BC Estate Lawyer-Executor Removed For Conflict of Interest

Trevor Todd and Jackson Todd have practiced estate litigation in Vancouver for over sixty combined years and have experience in removing executors.

Executor Removed For Conflict of Interest

Re Thomasson Estate 2011 BCSC 481 is a classic conflict of interest situation that required the court to passover one executor ,where another co executor questioned a certain transfer of property that involved the executor.Continue reading

Daughter Awarded $5.5 Million in Wills Variation Claim

Daughter Awarded $5.5 Million

The Wilson v Lougheed Estate case, 2010 BCSC 1868 is one of a few cases only in BC that deal with a large wills variation award in favour of a disinherited child, that involved a very large estate

The plaintiff was a 47 year old only child of the deceased who was left 1.4% of her mother’s $20 million dollar estate under her will. Continue reading

Reasons For Disinheriting Daughter not Accurate or Rational

Reasons For Disinheriting Daughter

Todd v MacDonald Estate 2009 BCSC 677 is an example of a wills variation claim that succeeded, on the basis that the court found that the testator’s reasons for disinheriting her daughter, were not accurate nor rational.

The testator had 2 children from 2 different marriages.

The older daughter was on good terms with her mother until 1996 when they had an argument over the testator’s refusal to to the plaintiff where her grandmother was located.

The plaintiff told her mother that she was a controlling person.

The plaintiff did not see her mother again before she died in 2007, but did speak to her on the phone several times a year.

The testator left the daughter $1, and the remaining estate of $394,000 entirely to her son.

The testator’s stated reasons in her will were “the fact that there has beeen no favorourable communication between us in any way for approximately 20 years”.

The court found that a reasonable parent would not, after the heat of the moment subsided, regard the 1996 argument, in its context, as a reason to disinherit the plaintiff.

The rationale for disinheriting the plaintiff was not valid, nor was it consistent with the discharge of the testatrix’s parental obligations.

While the son had a close relationship with his mother, it was partly because they lived in the same city.

The court awarded the daughter 40% percent of the estate and the remaining 60% to the son.

disinherited.com strongly approves of the rationale applied in this case.

Wills Variation -The Basics

 

 WILLS VARIATION BASICS

 

Any discussion of the Wills Variation Act requires an understanding of the English common law which provides the background for thatAct.

English common law, developed by the English judges over the centuries, provided that when a person died, that person could leave his or her property to whomsoever he or she wished.

This complete freedom to dispose of one’s estate is known as “testamentary autonomy ” or “testamentary freedom”. This legal doctrine was developed by the English courts during a time (1700-1900) when little property was actually disposed of by will.

During that time, few people actually had any property and most wealth was made up of real property which was usually considered to be family property. Because it did not belong to the individual, it was not part of the individual’s estate to be disposed of by will.

When the children of wealthy families married, their families often made marriage settlements which included conditions about the ownership of the property and how it would pass upon the death of various family members. Thus, property governed by a marriage settlement was not part of an individual’s estate.

It was in this context that the English courts decided that a testator was free to decide who should inherit under his or her will.

Thus, the English common law left it to the discretion of testators to dispose of their estates as they saw fit. Even today at common law testators have no binding obligation to leaveany amount to their spouse or their children. Keep in mind that this common law approach is in stark contrast to the civil law approach which governs the rest of Europe most of the non-English speaking world.

This English common law was “received” or inherited by all of the former English colonies, including Canada. The remaining countries of Europe and their former colonies have civil law systems. Under this system a fixed portion of a deceased’s estate (often 50% to 75%) passes automatically to the surviving spouse and children. The testator can only dispose freely of a smaller portion of his or her estate. The credo seems to be “you had them, you give them your property when you die”.

In our common law world, the doctrine of testamentary freedom has been modified by statutes such as the Wills Variation Act which permit the spouse or children to make a claim against the estate in appropriate circumstances. Nevertheless, testamentary freedom still prevails unless there is a successful statutory claim brought under the Wills Variation Act.

In British Columbia, our Wills Variation Act provides for equity to be done where an appropriate claim is bought by a child or spouse who is disappointed with the provisions of the Deceased’s last will. They may have been given a minimal sum, left out altogether or disappointed because the deceased leaves them merely a life interest rather than giving them the property outright.

2. Assets subject BC Wills Variation Act.

What property is subject to the British Columbia Wills Variation Act?

Real property located in B.C. will be subject to the Wills Variation Act, no matter where the Deceased lived prior to his or her death.

Personal property (basically cash, securities and moveable assets) whereever located, will fall under the Wills Variation Act, only if Deceased was domiciled in B.C. when he or she died. In basic terms “domiciled” means that the deceased lived in British Columbia and intended to make B.C. his or her permanent home.

Only those assets which actually form part of the Deceased’s estate are subject to the Wills Variation Act claims. Thus, for example a pension benefit payable to a third party beneficiary will likely not be part of the deceased’s estate nor will insurance proceeds payable to a particular beneficiary. Although such excluded assets cannot be divided up by the court in action brought under the Wills Variation Act they may be considered by the court in ultimately determining what is a fair share of the estate for the various parties if a Wills Variation Act claim is made.

As to assets held in joint tenancy, it will depend on the individual circumstances of the case whether they pass automatically to the surviving joint tenant or whether they form part of the estate. For example, if the other owner is the Deceased’s spouse, chances are good that they will take the property by right of survivorship so it will not fall into the Deceased’s estate. If the property is held with someone else, it will depend who paid for the property and the reason for which it is held in joint names-it may be held in trust for the estate or it may pass by right of survivorship.

3. Legislative Background

New Zealand was the first common law jurisdiction to seriously question the doctrine of testamentary freedom on the basis that the family had a right to be protected. In 1900 New Zealand passed the Testator’s Family Maintenance Act and in 1920 British Columbia followed suit.

Other Canadian provinces have similar legislation however in other common law provinces children have no claim unless they are infants or were otherwise dependent on the testator.

The major difference is that under the B.C. Wills Variation Actthe testator’s children may bring a claim irrespective of their age or state of dependency.

Thus, in other provinces, a parent may disinherit an adult independent daughter on the basis of her gender alone or disinherit a gay son based on his sexual preference alone. There would be no remedy in either case unless the child was still a dependent.

In British Columbia, however, such wills would be open to challenge under the provisions of our Wills Variation Act as being unfair and in breach of our contemporary community standards.

4. Potential Claimants In British Columbia

Section 2 of the Wills Variation Actpermits a claim to be brought only by a spouse or child of the Deceased.

The Act defines spouse to include a same sex or common law spouse provided the couple had been cohabiting in a marriage-like relationship for at least 2 years prior to the Deceased’s death.

The case law interprets children to include adopted children but not step children. In the case of unacknowledged biological children DNA testing may be very helpful in appropriate cases.

5. Interpretation of our Wills Variation Act

Section 2 is the heart of the Wills Variation Act. It provides that where, in the court’s opinion, a will does not make adequate provision for the proper maintenance and support of the Deceased’s spouse or children, then the court has discretion to vary the will to make the provision that it believes to be adequate just and equitable in the circumstances.

The claimant doesnot need to prove financial need in order to obtain a variation of the will. Our courts have turned away from a financial needs-based approach since Walker v. McDermott [1931] SCC 94. In that decision the Supreme Court of Canada majority ruled that in deciding the question as to what is adequate provision, the court should proceed from the point of view of the quotes judicious father of a family seeking to discharge both his marital and his parental duty”.

This approach was upheld in the modern day decision of Tataryn v. Tataryn [1994] 2 SCR 807 where McLachlin J (now the Chief Justice of Canada) clarified the moral duty concept and observed that in applying the Wills Variation Act “the search is for contemporary justice” (p. 815)

Over the decades, our courts have gradually settled the proper considerations concerning s. 2 of the Act and the relevant principles were succinctly summarized by Satanove J. in Clucas v. Clucas BCSC A9732988.

Satanove J summarizes the test for adequate and proper maintenance and support under s. 2 of the Wills Variation Act, describing it as an objective analysis of whether the testator was “acting in accordance with society’s reasonable expectations of what a judicious parent would do in the circumstance by reference to contemporary community standards.”

In paragraph 12 Satanove J. says as follows:

“The considerations governing the court’s decisions have
evolved over time and there is a fairly comprehensive set of
competing principles to which effect must be given. I have
endeavoured to summarize these as follows:

1. The main aim of the Act is the adequate, just and
equitable provision for the spouses and children of
testators. (Tataryn v. Tataryn Estate, [1994] 2
S.C.R. 807)

2. The other interest protected by the Act is
testamentary autonomy. 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 insofar as the statute requires.
(Tataryn, supra)

3. The test of what is “adequate and proper maintenance
and support” as referred to in s. 2 of the Act is an
objective test. The fact that the testator was of
the view that he or she adequately and properly
provided for the disinherited beneficiary is not
relevant if an objective analysis indicates that the
testator was not acting in accordance with society’s
reasonable expectations of what a judicious parent
would do in the circumstance by reference to
contemporary community standards. (Tataryn, supra;
Walker v. McDermott, [1930] S.C.R. 94; Price v.
Lypchuk Estate (1987), 11 B.C.LR. (2d) 371 (C.A.);
Dalziel v. Bradford et al. (1985), 62 B.C.L.R. 215
(B.C.S.C.))

4. The words “adequate” and “proper” as used in s. 2 can
mean two different things depending on the size of
the estate. A small gift may be adequate, but not
proper if the estate is large. (Price v. Lypchuk
Estate, supra)

5. Firstly, the court must consider any legal
obligations of the testatrix to her spouse or
children and secondly, the moral obligation to her
spouse or children. (Tataryn, supra)

6. The moral claim of independent adult children is more
tenuous than the moral claim of spouses or dependent
adult children. But if the size of the estate
permits, and in the absence of circumstances negating
the existence of such an obligation, some provision
for adult independent children should be made.
(Tataryn, supra)

7. Examples of circumstances which bring forth a moral
duty on the part of a testator to recognize in his
Will the claims of adult children are: a disability
on the part of an adult child; an assured expectation
on the part of an adult child, or an implied
expectation on the part of an adult child, arising
from the abundance of the estate or from the adult
child’s treatment during the testator’s life time;
the present financial circumstances of the child; the
probable future difficulties of the child; the size
of the estate and other legitimate claims. (Dalziel
v. Bradford, supra and Price v. Lypchuk, supra)

8. Circumstances that will negate the moral obligation
of a testatrix are “valid and rational” reasons for
disinheritance. To constitute “valid and rational”
reasons justifying disinheritance, the reason must be
based on true facts and the reason must be logically
connected to the act of disinheritance. (Bell v. Roy
Estate(1993), 75 B.C.L.R. (2d) 213 (B.C.C.A.);
Comeau v. Mawer Estate, [1999] B.C.J. 26 (B.C.S.C.);
and Kelly v. Baker (1996), 15 E.T.R. (2d) 21
(B.C.C.A.))

9. Although a needs/maintenance test is no longer the
sole factor governing such claims, a consideration of
needs is still relevant. (Newstead v. Newstead
(1996), 11 E.T.R. (2d) 236 (B.C.S.C.))

Most recently in the case of McBride v. Voth 2010 BCSC 443, Ballance J. reviewed six of the considerations in forming the existence and the strength of the testator’s moral duty to his or her adult independent children.

a. Contribution and Expectation

Contributions made by the children to the Deceased’s estate or care for the Deceased will strengthen the moral obligation to provide for his or her independent children. Similarly any contribution made by their deceased mother or father, the first spouse of the deceased, may support a claim to a moral obligation.

A moral duty may also arise if the Deceased’s conduct created a bona fide expectation to receive a benefit

b . Misconduct/Poor Character

S. 6(b) of the Wills Variation Act allows the court to refuse variation to a person whose conduct or character, in the opinion of the court, disentitles him or her to relief. Generally speaking, however, such conduct must be relatively severe in order to justify disinheritance.

c. Estrangement Neglect

The court will usually enquire into the reasons for the estrangement and the role the testator played. If the estrangement is seen to be largely the fault of the testator it may actually enhance the testator’s moral duty as a means of rectifying the testator’s neglect of the children.

d. Gifts and Benefits made by the Testator outside of the will

Where a testator makes gifts during his or her lifetime to the claimant or confers benefits by way of insurance proceeds or pension benefits etc. the court will take these into account in determining whether or not the deceased moral duty has been fulfilled outside of the will.

e. Unequal Treatment of Children

In the absence of relevant reasons for an unequal distribution there is a reasonable expectation that adult children will share equally even though there is no legal obligation.

f. Testators Reasons for Disinheritance/Subordinate Benefit

Where the deceased provides reasons for the disinheritance, if those reasons are shown to be inaccurate then the court may vary the will under the provisions of the Wills Variation Act. If however they are accurate they may still be objectively insufficient when viewed through the lens of a judicious parent using contemporary standards. For example Peden, Smith et al 2006 BCSC 1713 involved a deceased who left three sons, two heterosexual sons and one gay son. He provided his two heterosexual sons with an outright inheritance however the gay son would receive only the income of the third share of the estate. In varying the will to convert that life estate to be an outright gift to the gay son, the court observed “homosexuality is not a factor in today’s society justifying a judicious parent disinheriting or limiting benefits to his child.”

Conclusion

The Wills Variation Act is an important piece of legislation because it allows equity to be done for both spouses and adult independent children who have been wrongfully disinherited.

Whether the disinheritance arises because of family abuse, elder abuse or cultural norms favouring male heirs there are many circumstances in which the Wills Variation Act allows for equity to be done for the surviving family.

Undue Influence Dismissed as Long Hostile Relationship Between Siblings

Long sibling rivalry

Sibling’s Claim of Undue Influence Dismissed

Calbrick v Wolgram Estate 2009 BCSC 1222 is an unfortunate example of a fact pattern that occurs all too often in estate litigation.

Basically, one sibling alleged his sister obtained substantial gifts from their mother using undue influence, and abusing her mother’s power of attorney.Continue reading

Wills Variation: Spouse Trumps Children

Wills Variation: Spouse Trumps Children

In wills variation litigation, it is quite common for spouses, infant children, and adult children, to have conflicting claims against the other, but the claim of a spouse will trump the claims of adult children..

Generally speaking, claims based on legal obligations, such as those owed by a testator to spouses and minor children, will take precedence over moral obligations that might be owed to adult independent children.

Where the size of the estate permits, the court may satisfy moral obligations after firstly satisfying the legal obligations.

Waldman v Blumes 2009 BCSC 1012 is a good example of how the courts might deal with such conflicting claims .

The facts are a bit unique given the promises and decisions made by the testator and his spouse during their lifetimes.

The testator died at age 91 , widowing his 2nd wife and leaving four children, two of them ages 17 & 15 from the 2nd marriage.

The widow, a lawyer, was 34 years younger than her husband and had made significant career and family decisions based on their joint decision that the deceased would leave her his entire estate.

The estate was approximately $1.2 million.

The spouse had in addition also received the family home prior to his death.

The will did not provide for his two adult children.

The court found that as a result of the reliance on the mutual plans made and the lifestyle adopted, the testator owed his widow a high legal obligation.

She had two children at his urging and worked only part time at his urging, as given their vast age difference, he wanted his family around him.

The court awarded $75,000 to each of two adult children , based primarily on the fact that neither daughter had received any inheritance upon the death of their mother.

The Court left it to counsel for the minor children to try and negoitate how much of the remaining $1,050,000 belonged to each child and how much belonged to their mother.

Abandoned Children Win Wills Variation Action Based on Moral Obligation Owed by Deceased Mother

Brown v. Wisted Estate 2010 BCSC 1890 involves a wills variation action brought by 2 of the deceased’s 7 surviving abandoned children, against one other sibling, who inherited everything from their mother.

The deceased abandoned her 7 children in New Brunswick and move to British Columbia in 1968.Continue reading

Varying a Will BC Lawyer- Wills Variation Long Common Law Relationship

Trevor Todd and Jackson Todd have handled contested estates for over sixty combined years, including varying wills in favour of long term common law spouses.

 

The BC Court of Appeal in Picketts v Hall 2009 BCCA 329 significantly overturned the trial judge’s decision relating to a 21 year long commonlaw marriage.

The deceased was a wealthy man who left an estate of more than $18 million.Continue reading

Widow in Short Marriage Awarded 36% of Deceased Husband’s Estate

Elderly Wife in Short Marriage Awarded 36% of Husband's Estate

86 Year Old Elderly Wife in Short Marriage Awarded 36% of  Husband’s Estate

Miller v Miller Estate 2011 BCSC 29, involves a successful claim brought by an 86-year-old surviving spouse, who had few assets and a limited income when she married the testator in 2005.

On his death in 2009, the testator’s will left his wife nothing out of an estate of $510,000.

The wife did however receive the testator’s financial assets of approximately $170,000 by right of survivorship.

The testator had 3 sons from the 1st marriage, and he left almost all of his estate to one son had very little to the other 2.

The court approach the plaintiff’s claim on the basis as to what she would have been entitled based on the notion of separation immediately before the testator’s death.

The court analyzed her claim on that basis, and found that the plaintiff would have been entitled to a half interest in the family assets, all of which were now estate assets, subject then to a significant reapportionment in favor of the deceased of 70%, to achieve fairness.

The court examined the relatively short length of the marriage, the role of the wife as a companion and helper to the deceased, as well as her financial circumstances.

The court concluded that she would have been entitled to minimal compensatory but primarily non-compensatory support under section 15.2 of the Divorce Act.

The court determined that an appropriate award for lump sum spousal support would have been $20,000.

The legal obligation owed to the plaintiff totalled $54,000.

Therefore the court awarded $75,000 out of the net sale proceeds of the matrimonial home, which together with the joint assets received of approximately $170,000, gave the plaintiff roughly 36% of the overall estate.

disinherited.com notes that there has in the past been some inconsistencies in the approach which the courts have taken when dealing with an elderly surviving spouse and the wills variation claim. ( In particular note the decision of the BC Court of Appeal in Crearer)

The trend by the courts in recent years, as witnessed by the approach taken by this judge, is to apply family law and divorce law principles to wills variation claims brought by surviving spouses.

Court “Regrettably” Declares Will Executed Before Marriage To Be Void

Will Executed After MarriageWill Executed Before  Marriage “Regrettably” Declared Void

 

Please note that due to the implementation of WESA. this will no longer be the law for wills signed on or after  April 1, 2014 

MacLean Estate v. Christiansen 2009 BCSC 1159 is a good example of the legal hardship that can ensue if a testator executes a will before his or her marriage.

This is because section 15 (a) of the Wills Act, RSBC, provides that a will is revoked by the marriage of the testator, unless there is a declaration in the will, that it is made in contemplation of the marriage.Continue reading