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Spousal Wills Variation Claims

Spousal Wills

Spousal Wills Variation Claims

Tippett v Tippett 2015 BCSC 291 is probably the most thorough analysis of the law since the Supreme Court of Canada in Tataryn  relating to how the claims of a surviving spouse vs. the estate of the deceased spouse is analysed under the wills variation act.

The facts simply put were the plaintiff and the deceased married in 1989 and acquired joint tenancy property in 1992 in which they lived together as man and wife until 2009. Both parties were employed and both contributed financially to the upkeep and improvement of the property.

The deceased was diagnosed with a debilitating disease in 2000, which necessitated the plaintiff leaving him in 2009 due to his abusive behaviour attributable to his illness. She continue to provide care services and financial assistance.

Two months prior to his death he severed the joint tenancy property and left one half his interest in the property to charities, with their remaining 50% to longtime friends who provided care and companionship to him after the plaintiff left.

The court varied his will and awarded the surviving spouse 50% of his estate.

 Tippett v Tipett Estate 2015 BCSC 291:
32      Thus, the first question for determination is whether the testator made adequate provision for the plaintiff. If he did, that ends the matter. If he did not, the court must decide what provision would be adequate, just and equitable in all of the circumstances of this case. In Houston v. Houston Estate, 2014 BCSC 489 (B.C. S.C.), at paras. 7 and 8, Macaulay J. referred to the applicable principles as set out in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (S.C.C.):
[7] The leading authority on the WVA is the Supreme Court of Canada decision in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807. The principles set out in Tataryn may be summarized, as follows:
• The main objective of the WVA is the adequate, just and equitable provision for the spouse and children of testators. The WVA also protects testamentary autonomy; where the testator’s choice falls within the range of appropriate options, the court will not interfere. However, where the testator has not made adequate provision for the survivors, testamentary authority must yield, and the court will vary the provisions of the will.
• In determining what is “adequate, just and equitable,” the court is to consider both legal obligations and moral obligations.
• Legal obligations are those which the law would impose on a person during his or her life were the question of provision for the claimant to arise.
• Moral obligations are found in “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to community standards.”
• Legal obligations must be satisfied first, and moral claims must be satisfied in order of priority.
• The moral claim of independent children is more tenuous than the moral claim of spouses or dependent children. However, if the size of the estate permits, and in the absence of circumstances which negate the existence of such an obligation, some provision should be made for adult independent children.
• The Act confers a broad discretion on the court, which permits the court to make orders which are just in the specific circumstances and in light of contemporary standards.
[8] Determining claims under the WVA is a two-stage process, as set out in Landy v. Landy Estate (1991), 60 B.C.L.R. (2d) 282 (C.A.). First, I must determine whether the will makes adequate provision for the plaintiffs, when considered in the context of all the testator’s legal and moral obligations. If the answer is “no,” I must then determine what provision would be adequate, just and equitable in the circumstances.
33      The date for determination of this issue is August 15, 2011, the date of the testator’s death, and the court should consider the circumstances that were existing and reasonably foreseeable by the testator on that date: Landy v. Landy Estate, [1991] B.C.J. No. 3326 (B.C. C.A.).
34      The value of the estate is approximately $487,776 and consists of the testator’s half interest in the Spellman property which was valued at $266,000 (one-half of the assessed value of $532,000), his RRSPs, money invested in a mutual fund and his vehicles and personal property, including his interest in three time shares the plaintiff and testator owned which are of unknown value.
36      Upon the testator’s death, the plaintiff received the balance the funds in a jointly held bank account, the time shares, two vehicles and his interest in the personal property and furnishings of the Spellman property. She also received, independently of the will, the proceeds of his pension and survivor’s benefit which together currently amount to $1,800 per month and the proceeds of a life insurance policy in the amount of $90,000. Taken together with her significant annual salary, the defendants argue that the testator made adequate, just and equitable provision for the plaintiff. I accept that the plaintiff is not in need of financial benefit from the estate. She accepts that and bases her Wills Variation Act claim on the testator’s moral obligation to her, not a legal one.
37      The plaintiff relies in part on Rose v. Bloomfield, 2010 BCSC 315 (B.C. S.C.) where the court awarded a common law wife 70% of the estate. The plaintiff submits that in circumstances such as this, the court should have regard and be guided by the principles set out in the Estate Administration Act, R.S.B.C. 1996, c. 122.
38      The defendants submit that the proper approach is to determine the testator’s legal obligations to the plaintiff under the Family Relations Act, R.S.B.C. 1996, c. 128, as was done in Houston v. Houston Estate.
39      The defendants argue that Rose is distinguishable on the ground the parties in that case were in a common-law relationship and not a marriage. The defendants say the court in Rose relied on Picketts v. Hall Estate, 2009 BCCA 329 (B.C. C.A.) where the court was dealing with the obligations of a testator in a common-law relationship. The court in Rose quoted these paragraphs from Picketts in reaching its decision:
“[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 …”
40      In Hecht v. Hecht Estate, [1991] B.C.J. No. 2531 (B.C. S.C.), the court did not fully accept that the Estate Administration Act should be used as a guide to the amount to be awarded a surviving spouse in an application to vary a will. In that case the court said:
Thus, in my view, in determining whether the plaintiff has received adequate maintenance and support, the standard is not set by the amount which the plaintiff would have taken on intestacy.
41      The position of the plaintiff is that the court should take guidance from the decision in Rose to prefer a spouse over other beneficiaries of the will. The defendants submit that guidance should come not from the Estate Administration Act, but from the Family Relations Act or the Divorce Act as the parties had been separated for two years when the testator made his final will. Courts in British Columbia have not fully accepted that premise either. In Bates v. Bates, [1982] B.C.J. No. 2296 (B.C. C.A.), Seaton J.A. referred to Barker v. Westminster Trust Co., [1941] B.C.J. No. 4 (B.C. C.A.) and said:
On the basis of that decision it has been argued that where a person provides for his wife as well as or better than she would be provided for under the Administration Act then there should be no order made under the Wills Variation Act in her favour. That argument is aided by the contention that the Courts favour wills over an intestacy. I do not find that argument convincing. I think that the test laid, down in the Wills Variation Act is sufficient expression of the legislative will, and the threshold test of course is whether or not the testator made adequate provision for the proper maintenance and support of his wife. There is another case cited to us in the same argument upon which I would like to comment: Richards v. Person, January 20, 1982, Vancouver Registry A792562. In that case which was under the Wills Variation Act, the learned trial judge referred to the Family Relations Act and said at page 5:
Counsel for the daughter and her sons says it would be improper for a Court to have regard to the statutory policy governing distribution of matrimonial assets inter vivos, as laid down by the Family Relations Act, in considering what would be a just and equitable distribution on death. Counsel argues that the Court ought not to look for help to other statutes, which do not directly deal with the question in issue, in determining the contemporary attitude or ‘common sense of the community’.
It seems to me that where, as here, the court is vested with broad discretion, and required to do that which appears just, it ought always to seek guidance by reference to contemporary custom, and particularly to those rules which the community has adopted as part of the statute law. Where the community has declared that spouses should, prima facie, share certain assets equally on a divorce or voluntary separation, that is something which a Court can hardly ignore in deciding what allocation of such assets would be ‘adequate, just and equitable’ upon death.
To that I say what a spouse’s duty is during that spouse’s lifetime may be quite different than the duty upon death. The Family Relations Act is there to divide assets between two living persons both of whom will need to be supported in the future and will need capital in the future. That is not the situation under the Wills Variation Act and I see no guidance that can be obtained from the Family Relations Act when considering the position of the parties under the Wills Variation Act.
42      In Tataryn, McLachlin J. stated at para. 33:
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.
43      Thus, it seems to me that in deciding whether to vary the testator’s will, the court should consider the various options, including what might happen on an intestacy or upon the separation of spouses, but the primary guidance is to be found in the words of the Wills Variation Act as applied to the facts and circumstances of the case under consideration.
44      The plaintiff submits that if the principles found in the Estate Administration Act are applied in the circumstances of this case, the will should be varied to effectively restore the 1999 will that left almost all of the estate to the plaintiff. The defendants submit that if the principles of family law are applied the will should be left as it is.
45      The defendants say that the plaintiff is well-employed and earns a substantial income. The testator, on the other hand was disabled and throughout their marriage he earned significantly less than she did. If they had formalized their separation, it is likely that the testator would have been entitled to spousal support. Had they divided their family assets, the testator would have been entitled to at least the value of one-half of those assets. The defendants say the testator would have been free to distribute those assets under the will as he chose.
46      The defendants distinguish Tataryn on the facts. Ms. Tataryn was not as independent and well-employed outside the home as the plaintiff is. Thus, viewed as though the parties had chosen to separate their assets and become independent of each other, the defendants submit the will should not be disturbed. While I am sympathetic to that submission, it must be emphasized that is not what the parties here chose to do.
47      A great deal of emphasis has been placed on the care and comfort provided by the defendants and others who provided care and comfort for the testator as opposed to what the plaintiff did for the testator. The thrust of the defendants’ submission is that the plaintiff chose to leave the testator when he needed her and the defendants stepped in to provide for the testator’s needs. Against that, the plaintiff says in her evidence that while she did not live with the testator in the last two years of his life, they maintained a good relationship and she provided him with financial assistance and personal support.
48      The plaintiff also relies on what she says was an understanding, perhaps an agreement, that the joint tenancy respecting their home would remain in place. It was known to both that the testator did not have long to live. In 1999, they had made reciprocal wills with each of them leaving their entire estate to the other. It appears that the testator accepted the understanding that they would leave their wills and the title to the Spellman property as they existed at the date of separation as he did not interfere with the joint tenancy or his earlier will until just before he died.
49      During the two year period following the separation of the plaintiff and the testator, they continued their financial arrangements much as they had done during the time they lived together. The testator did not alter his will nor did he make any attempt to sever the joint tenancy. Except for one account which they divided equally, they kept things as they were. They did attend together at an agency known as Fairway Divorce, presumably to discuss their separation. However, no further steps were taken by either of them to make changes to their wills or to prepare a formal separation agreement or seek an order of divorce.
50      The grim reality of the testator’s condition must have been well known to both of them. No doubt the testator was upset and hurt when the plaintiff told him she planned to separate. Nevertheless, he accepted the situation without feeling any need to formalize the separation or to take steps to divide their property. It appears he was content to live in the house knowing that his will named the plaintiff as the beneficiary and that when he died she would obtain his interest in the Spellman property through the joint tenancy. Still, he did nothing to change the situation until two years later. Even then, there is evidence he had a change of heart just before he died. While the evidence consists only of his solicitor’s notes, the circumstances are such as to lend credibility to the notes and I find the notes to be a reliable indicator of the testator’s intentions just prior to his death.
51      There can be no doubt that the defendants and others contributed a significant amount of personal care. I conclude this was done out of friendship and their affection for the testator. It was care and comfort that was generously given without thought of compensation. I am satisfied on the evidence that the changes the testator made to his will and to the title of the Spellman property were done in recognition of that care and there is no suggestion that any of the defendants suggested to the testator that he should make the changes he did. While several of the defendants clearly do not accept that the plaintiff spent much time with the testator or provided much care for him, I do not accept that they put any pressure upon him to change his will or the title to his home.
52      The plaintiff did provide some financial support to the testator following their separation. It appears that it may well have been at a level that is less than what might have been obtained by means of a court application, but there is also evidence that the plaintiff paid expenses associated with the property. I also accept her evidence that she and the testator had at least initially agreed to keep their financial affairs as they were so that the home they had purchased and improved together would be given to the plaintiff.
53      As I have already noted, there was an indication he regretted his decision to alter his will and provided instructions to his lawyer to transfer the Spellman property back to joint tenancy between him and the plaintiff. Shortly after that he died.
54      In determining whether the testator fulfilled his moral obligations to the plaintiff, I take into consideration the following factors. They are not listed in any particular order of importance.
55      The plaintiff had an expectation that she would receive the testator’s interest in the Spellman property by means of the joint tenancy. The plaintiff and testator had always held the property as joint tenants before they separated and they continued to do so until just a few months before the testator died.
56      The plaintiff and the testator had purchased the property together and worked together to improve it over the years they lived there. The plaintiff said that the testator expressed the wish that she would live there after he died.
57      Most of the assets the testator had accumulated were acquired or saved while he and the plaintiff lived together. They treated their incomes as family incomes and they treated their financial resources as family assets. The testator took no steps to remove the plaintiff as the beneficiary of a life insurance policy or his pension.
58      The circumstances faced by the testator and the plaintiff were difficult and painful. While many of the testator’s friends likely take a somewhat “hard” view of the plaintiff’s decision to separate from the testator, she said that he had become verbally abusive towards her and had changed their relationship. This was likely attributable to his illness and his steadily deteriorating condition. It is easy to be critical of the plaintiff, but only she and the testator knew the true circumstances of their relationship. It must also be remembered that they had a long and happy relationship that remained at least civil if not cordial for many months after they separated.
59      While the plaintiff kept her own RRSPs and acquired some of their joint property even under the testator’s new will, the testator’s earlier will left almost everything to her. I acknowledge that she has a high income, and to that extent she was not dependent upon the testator, and I conclude that she and the testator seemed to have a long understanding that she would become the owner of their home upon his death.
60      I also take note that the plaintiff provided care for the testator for the 9-year period from the time of his diagnosis in 2000 until the date of separation. She was supportive and caring during that period of time. The evidence of the plaintiff, which is supported by the defendants, is that the testator was reluctant to accept the care he needed. Instead he tried to maintain his independence even though his condition was steadily worsening. The plaintiff took a temporary leave of absence from her employment to provide more extensive care and she did not pursue a career opportunity that would have taken her away from the Victoria area.
61      The testator clearly wanted to acknowledge the care and comfort that was provided to him by his friends. They provided care and assistance to him even before his separation and were much more helpful afterwards. He clearly appreciated all of the many things they did for him.
62      On the facts and circumstances of this case, I find that the testator had a moral obligation to the plaintiff to recognize at least her long-standing interest in the Spellman property. By changing his will and severing the joint tenancy, I find that he has failed to fulfill that moral obligation and has therefore not made adequate, just and equitable provision for the plaintiff.
63      The submission of the plaintiff is that the will should be varied to provide her with 70 – 75% of the total value of the estate. The submission is that variation in those terms would allow her to keep the Spellman property, plus something from the residue of the estate. In my view, the proper variation is to vary the testator’s will to provide the plaintiff with an award that recognizes her history and relationship with the testator, but leaves sufficient money available in the estate to recognize the gifts the testator wished to leave to others. It may be that what the plaintiff receives will not be sufficient to retain the Spellman property and it will have to be sold.
64      It is with that objective in mind I find that the testator did not make adequate, just and equitable provision for the plaintiff in that he neglected his moral duty to honour the arrangement they had made prior to his death. The testator maintained the title to the Spellman property in joint tenancy with the plaintiff for almost two years after separation before deciding to change the title so that it was held as tenants in common. He kept the terms of his will unchanged for the same period of time. While there is no issue that he had full mental capacity when he did so, the steady and serious deterioration of his health was no doubt a strong factor in the feelings of resentment toward the plaintiff that were reflected by the changes he made.

I therefore order that the will be varied to provide the plaintiff with 50% of the net value of the estate after payment of expenses and taxes. As Deborah Tippett has assigned her interest in the estate to the plaintiff, that may serve to make the next steps in the processing of the estate somewhat less complicated. There are other defendants who have assigned their interest to the plaintiff and I wish to make clear that the plaintiff is entitled to those assigned interests in addition to the 50% I have allowed. However, I expect that difficulties will emerge in dealing with the remaining beneficiaries and the parties have liberty to apply to speak to any issue that arises.

67      As to the remaining 50%, I direct that the estate is to be divided equally among the individual defendants and the named charities. In view of my conclusion that the will should be varied under the Wills Variation Act, I do not find it necessary to decide the plaintiff’s claims of unjust enrichment and constructive trust.
68      I recognize that the variation I am ordering effectively reduces the share of the charities. The variation of the will reduces the defendants’ share of the estate so as to provide for the plaintiff. It recognizes the testator’s obvious wish to benefit his friends and so that the impact of the variation of the will falls more or less evenly on each of the defendants.

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