant spouse.

The two contrasting decisions indicate how difficult it can be even for very senior estate specialists such as at disinherited.com, to predict the outcome of such court actions.

The next blog will show how the court penalized the plaintiffs with an award of double costs for failure to accept an offer to settle.

Gifts of Entire Estate During Lifetime Set Aside

Gifts of Entire Estate During Lifetime Set Aside

Will Varied to Give Daughter %25 and Favourite Son, %75 of $ One Million Estate

Zukanovic v Malkoc Estate 2011 BCSC 625 is a case of a father disinheriting a daughter in favor of a son who was clearly his favorite.

The testator suffered from diabetes most of his life which resulted in the amputation of a leg prior to his death.

In 2005 the deceased transferred basically his entire estate of approximately $800,000 to his son.

In 2007 he made a will leaving $1000 to his daughter, the forgiveness of a debt of $40,000 to his daughter, and the residue of his estate to his son.

The estate was only $24,000 at the time of his death.

The daughter commenced a court action alleging that the son held the house and shares that had been transferred prior to the death of her father, in trust for his estate.

The properties had been transferred to the son without any consideration.

She subsequently argued that once the assets formed part of the estate, that the 2007 will should be varied in her favor to provide her with an adequate and just award.

The court held that the son held the entire $1 million assets in trust for his father’s estate.

The court ordered that the properties that had been transferred to the fact form part of the estate of the deceased.

The court varied the will, dividing the estate approximately 75% to the favored son, and 25% to the plaintiff daughter, in recognition of the parties divergent circumstances and the testator’s desire to see that his son maintained the business.

disinherited.com applauds this as a correct decision after the court very sensibly closely examined the circumstances of the transfers, in order to try and determine the true intention of the deceased, when he transferred the properties to his son.

For example, the court asked ” why would the deceased do a will in 2007 giving away his assets, when he had already transferred them in 2005 to his son?”

The son had argued that his father gifted him the properties prior to his death, and that therefore they did not form part of his estate, and belonged absolutely to the son.

The court found that when the deceased transferred the properties to his son, he did not intend to transfer of the beneficial ownership of the assets, and merely only transferred the legal interest of the properties.

Most importantly, the court concluded that despite being the registered owner, the son did not practically speaking, exercise control over the assets until after his father’s death.

The court basically asked the question : “when determining whether there was a gratuitous transfer or not, would the deceased have felt constrained for from asking for the return of the properties back to his name, and if he did, with the son have complied”.

The court concluded that the answer to the 1st question was no, and the answer to the 2nd was yes.

Therefore on the balance of probabilities, the court found that the deceased did not intend that the transfers to put the assets beyond his own reach. He demonstrated this in action and words after the date of the transfers.

Disbarred Lawyer Loses Mother’s BC Estate Case

 Estate of Sophia Ewachniuk v Ewachniuk 2011 BCSC 395 is the fascinating sequel of a disbarred lawyer’s continued litigation with his two sisters.

In a previous trial involving the same parties Hix v Ewachniuk 2008 BCSC 811, affirmed 2010 BCCA 317,the court found that the deceased’s 2000 will was prepared by the defendant lawyer son.

The will purportedly left her entire $2 million estate to her lawyer son.

The court declared that will void, stating it was procured by his undue influence.

This subsequent litigation had to do with the estate suing the defendant son for repayment of a promissory note signed by the defendant, in favour of his parents in 1980, for $750,000.

The promissory note did not contain a date for repayment, but indicated that it was payable one year after demand, without interest.

The estate administrator issued a letter of demand to the defendant after their mother’s death in 2008.

The defendant argued that he owed nothing.

The court held that it was the defendant’s burden to prove that the intention of the parties was not to make the promissory note enforceable against him.

The court held that the promissory note is that delayed- demand promissory note that is not statute barred by far the Limitation act, which provides for an ultimate limitation period of 30 years.

The court recited the principle in Miller v. Miller Estate (1987) 14 BCLR (2d) 42 “the court should require a high standard of proof from a person who claims he is owed money by the deceased person, applies to a claim by a deceased person as represented by her estate for money owed to the estate.”

“The evidence of the payment in these types of situation should examined with the most careful scrutiny and indeed at the outset with some suspicion”

The court ordered the defendant son to pay the estate $750,000 plus costs

Court Removes One Co-Executor in Deadlock Between Two

Mr. Justice Butler in Levi-Bandel v. Talesiesin Estate 2011 BCSC 247 ordered the removal one of two co-executor/trustees, where a deadlock had existed between them.

The administration of the estate had ground to a standstill for the previous two years.Continue reading