S 60 WESA (Wills Variation): Second Marriages/Families

S 60 WESA (Wills Variation): Second Marriages/Families

Wong v Soo 2015 BCSC 1741 involves the increasingly familiar fact scenario of second or third marriages resulting in the death of one spouse and leaving his or her entire estate to the children of the first marriage to the exclusion of the surviving spouse.

The deceased died prior to March 31, 2014 so the cases brought under the previous wills variation act and not section 60 WESA.

There is no difference in the outcome under either statute as there are essentially the same.

The plaintiff was married to the deceased for 12 years and the defendants were her four children of her first marriage, along with her sister, who inherited in equal shares.

The deceased died at age 61 and the plaintiff was mostly retired and had his own children from a first marriage. The plaintiff was not provided for in the will.

The major asset of the estate was the matrimonial home, which had increased in value by $1 million since the date of marriage.

The estate value itself was $1,280,000, and a further $780,000 such as insurance and joint accounts passed outside of the estate to the defendants.

The plaintiff claimed that the entire estate was $2 million and that he had a claim against all of it.

The plaintiff received $89,000 outside of the will from an insurance fund, as well as to pensions from the deceased. He received five pensions in total for a monthly income of $3500.

The deceased were Statutory Declaration when she signed her will three months prior to her death, stating that she and the plaintiff had already separated their assets and agreed with each other that they would each leave their estate to their children from their first marriage.

This alleged agreement was not in writing and was held to be invalid under the provisions of section 61 of the Family Relations Act, ( FRA) which states that marriage agreements must be in writing. The court did hold that the invalid agreement was a factor for consideration and not determinative of entitlement (Miller v Miller 2011 BCSC 29)

The court awarded the second spouse an additional $230,000.

The Court held that the Family Law Act provisions apply to disinherited spouses

The Law: Second Spouses and Varying a Will

Legal Duty:

[73]         In cases such as this, family law legislation must be given consideration.

[74]         In Houston v Fowler 2014 BCSC 489  Justice Macaulay states at para. 30:

In determining whether Bob made adequate provision for Angela, the first step is to determine his minimum legal obligations. For a spouse, the legal obligations are measured by a notional division of family property under the Family Relations Act, R.S.B.C. 1996, c. 128, and a notional determination of Angela’s right to support under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), immediately before Bob’s death. See Glanville v. Glanville (1998), 58 B.C.L.R. (3d) 240 (C.A.) at paras. 14-15.

[75]         In this case, when applying the legal duty element of the WVA test, the parties are agreed that the old FRA is applicable.  The Family Law Act, S.B.C. 2011, c. 25 [FLA] came into force on March 18, 2013. At the time of Maureen’s death the FRA was in force and the final date in which the Will could be changed was the date of death on July 17, 2012. Therefore the FRA applies.

[76]         For the purpose of analysis, the issue of equal division of assets must be considered under the FRA and any unfairness that may result.  Further, consideration must be given to a division based on the increase in values of family assets.

[77]         Under the FRA there is a presumption of equal division of family assets. Under s. 56(2), each spouse is entitled to an undivided half-interest as a tenant in common in each family asset upon the occurrence of a triggering event (in this case, the date of death). This is an undivided one-half interest in the family asset, and therefore spouses share equally in any increase or decrease in value since the triggering date.

[78]         The interest of the husband is subject to consideration of the fairness provisions set out in s. 65 of the FRA, the relevant parts of which read as follows:

Judicial reapportionment on basis of fairness

65 (1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to

(a) the duration of the marriage,

(b) the duration of the period during which the spouses have lived separate and apart,

(c) the date when property was acquired or disposed of,

(d) the extent to which property was acquired by one spouse through inheritance or gift,

(e) the needs of each spouse to become or remain economically independent and self sufficient, or

(f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse, the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court.

Moral Duty

[79] The issue of second marriages and first children presents a unique problem − the court must assess moral obligations of a deceased towards a second spouse.

[80] The principals with respect to the moral obligations owed by a testator to her or his spouse and children, as set out in Tataryn, were summarized by Martinson J. in Steernburg v, Steernburg, 2006 BCSC 1672 at paras. 62-66 as follows:

[62] Second, the Court should consider the testator’s moral obligations to his or her spouse and children, in light of “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards” (at ¶28). With respect to the moral obligation to a spouse, the Court concluded that most people would agree that although the law may not require a supporting spouse to make provision for a dependent spouse after death, a strong moral obligation to do so exists if the size of the estate permits. The moral obligation is broader than the legal obligation and is assessed at the date of death.

[63] The moral duty is customized to each specific claimant. The test in determining whether a testator spouse has breached his or her moral duty is whether, as a just husband or wife he or she properly considered the situation of his or her spouse and an appropriate standard of living for that person: Holland v. Holland (1995), 9 E.T.R. (2nd) 119 (B.C.S.C.).

[64] The moral claim of independent adult children is more tenuous than the moral claim of spouses. 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 (at ¶31).

[65] Circumstances that will negate the moral obligation of the testator are “valid and rational” reasons for disinheritance. To constitute “valid and rational” reasons for 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.); Clucas v. Clucas Estate (1999), 25 E.T.R. (2d) 175 (B.C.S.C.); Comeau v. Mawer Estate (1999), 25 E.T.R. (2d) 276 (B.C.S.C.); and Kelly v. Baker (1996), 15 E.T.R. (2d) 219 (B.C.C.A.).

[66] As between moral claims, some may be stronger than others. The Court must weigh the strength of each claim and assign to each its proper priority. In doing so, the Court should take into account the important changes resulting from the death of the testator. There is no longer any need to provide for the person who died and reasonable expectations following upon death may not be the same as in the event of a separation during lifetime. A will may provide a framework for the protection of the beneficiaries and future generations and the carrying out of legitimate social purposes. Any moral duty should be assessed in light of the person who dies’ legitimate concerns which, where the assets of the estate permit, may go beyond providing for the surviving spouse and children: Tataryn at ¶32.

[81]         The moral duty of a testator in a second marriage was considered by Russell J. in Saugestad v. Saugestad, 2006 BCSC 1839, varied on a different ground 2008 BCCA 38 at paras. 121-130. An important consideration in determining the moral obligation owed to a second spouse is that spouse’s contribution to the estate as set out in Saugestad at para. 126:

[126] The more limited moral claim of a second wife where the bulk of the testator’s estate was acquired during a first marriage was also considered as a relevant factor in Howard v. Howard Estate (1997), 32 B.C.L.R. (3d) 1, 16 E.T.R. (2d) 161 (C.A.) at para. 5 (although there was also a prenuptial agreement in that case). Along a similar line of reasoning, in Price v. Lypchuk Estate (1987), 11 B.C.L.R. (2d) 371, 26 E.T.R. 259 (C.A.), the fact that the testator’s estate had been built up by the joint efforts of the testator and his second wife was a factor considered by Lambert J.A. in the majority’s decision not to vary the will in favour of the children of the testator’s first marriage (at 382 B.C.L.R.). Thus, the contribution of a spouse to the estate is an important factor in determining the moral entitlement of that spouse.

[82]         Other relevant considerations include any competing obligations with children from the first marriage, whether the spouse knew of the testator’s intention for his or her own children to inherit the estate, and the financial state of the spouse: Saugestad at paras. 125-129.

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