Don’t Bank On an Inheritance

Very nice, how much

Do not expect to receive an inheritance is the advice of most financial planners, as well as my own.

In the early 1990’2 I read a survey taken by the Vancouver Sun stating that 1/3 of BC residents expect to be disinherited. In my many years of handling estate disputes, I would estimate that this figure is largely accurate, and perhaps even on the low side, given the complexities of today’s families and extended families.

The following is reprinted from the National Post article October 27,2013:

We’ve become a nation of waiters. Not the type ready to serve you lunch but serious spenders bank on an inheritance to get us out of our financial jams.

Wills and estate lawyer Les Kotzer says “waiter” is the perfect term to describe the growing clientele streaming into his office in Thornhill, a wealthy suburb north of Toronto.

“I’m starting to hear about a lot of people who are depending on this mattress of their parents to fall back on,” said Mr. Kotzer, of Fish & Associates, who tells the story of seemingly wealthy clients who showed up his door and hopped out of an expensive sports car. “They’re flashing Rolex watches, diamond bracelets. I ask them where they live, it’s in an expensive area. I ask him ‘what do you do’. He’s not working. She’s a substitute school teacher.”

None of it makes sense. It turns out their home has a huge mortgage, the cars are leased and the couple are basically broke, deep in debt. Mr. Kotzer can’t figure out how these people will survive.

“Finally the wife jumps in and says ‘Harry won’t tell you anything about what he does, he’s a waiter.’ I said ‘what restaurant’ and she tells me ‘not that kind of waiter. He’s waiting for our inheritance. Once he gets it, we’ll pay off all our bills,’” said Mr. Kotzer, recalling the man’s mother was 93.

The long-held view that Baby Boomers are about to hit the jackpot is backed up by a now often-quoted study by Decima Research in 2006 that found about $1-trillion was expected to be passed on to the next generation over 20 years.

It’s unclear how much of that money has passed on since that study was done but anecdotal evidence suggests it has already found its way into the hands of some in the next generation — with realtors even suggesting it is behind the never-ending Canadian housing boom.

The inheritance theme is not one that appears to be disappearing. An HSBC Bank report released in September, 2013, found 39% of working people bank on an inheritance with the median value expected to be $77,213.

They’ll probably get their money because the same survey found 57% of fully retired people plan to leave some sort of inheritance with a median value of $175,541 given. Some of the gap between what people plan to leave and what they expect to receive might be explained by taxes that will be owed.

Another trend, clearly gaining steam, although it is hard to quantify, finds many Canadians giving away their fortune to the children in their lifetime, rather than waiting to die.

Children “Adopted Out” Cannot Inherit From The Natural Parent

 

The BC Court of Appeal decision of Clayton v Markolefas 2002 BCCA 435 stands for the proposition that a natural child of the testator, who has been adopted by another parent, is NOT entitled to inherit from the estate of his intestate natural parent.

Nor can he be eligible for a claim under the Wills Variation act provisions of what is now incorporated into WESA

[1] The petitioner appeals from a decision of Chief Justice Brenner dismissing, on a case stated under Rule 34, her petition claiming a share in the distribution of an intestate estate under s.84 of the Estate Administration Act, R.S.B.C., 1996:

If an intestate dies leaving issue, subject to the rights of the spouse, if any, the person’s estate must be distributed per stirpes among the issue.

Section 81 provides:

“issue” includes all lineal descendants of the ancestor.

The petition was dismissed on the ground that she is, as a matter of law, precluded from sharing in the estate.

[2] The petitioner claims to be “issue” of the intestate. For the purpose of stating a case, the parties have agreed that the intestate was her natural or birth father but that, in 1968, she was adopted by persons unrelated to her birth parents. The point of law raised by the stated case is:

Does the fact that the Petitioner was adopted in 1968 pursuant to the Adoption Act, RSBC 1960, c4, preclude or bar the Petitioner from claiming or sharing in the estate of Andre Markolefas, deceased, her natural father, who died intestate in 1998.

[3] The Adoption Act of 1960 became, in the 1979 revision, R.S.B.C. 1979, c. 4. There was no material change in the Adoption Act from 1960 until the 1979 Act was repealed and replaced by the Adoption Act, R.S.B.C. 1996, c. 5. It was settled law until 1996 that an adopted child was not “issue” of his or her natural parents for the purpose of intestate succession. The sole question is whether the 1996 amendment leads to a different result. The relevant provisions of the Estate Administration Act were in effect during the whole of the period from 1960 to 1996. There were no amendments to those sections in that period.

[4] The earliest case holding that there are no rights of intestate succession between an adopted child and his or her birth parent was Re Jensen (1964), 47 D.L.R. (2d) 630 (B.C.S.C.), a decision of Mr. Justice Branca. The reasoning in that case was approved and applied by this Court in Mernickle v. Westaway (1986), 1 B.C.L.R. (2d) 267. Those authorities rested entirely upon the effect of these provisions of the former Act:

11. (1) For all purposes an adopted child becomes on adoption the child of the adopting parent, and the adopting parent becomes the parent of the child, as if the child had been born to that parent in lawful wedlock.

(2) For all purposes an adopted child ceases on adoption to be the child of his existing parents (whether his natural parents or his adopting parents under a previous adoption), and the existing parents of the adopted child cease to be his parents.

(3) The relationship to one another of all persons (whether the adopted person, the adopting parents, the natural parents, or any other persons) shall be determined in accordance with subsections (1) and (2).

[5] The reasoning underlying the conclusion that an adopted child had no rights of intestate succession against a natural parent was stated thus by Seaton J.A. for the court. After quoting the three subsections quoted, supra, he said:

In my view, when subs. (2) says that an adopted child ceases on adoption to be the child of his existing parents, it uses the word “child” broadly. I do not think that one who is not the child of a person can be the issue of that person within the Estate Administration Act. I am influenced, too, in that interpretation by the introductory words “for all purposes”. They are broad. The thrust of these provisions is to move the child from one family to another family and make it a child of the new family and no longer a child of the old family.

The 1996 amendment of the Act was very extensive. In the present s. 37, which replaces s. 11 of the former Act, nothing remains of the language of s. 11(2) upon which the decision in Mernickle was primarily based. Nor do the words “for all purposes”, which supported the conclusion in Mernickle, appear.

[6] That being so, the Mernickle line of cases cannot be regarded as binding authority with respect to the question which has arisen between the parties. It must be decided upon the wording of the present Act and, in particular, s.37 which, like the former s.11, deals with the effect of an adoption order. Section 37 reads:

37 (1) When an adoption order is made,

(a) the child becomes the child of the adoptive parent,

(b) the adoptive parent becomes the parent of the child, and

(c) the birth parents cease to have any parental rights or obligations with respect to the child, except a birth parent who remains under subsection (2) a parent jointly with the adoptive parent.

(2) If the application for the adoption order was made by an adult to become a parent jointly with a birth parent of the child, then, for all purposes when the adoption order is made,

(a) the adult joins the birth parent as parent of the child, and

(b) the child’s other birth parent ceases to have any parental rights or obligations with respect to the child.

(3) If a child is adopted for a second or subsequent time, the adoption order has the same effect on the child, on the new adoptive parent and on the former adoptive parent as it does on the child, on the adoptive parent and on the birth parents or parent under subsections (1) and (2).

(4) Subsections (1) to (3) do not apply for the purposes of the laws relating to incest and the prohibited degrees of marriage.

(5) The family relationships of one person to another are to be determined in accordance with this section, unless this or another enactment specifically otherwise provides or distinguishes between persons related by birth and persons related by adoption.

(6) An adoption order does not affect an interest in property or a right of the adopted child that vested in the child before the date of the adoption order.

 

(7) An adoption order does not affect any aboriginal rights the child has.

It will be seen that s. 37(1) retains the concept that upon the making of the adoption order the child becomes the child of the adoptive parent and the adoptive parent becomes the parent of that child. It goes on to provide, subject to an exception which has no application here, that the birth parents cease to have any parental rights or obligations with respect to the child.

[7] Section 37(1)(c) is, in my view, all-important in relation to the present issue. Because the birth parents ceases to have any parental rights or obligations, it must follow that the child ceases to have any rights against the birth parents other than those defined in s. 37(6), i.e., rights which vested in the child before the date of the adoption order. The existence of s. 37(6) is inconsistent with a legislative intention to allow other rights of the child against the birth parent to survive the adoption order.

[8] Section 37(6) of the new Act, which provides that the family relationships of one person to another are to be determined in accordance with s.37, also has a clear bearing on the present issue. The question whether a person is “issue” of another person is a matter of family relationships. The clear effect of s.37(1) is that the adoptive child becomes the child of the adoptive parent. From that it follows that all parental obligations fall upon the adoptive parents. It can therefore be said of the present provisions, as Seaton J.A. said of s. 11 of the former Act:

The thrust of these provisions is to move the child from one family to another family and make it a child of the new family and no longer a child of the old family.

.

[11] The 1996 Act has effected many modifications of the law relating to adoption. Perhaps most importantly, it has modified the policy which underlay the previous Act which went so far in attempting to abolish any relationship or link between the birth parents and birth child that the child might never know that he or she was not related by blood to the adopting parents. The present Act, by such means as creating a birth father’s registry (s. 10) and making provision for openness and disclosure (Part 5), recognizes genetic reality and the human desire to know, for better or worse, to whom one is related by blood. But in respect of legal rights and obligations, the fundamental premise remains the same. For those purposes, the adoptive parents are the parents and the adopted child is their issue.

[12] Having reached that conclusion, I find it unnecessary to consider the policy considerations which were touched upon by the Chief Justice and which were strongly emphasized by Mr. Di Bella in pointing out the undesirable consequences which could flow from granting to adopted children a right of succession against their birth parents. As to that, I will say only that those matters would justify serious consideration were such a radical change in the law to be considered.

[13] I would dismiss the appeal.

“THE HONOURABLE MR. JUSTICE ESSON”

Drafting Lawyers Evidence Rejected: Not Credible or Reliable

Drafting Lawyers Evidence Rejected -Not Credible or Reliable

Sawdon Estate v Watch Tower Bible & Tract Society of Canada 2012 ONSC 4042 involves a case where there was a dispute as to whether seven joint bank accounts with two of the deceased five adult children, went to the five children equally as per their evidence, or alternatively the million-dollar estate went to his estate, 75% of which was left to the defendant church.

The court examines the usual criteria in such resulting trust versus gift cases, as per the guidelines of the leading case of Pecore v Pecore 2007 SCC 17.

What was more remarkable about the reasons for judgment in the opinion of disinherited.com were the three pages of scathing comments made about the drafting lawyer of the will, whose evidence the court found to be neither credible, nor reliable, and biased.

Amongst other things the lawyer did not disclose a conflict ridden a potential conflict to the deceased that he was an elder with the Jehovah Witness Church and his subsequent evidence and behavior.

[51] With respect to the evidence of Mr. Pole, I reject it entirely. There are a number of reasons I have concluded his evidence is neither credible nor reliable:

Mr. Pole is a lawyer. I find it surprising and questionable that Mr. Pole would not disclose a conflict or even a potential conflict that he was an “elder” or “lay minister” with the Jehovah’s Witness church and had acted for the Jehovah’s Witness church prior to the preparation of the 2004 Will or the July 2006 Will or the Transfer and Assignment. Mr. Pole’s reason for not doing so – because he wasn’t wearing his Jehovah’s Witness “hat” at the time – is simply not a good answer. Arthur Sawdon and the other shareholders of Sawdon Holdings were entitled to know all of Mr. Pole’s “hats” when Mr. Pole provided advice or prepared documents for Arthur Sawdon;

Mr. Pole’s answers in cross-examination by the Estate Trustee’s counsel were combative and he took every opportunity, whether or not relevant or appropriate to the question asked, to give answers favourable to Watch Tower; some of Mr. Pole’s answers made little sense. For example, Mr. Pole’s evidence as to knowing Arthur Sawdon’s intention regarding the Joint Bank Accounts after his death make no sense when Mr. Pole didn’t know the joint nature of the bank accounts until after Arthur Sawdon’s death. Daniel Pole’s evidence was inconsistent with his earlier evidence that he had told Arthur Sawdon, if he set up joint accounts without a Declaration of Trust, the monies would go to the joint account holders on his death. Even more inconsistent was that two weeks after Arthur Sawdon signed the July 2006 Will, Arthur Sawdon opened up two new joint accounts with his sons with a right
of survivorship. Notwithstanding, Mr. Pole was adamant that it was Arthur Sawdon’s intention that the monies in the Joint Bank Accounts were to go to the estate;

Mr. Pole’s actions subsequent to the death of Arthur Sawdon are demonstrative of a appearance of bias in favour of the Watch Tower:

i. Mr. Pole advised Arthur Sawdon that the Transfer and Assignment had not been accepted by the Trust Administrator and that the Watch Tower would receive the shares as the residual beneficiary under the July 2006 Will. The Transfer and Assignment apparently was a moot issue. However, upon Arthur Sawdon’s death, Mr. Pole’s actions in his attempts and threatens to get an immediate transfer of the shares of Sawdon Holdings to the Watch Tower, not as a residual beneficiary but as an inter vivos gift, gives the appearance of bias in favour of the Watch Tower. Mr. Pole’s explanation that he did this to avoid estate fees was not a credible explanation;

ii. Despite instructions by Wayne Sawdon, the executor under Arthur Sawdon’s July 2006 Will, not to advise the Watch Tower about the Watch Tower’s potential entitlement under the Will, Mr. Pole nevertheless communicated the information to the Watch Tower; and

iii. Mr. Pole’s attempts to get the Trust Administrator to immediately effect the Transfer and Assignment from Arthur Sawdon to Watch Tower, without authorization from potentially interested parties, are also evidence of apparent bias in favour of the Watch Tower. I reject Mr. Pole’s explanations as to his authority to pursue the transfer to the Watch Tower as his explanations are wrong in law and appear to be an effort to justify taking his actions

Authority under the Charities Accounting Act. R.S.O. 1990, c.C.10, as amended – There was no legal obligation on Mr. Pole, under the Charities Accounting Act, to advise the Trust Administrator as no property intended for a charity vested in him;

Authority under the Power of Attorney

The Power of Attorney, given by Arthur Sawdon, even if relevant, had expired upon the death of Arthur Sawdon; and

As solicitor for or director of Sawdon Holdings -Mr. Pole had not received any instructions from Sawdon Holdings or its board of directors or its officers to demand the transfer to the Watch Tower. There is no reason that Mr. Pole would have written the letter without the prior knowledge of Wayne Sawdon, the only other director of Sawdon Holdings, a beneficial shareholder of Sawdon Holdings and an officer of Sawdon Holdings. Further, there no reason that Mr. Pole would have made the demands without the prior knowledge and approval of Wayne Sawdon, the executor under the July 2006 Will, a beneficiary under the July 2006 Will and someone who might object to the transfer of the shares to the Watch Tower

The Equitable and Discretionary Remedy of Rectification

Rectification: The Governing Legal Principles

The Ontario case of Kanji v Canada Attorney General 2013 ONSC 781 provides a good review of the law of rectification of a mistake.

A taxpayer attempted unsuccessfully to rectify a trust that was going to incur a great deal of taxation.

16 Let me start by considering the law concerning rectification in the case of a contract which results from negotiations between two arm’s-length parties. Rectification is an equitable remedy. As described by Binnie J in Sylvan Lake Golf& Tennis Club Ltd. v. Performance Industries Ltd: 209 DLR (4th) 318 SCC

The traditional rule was to permit rectification only for mutual mistake, but rectification is now available for unilateral mistake (as here), provided certain demanding preconditions are met. Insofar as they are relevant to this appeal, these preconditions can be summarized as follows. Rectification is predicated on the exist­ence of a prior oral contract whose terms are definite and ascertainable. The plaintiff must establish that the terms agreed to orally were not written down properly. The error may be fraudulent, or it may be innocent. What is essential is that at the time of execution of the written document the defendant knew or ought to have known of the error and the plaintiff did not. Moreover, the attempt of the defendant to rely on the erro­neous written document must amount to “fraud or the equivalent of fraud”. The court’s task in a rectification case is corrective, not speculative. It is to restore the parties to their original bargain, not to rectify a be­latedly recognized error of judgment by one party or the other (citations omitted)… In Hart, supra, at p. 630, Duff J. (as he then was) stressed that “[t]he power of rectification must be used with great caution”. Apart from everything else, a relaxed approach to rectification as a substitute for due diligence at the time a docu­ment is signed would undermine the confidence of the commercial world in written contracts.[FN9]

17 The person seeking rectification bears the onus of satisfying the court that the request to rectify merelywould align the document with the true intentions underlying it and that the aspects sought to be rectified are mistakes which obstruct the true intentions which drove the document’s formation.[FN10] Although over the years some cases have held that a person seeking rectification must make out its case on a clear and convincing standard, in C. (R.) v. McDougall the Supreme Court of Canada held that in civil cases only one standard of proof exists at common law — proof on a balance of probabilities.[FNl 1] Of course, judges must remain mind­ful of inherent probabilities or improbabilities.[FN12] In this regard, the comments of Brightman LJ. in Thomas Bates & Son Ltd. v. Wyndham’s (Lingerie) Ltd. are apposite:
The standard of proof required in an action of rectification to establish the common intention of the parties is, in my view, the civil standard of balance of probability. But as the alleged common intention ex hypo-thesi contradicts the written instrument, convincing proof is required in order to counteract the cogent evid­ence of the parties’ intention displayed by the instrument itself. It is not, I think, the standard of proof which is high, so differing from the normal civil standard, but the evidential requirement needed to counteract the inherent probability that the written instrument truly represents the parties’ intention because it is a docu­ment signed by the parties.[FN13]

Rectification of a mistake is a discretionary remedy which should be cautiously watched and guarded, [FN 14] especially in the case of a voluntary settlement. [FN 15]

Wrongly Described Bequests

no longer existsIf  the court comes to the conclusion that the testator intended to pass a bequest, and can determine what that something is, then the fact that the testator wrongly described the bequest  in his or her  will, does not prevent the will taking effect in regard to the subject matter intended by the testator.

The principle may be applied in whatever part of the description the error occurred

 

 

Baxevandis Estate case( 2007 BCSC 1657) in its entirety as it is a good summary of the topic of abatement, and specifically the issue of where a specific gift abates and is sold and there is a surplus of funds after the liabilities are paid, who is entitled to the surplus?

 

The case also discusses the difference when a gift is said to abate as opposed to the gift having adeemed, when in both cases, the gift no longer exists at the time of death.

Any property which has to be sold to satisfy creditors is said to abate, rather than to adeem.

The court held that the balance of the proceeds from the sale of abated property goes to the divisee of the abated property, and not into the residue.

 

Background

[1] The deceased, Grammata Margaret Baxevanidis, died on May 24, 2004 (the “Deceased”).

[2] The Deceased left a will dated June 25, 2002 (the “Will”), which was granted probate on October 28, 2004.

[3] During her lifetime, the Deceased had two main assets: the home she lived at in Vancouver, British Columbia (the “Home”) and the home she owned in Vancouver, British Columbia that was rented to various tenants (the “Rental Property”).

[4] The Deceased’s daughter, Agapie Kennell, (the “Daughter”), had lived with the Deceased in the Home until the Daughter was 40 years old, during which time she provided the Deceased with care and companionship. Because of this, the Deceased promised the Daughter to gift to her the Home.

[5] However, during her lifetime, the Deceased transferred the Home to her son, Athanasios Dennis Baxevanidis, also known as Dennis Baxevanidis (the “Son”). The Deceased then promised her Daughter that the Rental Property would be given to her in the Deceased’s Will instead.

[6] In her Will, the Deceased gifted the Rental Property to the Daughter and directed that the remainder of her assets be divided equally between the Son and the Daughter.

[7] At the time of death, the Deceased’s estate consisted of the Rental Property, a real property located in Point Roberts (the “Point Roberts Property”), various bank accounts, a Registered Retirement Income Fund (“RRIF”), and a Canada Death Benefit.

[10] The petitioner, Jimmy Malamas, is the executor of the Deceased’s Will (the “Executor”).

[11] On May 7, 2007, the Canada Revenue Agency reassessed the Deceased’s income tax return concluding that a further $71,122.47, plus interest, was owed by the estate.

[12] The exact amount of the estate’s debts is still unknown. However, it is likely that the estate’s assets (not including the Rental Property) are insufficient to satisfy the whole debt.

[13] The Daughter has agreed to either loan or gift the appropriate sum to the estate to ensure that the Rental Property does not have to be sold in order to pay the estate’s debts. She has paid $74,000.00 into her lawyer’s trust account for this purpose.

Abatement

II. The Executor seeks advice and directions from the court, under s. 86 of the Trustee Act, R.S.B.C. 1996, c. 464, as to the following questions:

(i) If the Rental Property must be sold to satisfy debts of the estate, do the net proceeds of that sale fall into the general residue of the estate to be split equally between the Son and the Daughter?

(ii) If the answer is yes, can the Executor transfer the Rental Property to the Daughter subject to a charge with respect to the outstanding debts of the estate, pursuant to s. 79 of the Estate Administration Act, R.S.B.C. 1996, c. 122, without any regard to the Son’s possible interest?

(iii) Can the Daughter pay the estate debts herself, without a sale of the Rental Property and maintain the specific gift of the Rental Property to her?

(iv) Can the Executor borrow funds from the Daughter or anyone else, secured by way of a mortgage on the Rental Property, to pay the estate debts, pursuant to s. 67 of the Estate Administration Act?

III. Decision

(i) If the Rental Property is sold, do the proceeds convert to the estate’s residue?

[14] According to James MacKenzie, ed., Feeney’s Canadian Law of Wills, 4thed. (Toronto: Butterworths, 2000) at para. 15.3:

An estate may be legally unable to satisfy a legacy or devise not only because the property has ceased to exist or has ceased to exist in substantially the same state (not only that is, by reason of an ademption by conversion), but also because of the testator’s debts which must be satisfied out of the estate property. However, this latter situation is technically referred to as an abatement. Any property which has to be sold to satisfy creditors is said to abate, rather than to adeem. [emphasis mine]

[15] In Thompson (Guardian ad Litem of) v. Thompson Estate, 2005 BCSC 1814, 22 E.T.R. (3d) 268, Melnick J. at para. 15 described the law, as follows:

Unless there is a contrary intention in the Will, “the order in which assets are liable to pay debts is determined by well defined rules” (A.H. Oosterhoff,Oosterhoff on Wills and Succession, 5thed. (Scarborough: Carswell, 2001) at 499). The rules are described in James Mackenzie, Feeney’s Canadian Law of Wills, 4thed. looseleaf, (Markham: Butterworths, 2000) at para. 8.52:

In the payment of debts the residuary estate must first be exhausted and residuary personalty and realty are liable rateably for the debts. After the residuary estate has been exhausted, general legacies abate pro rata, then demonstrative and specific rateably after that, and finally devises. Devises abate last because of the general rule that personalty is primarily liable for the payment of debts.

[16] At para. 16 in Thompson, supra, Melnick J., quoting from Smith Estate, Re, 2003 SKQB 361, [2004] 7 W.W.R. 516, set out the order of abatement, as follows:

First, residuary personalty;

Second, residuary real property;

Third, general legacies, which include pecuniary bequests from the residue;

Fourth, demonstrative legacies, that is bequests from the proceeds of a specific asset or fund not forming part of the residue; [See Re Culbertson (1967), 62 D.L.R. (2d) 134 (Sask. C.A.)]

Fifth, specific bequests of personalty;

Sixth, specific devises of real property.

[17] The types of legacies have been described in Feeney’s Canadian Law of Wills, supra at para. 8.51, as follows:

A general legacy is a gift out of the residuary estate after the payment of debts and specific legacies. The most usual kind of a general legacy is a pecuniary legacy. A specific legacy is one which the testator has separated from the residuary estate in favour of a particular legatee and since the testator has shown that he or she intends that the legatee shall take the specific thing unconditionally, while it may have to be sold to pay debts, it will not abate to meet debts until the residuary estate and general legacies have been exhausted.

[18] In Thompson, supra, a number of real estate lots (Lot 1, 2, and 3) formed the largest part of the deceased’s estate along with a truck, a boat, and the contents of some bank accounts. There were three beneficiaries under the will, namely the wife, and two of the deceased’s daughters. The will provided that Lot 1 was to go to the wife, while Lots 2 and 3 were to be sold and the proceeds divided more or less equally amongst the three beneficiaries.

[19] As of the date of the hearing, legal title of Lot 1 remained with the executor for the estate, while both Lots 2 and 3 were sold in accordance with the deceased’s wishes. The estate owed significant debts. A large portion of the proceeds of the sale of Lots 2 and 3 and various other funds received after the deceased’s death had been used to pay the debts of the estate. However, after the debts were satisfied, there remained some cash.

[20] The court held that as there was not enough money in the estate to pay all the gifts made in the will, some or all of the gifts had to abate and be reduced pro rata. At issue was the order in which the assets of the estate were liable to pay its debts.

[21] The court found that the contents of the bank accounts formed the residue of the estate and were first liable for the debts of the estate (even though the will contained no residuary clause, which meant that the residue would pass according to the law of intestate succession). The truck and boat were both gifted to the wife as general legacies and were liable to pay the debts of the estate after the residue was abated, but prior to Lots 1, 2 and 3. The court found that the gift to the wife of Lot 1 was clearly a devise of real property and it was therefore last in line for liability for the estate’s debts. What cash remained in the estate after payment of the debts was solely attributed to the sale of Lots 2 and 3. The court held that the remaining cash did not fall into residue, but was to be divided equally by the three beneficiaries in accordance with the will.

[22] Thus, even though the legacies of Lots 2 and 3 abated, the remainder of the proceeds from the sale of these lots did not fall into residue.

[23] In Patry Estate v. Robinson, 2003 ABQB 707, [2004] 2 W.W.R. 378, the testator left a vehicle to his common law wife, “free of all encumbrance”. The residue of his estate was to be shared equally by his three children. At the time of his death, the vehicle was valued between $24,500.00 and $26,000.00. However, the outstanding loan on the vehicle was $29,000.00. The executrix returned the vehicle to the car dealership and they extinguished the loan. There was only $13,316.26 left in the estate after payment of estate taxes and other debts.

[24] Coutu J., at para. 12, relying on Feeney’s Canadian Law of Wills, supra,found that because the vehicle was a specific bequest, it did not abate until the residuary estate and general demonstrative legacies had first been exhausted. Therefore, the court found that the estate’s residue was subject to abatement before the gift of the vehicle. This meant that the wife’s claim as specific legatee took priority to the claims of the children as residual beneficiaries. The wife was entitled to the $13,316.26 left in the estate.

[25] The court ruled that even though the vehicle, as a specific bequest, had to be sold to satisfy the estate’s debts, the gift itself did not fail nor did the proceeds of sale fall into the estate’s residue.

[26] Tamboline v. Dobbs(1998), 25 E.T.R. (2d) 50 (B.C.S.C.) is a Wills Variation Act action, which also required the court to consider the issue of abatement and the estate’s tax liability.

[27] The testator’s daughter was named beneficiary of certain property and claimed that tax liability relating to disposition of property should be borne by the estate. The testator had also left a number of specific bequests including real property as well as stocks, bonds and jewellery. In addition, the residue was to be divided equally amongst two of the testator’s three children. The estate’s debts exceeded the value of the property that was left as residue.

[28] Pitfield J. found at para. 59 that “income tax obligations arising as a consequence of death are legally enforceable debts to be discharged by the executor. In the absence of any specific direction in the will, there is no reason to conclude that the tax burden should fall upon any asset, not in residue, to the exclusion of any other.”

[29] Pitfield J. also found that after the residue was exhausted to pay the estate’s debts, the specific bequests of land, jewellery, shares, etc. were to bear their “rateable proportion of all debts of the estate” payable as a consequence of death, including taxes, interest and penalties but excluding mortgages.

[30] In the case at bar, clause 3(a) of the Will states, as follows:

I GIVE, DEVISE AND BEQUEATH all my property of every nature and kind and wheresoever situate, including any property over which I may have a general power of appointment to my Trustees upon the following trusts:

(a) To pay out of and charge to the capital of my general estate my just debts, funeral and testamentary expenses and all estate, inheritance, succession, probate and other taxes, duties and fees whether imposed by or pursuant to the law of this or any other jurisdiction whatsoever, that may be leviable or payable in connection with any property passing … Without imposing any obligation upon my Trustees to do so I hereby AUTHORIZE them to pay out of and charge to the capital of my general estate any and all tax on capital gains which may be deemed to arise on my death or on any subsequent disposition of assets which may be made or deemed to be made by my Trustees during their administration of my estate.

[emphasis added]

[31] Applying the above noted law to the facts in this application, the Point Roberts Property, the various bank accounts, the RRIF, and the Canada Death Benefit form the residue of the Deceased’s estate, while the Rental Property is properly described as a specific devise of real property.

[32] Further, the income tax payable by the estate to the Canada Revenue Agency is an obligation arising as a consequence of the Deceased’s death and is thus a legally enforceable debt to be discharged by the Executor.

[33] There is no specific direction in the Will that the estate’s income tax or other debt attach specifically to the Rental Property, and thus, must be paid out in accordance with the rules described in Thompson, supra.

[34] The Rental Property, as a specific devise of real property, is last in line for liability of the estate’s debts.

[35] Thus, the estate’s debts must be satisfied by exhausting the assets contained in the residue first, and only then would the gift of the Rental Property abate.

[36] Accordingly, I find that if the Rental Property must be sold to satisfy the debts of the estate, the net proceeds do not fall into the residue of the estate, but must be transferred to the Daughter.

[37] Given my answer to the first question, it is not necessary to answer question (ii).

(iii) Can the Daughter pay the estate debts herself, without a sale of the Rental Property and maintain the specific gift of the Rental Property to her?

[38] In Holmes Estate (Re), 2007 BCSC 51, 29 E.T.R. (3d) 67 at para. 6, Goepel J. states, as follows:

The primary objective for the court in interpreting a will is to determine the testator’s intention. The will must be considered in its entirety. If there is no ambiguity on the face of the will then it should be interpreted according to the ordinary meaning attributed to the words used. Only if there is an ambiguity should the court resort to evidence of surrounding circumstances. In the leading case of Perrin v. Morgan, [1943] A.C. 399 (H.L.) the court stated at p. 406:

[T]he fundamental rule in construing the language of the will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case – what are the “expressed intentions” of the testator.

In Davis Estate v. Thomas (1990) 40 E.T.R. 107 (B.C.C.A.) the court adopted the words of Mr. Justice Laidlaw in Re Burke (1959), 20 D.L.R. (2d) 396 at 398 (Ont. C.A.) at p. 110 as follows:

The Court is now called upon to construct a particular document and at the outset, I emphasize what has been said before so frequently. The construction by the Court of other documents and decisions in other cases respecting the intention of other testators affords no assistance whatsoever to the Court in forming an opinion as to the intention of the testator in the particular case now under consideration. Other cases are helpful only insofar as they set forth or explain any applicable rule of construction or principle of law. Each Judge must endeavour to place himself in the position of the testator at the time when the last will and testament was made. He should concentrate his thoughts on the circumstances which then existed and might reasonably be expected to influence the testator in the disposition of his property. He must give due weight to those circumstances in so far as they bear on the intention of the testator. He should then study the whole of the contents of the will and, after full consideration of all of the provisions and language used therein, try to find what intention was in the mind of the testator. Where an opinion has been formed as to that intention, the Court should strive to give effect to it and should do so unless there is some rule or principle of law that prohibits it from doing so.

[39] In the instant case, clause 7(ii) of the Will provides, as follows:

7. IN ORDER THAT my wishes may be more effectively carried out I hereby give my Trustees the following additional powers:

(ii) To compromise, settle and waive any claim or claims at any time due to or due by my said Estate for such consideration and upon such terms and conditions as my Trustees may deem advisable. [emphasis mine]

[40] On my interpretation of the Will, I find that clause 7(ii) contains a broad power to the Executor to accept funds from the Daughter to preserve the promise the Deceased made to the Daughter during her lifetime so that the Daughter can receive her bequest of the Rental Property.

[41] Given the answer to question (iii), I do not find it necessary to answer question (iv).

IV. Conclusion

1. The answer to question (i) is no.

2. The answer to question (iii) is yes.

Early Vesting v Contingent Gifts

Early vestingIn order to determine the date at which the recipients of the interest are determined, it is necessary to determine whether the gift was vested or contingent

A contingent interest is one that is subject to the happening of an event that may never occur.

A vested interest, on the other hand, is one the enjoyment of which is merely postponed, though it may be subject to subsequent divestment: see James MacKenzie, Feeney’s Canadian Law of Wills, 4th ed, looseleaf (Markham, Ontario: Butterworths, 2000-) at para. 17.2.

In other words, if the gift is subject to a condition precedent, then it is contingent; if it is subject to a condition subsequent (which will cause the interest to be divested if the condition is met), then it is vested subject to divestment. In this case, if the gift was contingent, the recipients would be determined as of the date the contingencies were satisfied. If it was vested, the recipients would be determined as of the date of the testator’s death.

A condition precedent establishing a contingent interest does not necessarily have to be personal to the donee; it can be a condition that some other person do some act or some other donee survive to a certain time: see Feeney’s Canadian Law of Wills at para. 17.6.

Usually, where the gift is contingent, the words of the condition precedent will be introduced by the word “if”: McKeen Estate v. McKeen Estate (1993), 132 N.B.R. (2d) 181, 49 E.T.R. 54 (Q.B.).

Where there is a gift-over in the event of death coupled with a contingency, such as “in the event of A’s dying without issue”, the gift-over will take effect when A dies and the contingency is satisfied:

Fraser v. Fraser (1896), 26 S.C.R. 316; Re Hildreth (1923), 54 O.L.R. 139 (C.A.); see also Re Fairfoull (1973), 41 D.L.R. (3d) 152 (B.C.S.C.), aff’d on reconsideration [1974] 6 W.W.R. 471, 18 R.F.L. 165 (B.C.S.C.).

The presumption of early vesting is that, wherever the words used in a will permit a construction that results in early vesting, the gift will be vested rather than contingent: Hamilton v. Hart (1919), 27 B.C.R. 101, 47 D.L.R. 231 (C.A.); Re Taylor, [1972] 3 O.R. 349, 28 D.L.R. (3d) 257 (H.C.J.).

Consistent with this presumption, where there is doubt as to whether a condition is intended to be a condition precedent or a condition subsequent, the court should prima facie treat it as a condition subsequent: Sifton v. Sifton, [1938] A.C. 656, [1938] 3 D.L.R. 577 (P.C.).

However, the presumption only applies where the court has some doubt as to the testator’s intention: Re Fraser (1986), 55 O.R. (2d) 268, 29 D.L.R. (4th) 88 (H.C.J.); Henderson v. Henderson Estate (1990), 73 O.R. (2d) 616, 38 E.T.R. 120 (Ont. H.C.).

The rule in Browne v. Moody states that a gift of the remainder will be treated as vested if (a) it is postponed in the will solely for the convenience of the testator’s estate or (b) it is postponed by the creation of some prior interest, such as a life estate: see Re Thompson, [1974] 1 W.W.R. 289, 41 D.L.R. (3d) 305 (B.C.S.C.) and Re Ross (1984), 6 D.L.R. (4th) 193 (B.C.S.C.).

Wills Variation -Abandoned Infant

abandoned childMcMain v Leblanc 2013 BCSC 891 involves a fact pattern that is all too frequent in wills variation cases-the abandoned infant  who subsequently finds himself or herself disinherited from the absconding parent, often under the pretext of lack of contact, or even estrangement, but rarely the deserter parent.

In 1969 the testator separated from his wife and two-year-old son, the plaintiff when they resided in England. The testator moved to Canada in 1972 and thereafter paid no child support whatsoever and had almost no contact at all with his son.

In fact he and his wife had initially fought over custody of the plaintiff, and the mother was granted same.

No one heard from him for some years until he showed up unannounced in 1975 asking to see the plaintiff. After that brief visit he was again not hurting again for another seven years when he once again turned up unexpectedly and had two brief visits. He then phoned again in 1989. The plaintiff contacted the testator by phone from time to time but the testator expressed no interest in seeing him.

 

The testator died in 2011 and the plaintiff only heard of his father’s death when he received a copy of his father’s 2005 will, which excluded the plaintiff on the following basis:

“I have had limited contact and have not seen him in over 20 years”

The estate consisted of $330,000 cash and was left solely to the testator’s niece. In addition the niece had received an RRSP of approximately $121,000 net of taxes, outside of the estate.

The court ordered the son $180,000 out of the estate holding that the testator could not justify avoiding his moral obligations to his only child in death, by resorting to his indifference to his parental responsibilities in life. The plaintiff had a strong moral claim to a share of his father’s estate.

 

The court had the following legal reasoning and comments :

In the  wills variation case of Graham v. Chalmers, 2010 BCCA 13, Kirkpatrick J.A. referred to the leading authority interpreting the Act, Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (S.C.C.), and said at paras. 29 and 30:

[29] Tataryn is the leading decision in this area of the law. McLachlin J. (as she then was), speaking for the Court, clarified the principles applicable to the Wills Variation Act. Tataryn continues as the governing authority. On an application to vary a will “the court must ask itself whether the will makes adequate provision and if not, order what is adequate, just and equitable. These are two sides of the same coin” (Tataryn at 814). “Adequate, just and equitable” is determined in the specific circumstances and in light of contemporary standards.

Against this consideration is balanced the principle of testamentary autonomy. However, testamentary autonomy must ultimately yield to what is “adequate, just and equitable”: Tataryn at 815-816.

[10] In Tataryn, supra, McLachlin J. clarified that what is “adequate, just and equitable” must be viewed in light of current societal norms, and wrote:

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

[11] In this wills variation case, the plaintiff was the testator’s only child. No other person was entitled to make a claim under the Act. The plaintiff did not advance legal obligations to support his claim. He relied, instead, on the moral obligations referred to in Tataryn.

[12] The defendant acknowledged that the circumstances under consideration here gave rise to a moral obligation in the testator respecting the plaintiff, but submitted that the testator’s written reasons for disinheriting the plaintiff were valid and rational, and that the plaintiff had failed to discharge the burden of establishing that those reasons were false or unwarranted. Accordingly the defendant submitted that the testator’s moral duty in respect of the plaintiff was negated: Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213.

[13] The law requires only that the reasons should be valid, meaning based on fact, and rational, in the sense that there is a logical connection between them and the act of disinheritance: Kelly v. Baker, [1996] 82 B.C.A.C. 150.

[14] Therefore, as previously stated, the defendant submitted that the plaintiff’s claim should be dismissed. In the alternative, the defendant took the position that the plaintiff’s moral claim to provision from the estate, if not negated, was tenuous or weak, and the plaintiff should be entitled to a maximum of 1/3 of the net estate, or approximately $130,000.

[15] By contrast the plaintiff’s position is that the reasons for disinheritance were unwarranted and only superficially or partially true, and asked that all or substantially the all of the net estate should be awarded to him.

However, there was one aspect of his life in which the testator came up badly short, and that was in the discharge of his parental obligations to his son. Whatever the strengths of the testator’s character, and I am prepared to accept that there were many, he had this one flaw: having brought the plaintiff into the world, and having fought assertively to gain custody of him, after his departure from England, he gave him short shrift and ignored and neglected him for most of his life.

[83] Apart from a couple of short visits in England, and with the notable exception of the trip to Canada in 1983, during his lifetime the testator provided the plaintiff with precious little material or emotional support. He occasionally raised the plaintiff’s hopes of establishing a proper relationship him, and I am satisfied that this is precisely what the plaintiff wanted, but then disappointed him by reverting into himself and allowing lengthy periods to pass without any communication.

[84] No one will ever know for sure what motivated, or failed to motivate, the testator. His attitude towards his son is most peculiar, especially when it is considered that, during their brief and intermittent encounters with each other, it appears that the testator and plaintiff got on well.

[85] I have no idea why, after the successful 1983 visit, the silence between father and son should have resumed, or why the testator would not agree to have the plaintiff come and stay with him for a while in 1988. It is a mystery to me why the testator travelled to England in 1989 for his sister’s funeral without looking up the plaintiff. His failure to make the effort to meet the plaintiff in Vancouver in 1995 strikes me as most odd as well, and the excuses given, that he had slept in and that, in essence, the visit would be too brief to merit the expense of making the journey, strike me as being petty, self-centred and more than a little sad.

[86] The testator seems to have been tightly connected to his sisters and their offspring. He was married to his second wife Betta for many years. He was a caring and devoted dog owner. I conclude that he was capable of forming strong bonds with loved ones, and of commendable constancy in his relationships with others, human and canine alike. But for some reason that I simply cannot fathom he rejected and neglected his son.

[87] I conclude that the testator turned his back on the plaintiff from an early age. Such efforts as he made over the years to care for his son or provide him with material or emotional support were miniscule. Most of the effort to keep any relationship alive was made by the plaintiff. Apart from a couple of impromptu appearances on the plaintiff’s doorstep in England and the 1983 Canadian visit, the testator’s life-long indifference to his only son was almost total.

Although every case must be decided on its peculiar facts, and the facts at bar differ from those in Gray v. Nantel,supra, nevertheless I would respectfully adopt the spirit of the following observation of Donald J.A. as follows at para. 17 of the judgment:

[17] I cannot accept that a child so neglected for his first 18 years and then treated shabbily during a brief reconciliation can be said to forfeit the moral claim to a share in his father’s estate by abandoning any further effort to establish a relationship. The fault in this sad story lies with the father and, in my opinion, the onus to seek further reconciliation was on his shoulders. The testator gave the appellant virtually nothing in an emotional or material way; the will was his last opportunity to do right by his son.

[90] Here, too, the testator had one last opportunity to behave after the manner of a judicious parent and recognize his moral obligation to his son by means of his will. He failed in

What Constitutes a Marriage-Like Relationship?

The Criteria of a Marriage-Like Relationship

Campbell v Campbell 2011 BCSC 1491 is a family law, common-law relationship of approximately 5 years that again reviews the various criteria as to what constitutes a common-law marriage.

The parties cohabited unmarried for approximately February 1998 two spring 2002. The female worked the odd job, was primarily financially dependent on her male partner, and she spent most of her time with duties around the home including assisting all the children in the blended family from time to time. Her household activities occupied much of her time. Her husband worked at his job full-time work in a considerable number of hours per week.

One of the issues was that prior to getting married, the parties entered into a marriage agreement, After reconciling after approximately 1 years separation,the parties ultimately married in August 2005. The relationship continued on in much the same basis.

The court at paragraph 39 makes a clear statement that in the eyes of the law, spouses are individuals who are either married to one another or living in a marriage-like relationship. Marriage-like is not defined in the family relations act or in estate litigation estate law for that matter, and thus the meaning has largely been developed through case law.

The Law

( 40) The starting point with respect to what constitutes a marriage-like relationship is the Court of Appeal’s decision in Gostlin v. Kergin (1986), 3 B.C.L.R. (2d) 264 at 268,1 R.F.L. (3d) 448 [Gostlin], wherein the Court stated:

… If each partner had been asked, at any time during the relevant period of more than two years, whether, if their partner were to be suddenly disabled for life, would they consider themselves committed to life-long financial and moral support of that partner, and the answer of both of them would have been ‘Yes’, then they are living together as husband and wife. If the answer would have been ‘No1, then they may be living together, but not as husband and wife.

Of course, in the particular circumstances of any case, the answer to that question may prove elusive. If that is so, then other, more objective indicators may show the way. Did the couple refer to themselves, when talking to their friends, as husband and wife, or as spouses, or in some equivalent way that recognized a long-term commitment? Did they share the legal rights to their living accommodation? Did they share their property? Did they share their finances and their bank accounts? Did they share their vacations? In short, did they share their lives? And, perhaps most important of all, did one of them surrender financial independence and become economically dependent on the other, in accordance with a mutual arrangement?

[41] The subjective intention of the parties is not determinative. As suggested in Gostlin, if one party submits that it was not their intention to commence a marriage-like relationship at that particular time, his or her statement is not conclusive if objective factors exist that suggest that a marriage-like relationship existed (see also Takacs v. Gallo (1998), 157 D.L.R. (4th) 623 at para. 53,48 B.C.L.R. (3d) 265 (C.A.), leave to appeal to SCC ref d, [1998] S.C.C.A. No. 238).

[42] In Molodowich v. Penttinen, [1980] O.J. No. 1904,17 R.F.L. (2d) 376 (Dist. Ct), the Court delineated the type of objective factors that might point to the existence of a marriage-like relationship. Such factors include: their living and sleeping arrangements; their sexual and personal behaviour; how they divided domestic tasks; whether and how they interacted with their respective families and communities; whether they held themselves out as a “couple”; whether one spouse relied on the other for financial support; and their conduct and attitude towards children.

[43] There is no “checklist of characteristics” that must be present in order to qualify as a marriage or marriage-like relationship. As the Court held in Austin v. Goerz, 2007 BCCA 586 at para. 58,74 B.C.L.R. (4th) 39 [Austin]:

[58] It is understandable that the presence or absence of any particular factor cannot be determinative of whether a relationship is marriage-like. This is because equally there is no checklist of characteristics that will invariably be found in all marriages. In this regard I respectfully agree with the following from the judgment of Ryan-Froslie J. in Yakiwchuk v. Oaks, 2003 SKQB 124 [Yakhvchuk]:

[ 10] Spousal relationships are many and varied. Individuals in spousal relationships, whether they are married or not structure their relationships differently. In some relationships there is a complete blending of finances and property – in others, spouses keep their property and finances totally separate and in still others one spouse may totally control those aspects of the relationship with the other spouse having little or no knowledge or input. For some couples, sexual relations are very important – for others, that aspect may take a back seat to companionship. Some spouses do not share the same bed. There may be a variety of reasons for this such as health or personal choice. Some people are affectionate and demonstrative. They show their feelings for their “spouse” by holding hands, touching and kissing in public. Other individuals are not demonstrative and do not engage in public displays of affection. Some “spouses” do everything together – others do nothing together. Some “spouses” vacation together and some spend their holidays apart. Some “spouses” have children – others do not. It is this variation in the way human beings structure their relationships that make the determination of when a “spousal relationship” exists difficult to determine. With married couples, the relationship is easy to establish. The marriage ceremony is a public declaration of their commitment and intent. Relationships outside marriage are much more difficult to ascertain. Rarely is there any type of “public” declaration of intent. Often people begin cohabiting with little forethought or planning. Their motivation is often nothing more than wanting to “be together”. Some individuals have chosen to enter relationships outside marriage because they did not want the legal obligations imposed by that status. Some individuals have simply given no thought as to how their relationship would operate. Often the date when the cohabitation actually began is blurred because people “ease into” situations, spending more and more time together. Agreements between people verifying when their relationship began and how it will operate often do not exist.

[Italics emphasis in original; underline emphasis added.]

[44] Each relationship is unique, and as described by Dardi J. in J.J.G. v. K.M.A., 2009 BCSC 1056 at para. 34,71 R.F.L. (6th) 349 [J.J.G.], “in undertaking the analysis of what constitutes a marriage­like relationship, the court should take a broad view in order to reflect the diversity of spousal relationships that exist in modern society.” Further, the Court noted at para. 37:

[37] In summary, in undertaking an analysis of whether persons are living together as spouses, the court must examine the relationship as a whole and consider all the various objective criteria referred to in the authorities. The presence or absence of one particular factor will not be determinative. The court must recognize that each relationship is unique and, in applying a flexible approach within the context of the particular relationship, make a determination as to whether the parties intended to and were living in a marriage-like relationship.

Common Law Spouse of 21 Years Awarded %70 Estate

seventy

 

The plaintiff and the deceased lived together in a common-law marriage like relationship for 21 years in a house owned by Rose. At the time of cohabitation, Rose was divorced and the deceased was separated. Rose had one child from a previous relationship.

 

At the time of the deceased death, Rose was retired and owned a house worth $1,240,000.

 

The deceased and his mother jointly owned a condominium and term deposits of some $69,000.

 

The defendants were the deceased sister and brother, nieces and nephews.

 

In generate 2007, one month prior to his death, Rose and the deceased made handwritten changes to the deceased will and had roses some type of the new will. The new will appointed rose as executor, made special bequests to the church and cancer foundation and gave the residue of the estate to Rose.

 

The new will was signed but not witnessed.

 

The new will had markings Rose said were made by him after the deceased died and not by the deceased to indicate she did not agree with parts of the will.

 

Rose asked a Notary Public to transfer the bank accounts into joint names.

 

The Notary Public attended the hospital to speak with the deceased, but did not prepare a new will as she said there was no spontaneous response from the deceased to requests to prepare a new will.

 

Rose brought court action to vary the will as he said the original will did not make adequate provision for his maintenance and support.

 

The action was allowed on the basis of the deceased had neither illegal nor moral obligation to the defendants, where she had both to Rose.

 

Rose’s net worth in relation to the deceased was not a factor. The variation of the will was adequate just and equitable to Rose and entirely appropriate in all the circumstances.

 

The court ordered that Rose receive 70% of the net value of the estate with the residue to be divided between the church and the other defendants.

 

THE LAW

The basis for bringing a claim to vary a will, is found in s. 2 of the Wills Variation Act, R.S.B.C. 1996, c. 490 (the “Act”):

2. Despite any law or statute to the contrary, if a testator dies leaving a will that does not, in the court’s opinion, make adequate provision for the proper maintenance and support of the testator’s spouse or children, the court may, in its discretion, in an action by or on behalf of the spouse or children, order that the provision that it thinks adequate, just and equitable in the circumstances be made out of the testator’s estate for the spouse or children.

[37] The plaintiff comes within the definition of “spouse” found in the Act:

“Spouse” means a person who

(a) is married to another person, or

(b) is living and cohabitating with another person in a marriage-like relationship, including a marriage-like relationship between persons of the same gender, and has lived and cohabitated in that relationship for a period of at least 2 years.

[38] Counsel for the parties are on common ground that the test for whether a testator has made adequate provision for the maintenance and support of a spouse is the decision of the Supreme Court of Canada in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807. In Tataryn, the Court found that two sets of societal norms must be addressed:

(1) legal obligations which the law would impose upon the testator during his or her lifetime; and

(2) moral obligations, which are society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards.

[39] At p. 821 of her reasons, McLachlin J. (as she then was) explained that together these societal norms provide a guide to what is “adequate, just and equitable” in the circumstances of the case.

[40] The Court also recognized the importance of protecting testamentary autonomy. At pp. 823-4 McLachlin J. held, as follows:

I add this. In many cases, there will be a number of ways of dividing the assets which are adequate, just and equitable. In other words, there will be a wide range of options, any of which might be considered appropriate in the circumstances. Provided that the testator has chosen an option within this range, the will should not be disturbed. Only where the testator has chosen an option which falls below his or her obligations as defined by reference to legal and moral norms, should the court make an order which achieves the justice the testator failed to achieve. In the absence of other evidence a will should be seen as reflecting the means chosen by the testator to meet his legitimate concerns and provide for an ordered administration and distribution of his estate in the best interests of the persons and institutions closest to him. It is the exercise by the testator of his freedom to dispose of his property and is to be interfered with not lightly but only in so far as the statute requires.

[41] However, counsel are not on common ground about whether the recent decision in Picketts v. Hall (Estate), 2009 BCCA 329, 95 B.C.L.R. (4th) 83, has changed the law, or whether the outcome applies to the facts in the case at bar.

[42] In Picketts,the Court squarely addressed the issue of the legal and moral duty owed by a testator to a common law spouse, and whether different considerations apply to a common law spouse than to a married spouse in an application to vary a will.

[43] In that case, Mr. Hall and Ms. Picketts had lived together for 21 years as though they were a married couple. On Mr. Hall’s death, Ms. Picketts was 75 years of age. He left two adult sons, and an estate worth $18,000,000.

[44] Under his will, Mr. Hall left Ms. Picketts the condominium they had been living in, and $2,000 per month for her life. The Court awarded Ms. Picketts $5,500,000, which was an amount close to one-third of the value of the estate, the amount she would have received under the provisions of the Estate Administration Act, R.S.B.C., 1996, c. 122 (the “EAA”).

[45] Low J.A. dealt with Mr. Hall’s moral obligation to Ms. Picketts and the application of the EAA, as follows:

[54] Although McLachlin J. in Tataryn did not discuss the Estate Administration Act, R.S.B.C. 1996, c. 122, or its applicable predecessor, under the topic of legal obligations, I think that statute bears mentioning at this point. The provisions in the statute as to intestacy succession create a default succession in law if a person should die without a will. Section 85 states that, on an intestacy in which there is a surviving spouse and a surviving child or surviving children, the spouse is entitled to the first $65,000 of the estate and half of the residue if there is one child surviving, and one-third of the estate if there is more than one child surviving.

[55] In the unlikely event that Mr. Hall had died intestate, Ms. Picketts would have received one-third of the entire estate. This is because the definition of “common law spouse” in the Estate Administration Act was amended by the Definition of Spouse Amendment Act, S.B.C. 1999, c. 29, to mean, inter alia, “a person who has lived and cohabited with another person in a marriage-like relationship, including a marriage-like relationship between two persons of the same gender, for a period of at least 2 years immediately before the other person’s death”. This is essentially the same definition as the definition of “spouse” in the Wills Variation Act. The two definitions became law on the same date.

[56] Although the intestacy provisions of the Estate Administration Act do not directly affect the legal considerations under Tataryn, it is significant that the Legislature chose to amend both statutes at the same time. This can be seen as a dovetailing of the two statutes to reflect the social norms of the day and, to repeat the quote from Tataryn at p. 822, to “reflect a clear and unequivocal social expectation, expressed through society’s elected representatives…”

Who Owns Your Digital Data After Death

Reprinted from the Economist July 18,2013

The Economist explains

Who owns your digital data after death ?

AFTER we die, our bodies are reduced to dust or ash, through burial or cremation. The fate of the digital corpuses we leave behind is rather more complicated. Before the advent of internet-hosted storage and services, your digital remains would have been accessible only to those with physical access to your computers, and only then if you had not applied encryption or password protection. But these days many people leave traces of their lives spread across the internet. Facebook knows who we love and hate, Google knows what we are interested in, Amazon knows what we buy, and so on. Specialist services may even store information about your genetic makeup (23andme) or archives of your files (Dropbox, CrashPlan, and many others). Who owns your data when you’re dead?

No one, not even a probate lawyer, will tell you that the process of transferring property by writing a will—or dealing with the absence of one—is a simple matter. But when it comes to financial assets, physical goods or property, thousands of years of tradition and many hundreds of years of legal precedent provide a basis on which to proceed in even the most esoteric cases. Digital assets that are stored on shared servers in the cloud, by contrast, are so new that legal systems have not yet caught up. Five American states have passed legislation to provide executors and other parties with a legal basis on which to assert authority over digital assets, and others are considering similar rules, but these laws vary widely in what they cover (the oldest of them covers only e-mail). There are no federal laws. The same is true in other countries. To complicate matters further, internet firms may be based in different countries from their users and may store data in servers in many countries, making it unclear whose laws would apply.

A paper by Maria Perrone in the journal CommLaw Conspectus explains how internet firms and digital service-providers sit in final judgment when it comes to deciding the fate of data belonging to the dead. Some firms cite an American law from 1986, the Stored Communications Act, as clearly prohibiting many forms of data handover to heirs or estates, even with verified written instructions asking for data to be released. The law provides no exemptions and involves hefty prison sentences for violators. But every company seems to have its own set of rules, procedures and terms of service. Some require a legal executor to make a request, while others honour requests from anyone who can prove a family connection or even a link to an online obituary. Facebook limits valid parties to requesting either that an account be removed or be turned into a memorial site. Twitter says bluntly that it can deactivate an account on presentation of several bits of information, but it is “unable to provide account access to anyone regardless of his or her relationship to the deceased.” Some firms delete accounts after inactivity; others refuse to allow renewals to keep the data alive; others won’t allow any changes, and leave a user’s data frozen in time, to the distress of those left behind. Several companies, such as Cirrus Legacy and LegacyLocker, offer digital safes for passwords and documents, releasing them only to authorised parties in the event of the owner’s death. But such firms state clearly that their contract is not legally binding in two regards: a judge or executor might compel them to release information to people other than those specific by the owner, and the passwords may be useless if they relate to an account that has been separately deactivated or shut down.

All this can be maddening for those dealing with grief. But there are signs of progress. In April, Google released the Inactive Account Manager, which in effect allows users of its service to set up a digital will. When enabled, it activates a dead-man’s switch, and if the account is not used for a specified period (between three and 18 months) an e-mail can be sent to a trusted contact, and there is an option to delete the account automatically. The trusted contact can then follow a procedure to gain access to the account. Other internet giants may follow suit and offer similar features. More broadly, America’s Uniform Law Commission, a non-partisan group that creates model legislation that is then adopted unchanged by many American states, has a “Fiduciary Access to Digital Assets” committee working on amendments to existing ULC laws that would give executors many of the same powers over digital assets that they have over financial and physical ones, while absolving service providers of any liability. These adjustments could be incorporated into some states’ laws as soon as 2015, though some federal fiddles may be required as well. In her paper, Ms Perrone notes that such uniformity would mean that “people would no longer have to rely on companies’ varying terms of use to determine how to manage digital assets.” When dealing with death, a little certainty can be a great comfort.