Practice Material on Wills

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Professional Legal Training Course 2021

Practice Material Wills

Recent Contributors: Allison A. Curley Denese Espeut-Post Deidre J. Herbert J. Jeffrey Locke Hugh S. McLellan

Practice Material Editor: Katie McConchie

September 2021

A requirement for admission to the bar of British Columbia, the Professional Legal Training Course is supported by grants from the Law Society of British Columbia and the Law Foundation of British Columbia. © 2021 The Law Society of British Columbia. See lawsociety.bc.ca > Terms of use.

WILLS CONTENTS

WILLS AND INTESTATE SUCCESSION

[§1.01] The Estate 1 [§1.02] Disposition of Property by Will 2 [§1.03] Disposition of Property on Intestacy 2 1. Consequences of Intestacy 2 2. Intestacy Under WESA 3 3. Intestacy Under the Indian Act 5 [§1.04] Further Reading 6

FORMAL VALIDITY OF WILLS AND INTERPRETING WILLS [§2.01] Formalities 7 [§2.02] Curing Formal Deficiencies in a Will 7 [§2.03] Conflict of Law 8 [§2.04] Wills by Indigenous People 8 [§2.05] Revoking a Will 8 [§2.06] Altering a Will 9 [§2.07] Republishing and Reviving a Will 10 [§2.08] Special Types of Wills 10 1. Mutual Wills 10 2. Holograph Wills 10 [§2.09] Testamentary Gifts—Lapse and Ademption 11 1. Types of Gifts 11 2. Ademption 11 3. Lapse 11

TESTAMENTARY CAPACITY

[§3.01] Introduction 12 [§3.02] Capacity of Minors 12 [§3.03] Test for Mental Capacity 12 [§3.04] Types of Cases 13 1. Delusions 13 2. Dementia 13 [§3.05] Burden of Proof—Testamentary Capacity 13 [§3.06] Knowledge and Approval 15

(ii)

[§3.07] Suspicious Circumstances 16 1. Test 16 2. Burden of Proof 17 [§3.08] Undue Influence 18 1. Test 18 2. Burden of Proof 18 [§3.09] Declaring Wills Void Under the Indian Act 19 [§3.10] Further Reading 19

PREPARING A WILL

[§4.01] Introduction to Preparing a Will 20 [§4.02] Taking Instructions 20 1. Taking Instructions Directly 20 2. Making Notes of the Meeting 20 3. Obtaining Background Information 21 4. Ascertaining the Assets and Liabilities 21 5. Providing Basic Information to the Client 21 6. Naming Executors and Trustees 22 7. Naming Beneficiaries 24 8. Tax Considerations 25 9. Naming Guardians 25 10. Enduring Powers of Attorney, Representation Agreements and Committeeship 26 11. Using a Memorandum 29 [§4.03] Circumstances Requiring Special Consideration 30 1. Homestead or Dower Legislation 30 2. Restrictions on Alienation 30 3. Life Insurance Declarations 30 4. Registered Retirement Savings Plans and Similar Assets 30 5. Charitable Gifts 30 6. The Rule Against Perpetuities 31 7. Termination, Revocation and Variation of Trusts 31 8. Beneficiaries Receiving Disability Assistance 32 [§4.04] Practical Tips for Drafting the Will 32 1. Planning for Contingencies 32 2. Language Use 32 3. Numbering, Headings and Order 33 4. Organizing the Contents of the Will 33 5. Drafting Dispositive Clauses 34 6. Capital and Stirpital Distributions 35 7. Clauses Benefiting the Executor and Trustee 38 8. Common Drafting Pitfalls 38 [§4.05] Will Execution Procedures 39 [§4.06] Post-Execution Procedures 39 1. Wills Notices 39 2. Wills Storage 39 3. Reporting to the Client 40 4. Destroying Prior Wills and Will Files 40

(iii)

5. Releasing a Will From Safekeeping 40 6. Releasing a Wills File 40 [§4.07] Further Reading 40

CLAIMS MADE AGAINST AN ESTATE

[§5.01] Introduction 41 [§5.02] Challenges to a Will 41 [§5.03] Claims Against an Estate on Intestacy 41 [§5.04] Claims Against an Estate by Unrelated Parties 42 [§5.05] Claims for Unjust Enrichment 42 1. Unjust Enrichment 42 2. Quantum Meruit 42 3. Constructive Trusts 42 4. Case Law Examples 43

SOLICITORS’ DUTIES AND RESPONSIBILITIES

[§6.01] Duty of Care in Taking Instructions 44 [§6.02] Duty of Care to Beneficiaries 45 1. Disappointed Beneficiaries of Failed Gifts 45 2. Disappointed Beneficiaries Not Provided For 45 3. Disappointed Beneficiaries Disinherited 46 [§6.03] Common Errors 47

APPENDICES—NOT AVAILABLE IN ONLINE VERSION Appendix 1 – Special Testimonium Clauses 48 Appendix 2 – Execution Instructions Letter 52 Appendix 3 – Will Planning Information Sheet 53 Appendix 4 – Sample Specimen Trust Will 58

PROBATE AND ESTATE ADMINISTRATION

INITIAL ADVICE TO PROSPECTIVE PERSONAL REPRESENTATIVE

[§7.01] Introduction 63 [§7.02] Identification of the Personal Representative 63 [§7.03] Deciding Whether to Act as a Personal Representative 63 [§7.04] Immediate Responsibilities of a Personal Representative 64 1. Disposition of Remains 64 2. Care and Management of Assets 64 3. Dealing With Liabilities 65 4. Preparing to Administer the Estate 65

(iv)

5. Accounting and Expenses Prior to the Grant 65 6. Safety Deposit Boxes 65 [§7.05] Preparing to Make the Application for Probate or Administration 65 1. Gathering Information 65 2. Reviewing the Will and Advising 67 3. Intestacy, Lapse and Ademption 67 4. Choice of Applicant for Letters of Administration 67 5. Other Grants of Administration 68 6. Murder 68 7. Survivorship 68 8 Presumption of Death 68 9 Other Duties and Powers of Executors and Administrators 69 10. Scope of Lawyer’s Retainer 69 11. Insolvent Estates 70 12. Estates of Indigenous People 70 [§7.06] Public Guardian and Trustee as Official Administrator 70 [§7.07] Guardians and Committees 70

ASSETS AND LIABILITIES: VALUATION AND INVENTORY

[§8.01] Introduction 71 [§8.02] Purpose of the Inventory 71 [§8.03] Assets and Liabilities 71 1. Property Passing in the Will 71 2. Property Passing Outside the Will 71 3. Liabilities 72 [§8.04] Form of Inventory 72 [§8.05] Valuation 72 [§8.06] Authorization to Obtain Information 73

DEVOLUTION OF ASSETS

[§9.01] Types of Assets 74 [§9.02] Assets Not Passing to the Personal Representative 74 1. Joint Tenancies 74 2. Life Insurance Policies and Proceeds 74 3. Pensions and Retirement Plans 75 4. Imminent Death Donation 75 5. Powers of Appointment 75 6. Employment Benefits 75 7. Contractual and Other Obligations 76 8. Insolvent and Bankrupt Estates 76 9. Statutory Benefits 76 10. Voluntary Payments 76 11. Family Property 76 12. Community of Property 76 13. Interests in Trusts 76 14. Designated Beneficiary Investments 76

(v)

[§9.03] Assets Passing to the Personal Representative 76 [§9.04] Conflict of Laws 76 1. Immovables 77 2. Movables 77 [§9.05] Location of Assets 77

APPLICATIONS FOR PROBATE AND ADMINISTRATION

[§10.01] Introduction 78 [§10.02] Jurisdiction 78 [§10.03] Practice 78 [§10.04] Place and Time of Application 78 [§10.05] Probate Applications 79 1. Documents Required for a Typical Probate Application 79 2. Other Affidavits May Be Required 79 3. Procedure 80 4. Probate Fees 80 5. Notice Required Under WESA 81 6. Variations of Grant — Executor Cannot Act 83 7. Special Forms of Probate 84 [§10.06] Administration Applications 85 1. Documents for Typical Administration Application 85 2. Procedure 85 3. Intestate Successor Not Consenting to Application 85 4. Other Grants of Administration 86 5. Security for Grant of Administration 86

OTHER APPLICATIONS IN THE COURSE OF ADMINISTRATION

[§11.01] Introduction 87 [§11.02] Rectification and Construction of Wills 87 [§11.03] Probate Jurisdiction: Rectification of Will 87 1. Addition of Words 87 2. Application of WESA s. 59 87 3. Procedure 87 [§11.04] Construction Jurisdiction: Interpreting a Will 88 1. General 88 2. Ascertaining the Will-Maker’s Intent 88 3. Judicial Approaches 88 4. Rules of Construction 89 5. Procedure 89 [§11.05] Curing Deficiencies 89 [§11.06] Application for Advice and Directions 90 [§11.07] Dispute Resolution 90 1. Disputes Among Executors and Trustees 90 2. Removing an Executor or Trustee 90

(vi)

[§11.08] Other Applications 91 1. Giving Trustees New Powers 91 2. Cy-près 92 3. Distribution Under Direction of Court 92 [§11.09] General Supervisory Jurisdiction of the Court 92

TRANSMISSION AND TRANSFER OF ASSETS

[§12.01] Introduction 93 [§12.02] Executor’s Year 93 [§12.03] Legislation Affecting Transfer of Assets 93 1. Delay of Distribution Under WESA 93 2. Wills Variation Under WESA 93 3. Income Tax Act 94 4. Intestacies 94 [§12.04] Transmission and Transfer Procedures 95 1. General 95 2. Real Property 95 3. Personal Property 95

CREDITORS

[§13.01] Introduction 98 [§13.02] General 98 1. General Duties of the Representative Relating to Creditors’ Claims 98 2. Types of Creditors’ Claims 98 3. Defences to Creditors’ Claims 99 [§13.03] Liabilities of the Deceased 99 1. Contingent or Continuing 99 2. Unenforceable or Statute-Barred 99 3. Family Creditors 99 4. Pledges 100 5. Spousal and Child Support 100 6. Creditor or Debtor a Beneficiary or Executor 100 [§13.04] Liabilities Relating to the Death: Funeral Expenses 100 [§13.05] Liabilities Incurred by the Personal Representative 101 [§13.06] Administering the Liabilities 101 1. Instructions and Retainer 101 2. Searches and Inquiries 101 3. Proof of Claims 102 4. Compromise of Claims 102 5. Payment of Liabilities 102 6. Distribution Under Direction of Court 103 7. Insolvent Estates 103

(vii)

TAX CONSEQUENCES RESULTING FROM THE DEATH OF A TAXPAYER

[§14.01] Duties of Executors, Administrators and Trustees 104 1. Returns 104 2. Clearance Certificates 106 [§14.02] Beneficiaries 106 1. General 106 2. RRSPs 107 3. Death Benefits 107

[§14.03] Exceptions to the General Rules Outlined Above 108 1. Spouses and Spousal Trusts 108 2. Farm Property 108

ACCOUNTS

[§15.01] Introduction 110 [§15.02] Duty to Account 110 [§15.03] Requirement to Pass Accounts 110 [§15.04] The Accounts 110 [§15.05] Tax Considerations 111 [§15.06] Approval of Accounts 111 [§15.07] Discharge of Personal Representative 112

REMUNERATION OF PERSONAL REPRESENTATIVES AND TRUSTEES

[§16.01] Introduction 113 [§16.02] Entitlement to Remuneration 113 [§16.03] Amount of Remuneration 113 [§16.04] Expenses 114 [§16.05] Procedure and Payment 114

LAWYER’S REMUNERATION

[§17.01] Introduction 116 [§17.02] Entitlement to Remuneration 116 [§17.03] Lawyer’s Services 116 1. Services Relating to Non-Estate Assets 116 2. Responsibilities of the Personal Representative 117 3. Legal Services 117 [§17.04] Assessment of Account 117 [§17.05] Further Reading 117

(viii)

PROBATE PROCEEDINGS

[§18.01] Introduction 118 [§18.02] Actions and Procedures Before the Grant 118 1. Notice of Dispute 118 2. Citations to Apply for Probate 119 3. Subpoena for Testamentary Document or Grant 119 4. WESA, s. 123 119 5. Curing Deficiencies in the Execution, Alteration, Revocation or Revival of a Will 120 6. Proof in Solemn Form 120 [§18.03] Actions and Procedures After the Grant 121 1. Revocation Applications 121 2. Rectification 122

VARIATION OF WILLS

[§19.01] Introduction 123 [§19.02] Jurisdiction 123 1. Requirements 123 2. Forum 125 3. Limitation Period 125 [§19.03] Procedure 125 1. Commencement and Service 125 2. Parties 125 3. Representative Actions 125 4. Special Considerations With Respect to Land 125 5. Settlement 126 6. Evidence 126 7. The Order and Costs 126 8. Appeals, Variations and Rescissions 126 [§19.04] Role of the Executor 127 [§19.05] Duty to Make Adequate Provision 127 1. Generally 127 2. Factors to Consider 128 3. Relevant Date for Determining Adequacy of Support 130 [§19.06] Circumstances Precluding Relief 131 1. General 131 2. Actions by Spouses 131 3. Actions by Children 131 [§19.07] Determination of Quantum 133 1. General 133 2. Relevant Factors to Consider 134

1 The transitional rules of WESA state that the intestacy Chapter 1 rules, the estate administration rules, and the fundamen- tal rules (including definitions, construction of instruments, and survivorship rules) apply to deaths occurring Wills and Intestate Succession1 after March 31, 2014. Deaths prior to this date are governed by the now-repealed legislation that was in force at the time of the death. Succession laws are concerned with the transfer of real Part 4 of WESA, which relates to wills, applies to a will, and personal property from one person to a successor. whenever made, if the will-maker died on or after March The area of succession law can include wills, intestate 31, 2014. However, WESA’s transitional provisions will succession, gifts, inter vivos trusts (created during the not invalidate a will validly made before March 31, donor’s lifetime), and other estate planning tools. 2014, or revive a will validly revoked before that date. Effective estate planning involves organizing a client’s The Lawyers Indemnity Fund cautions that wills practice affairs so as to realize the client’s goals both for the and estate planning is a challenging area of the law, with client personally and for the client’s heirs, during the many pitfalls for the inexperienced lawyer. Lawyers who client’s lifetime and after death. The Practice Material: dabble in wills and estates law may expose themselves Wills deals only with wills and intestate succession. It is to negligence claims. Lawyers should only practice in divided into two main parts: this area when they have the skill and knowledge neces- (1) Chapters 1–6 deal principally with wills—what sary to do a good job. In other words, do not practice in they are, their formalities, their planning and this area of the law unless you are prepared to apply the their drafting. same degree of diligence and care that you would apply to any other. (2) Chapters 7–19 deal with probate and administration of an estate. [§1.01] The Estate The whole area of wills and estates has undergone a significant revision since the Wills, Estates and Succession When a person dies, that person’s assets fall into one of Act, S.B.C. 2009, c. 13 (“WESA”) came into force on two general categories: March 31, 2014. WESA repealed and replaced the Estate (1) assets that were the deceased’s property and Administration Act, R.S.B.C. 1996, c. 122; the Probate form part of the deceased’s estate; and Recognition Act, R.S.B.C. 1996, c. 376; the Wills Act, R.S.B.C. 1996, c. 489; and the Wills Variation Act, (2) assets that may or may not have been the de- R.S.B.C. 1996, c. 490. The revisions in WESA reflect ceased’s property but which do not form part of acceptance of many of the recommendations of the Brit- the deceased’s estate, and which are distributed ish Columbia Law Institute contained in its Report on by the operation of law. Wills, Estates and Succession, B.C.L.I. Report No. 45 Only property that forms part of the deceased’s estate (June 2006). will be distributed under the terms of the will or under Among many other changes to practice, WESA required the scheme of intestate succession. Therefore, to advise a substantial changes to probate procedures under the Su- client properly and to draft the client’s will, the lawyer preme Court Civil Rules, B.C. Reg. 168/2009 (the must understand how the client owns property and “SCCR”). Certain pre-WESA rules were repealed and whether that property will form part of the client’s estate replaced by the new SCCR Part 25–Estates (under B.C. upon death. Reg. 149/2013). WESA also resulted in new forms deal- Property that is subject to the terms of a will is said to ing with probate and estate administration. “pass” by the will and generally includes all assets over which the client has complete dominion, control, and beneficial interest. Such assets might include the following:

1 Updated by Hugh S. McLellan of McLellan Herbert in March (a) tangible personal property (for example, 2021. Previously updated by Denese Espeut-Post (2018 and furniture, artwork, jewellery and vehicles); 2019); PLTC (2006-2017); Helen Low (2005); and Ross Tunni- cliffe (1994–2001). Reviewed by Roger D. Lee in 2002 for con- (b) intangible personal property (for example, tent relating to the Indian Act. Reviewed by Halldor Bjarnason stocks, bonds, investment certificates, bank ac- in 2002 for content relating to persons with disabilities. Prepared counts, and choses in action); and for PLTC in 1990 by a committee consisting of Gordon B. MacRae, Mark Horne, Ross Tunnicliffe and Sandra K. Ballance, (c) real estate interests (for example, fee simple or drawn in part from articles written for CLE by Professor Do- leasehold interests). novan W.M. Waters, QC; J. Albert Bruce, QC; Peter Bogardus, QC; William C. Bice, and Sandra K. Ballance.

Wills 2 It is important to distinguish property that a client owns (i) Some types of investments, such as segregated directly from property that the client owns indirectly. funds and-Tax-Free Savings Accounts, allow the For example, a client may purport to gift a parcel of land owner of the investment product to specify a in her will, but the land may actually be held by a com- beneficiary, in which case the proceeds pass to pany that she owns. In this case, the client may only di- the beneficiary on the death of the owner. rect that the shares of the company be gifted under the Note that other laws may affect the distribution of the will, because she has no authority, in her personal capac- assets of an Indigenous person upon death. Section 42– ity, to directly transfer ownership of the land itself. 50 of the Indian Act, R.S.C. 1985, c. I-5, may apply to Property that does not form part of the deceased’s estate “matters and causes testamentary” when the deceased is upon death does not “pass” by a will and is not subject to a registered Indian who was “ordinarily resident” on re- the scheme of intestate succession. This is property that serve or Crown land. Division 3 of WESA also deals the client may or may not own but which is distributed with some First Nations and Nisga’a property. to others by the operation of law upon death. This subject is discussed in more detail in §9.02; below are some [§1.02] Disposition of Property by Will examples. In order for a will to be effective the will-maker must (a) Property held in joint tenancy passes to the sur- have: viving joint tenant by operation of the right of survivorship, subject to the 5-day survival rule (a) intended the will to have a dispositive effect; in s. 10 of WESA (that is, only if the surviving (b) intended that the will not take effect until after joint tenant lives for at least 5 days after the de- death and be entirely dependent on death for its ceased’s death). (But be cautious in applying operation; this principle, as the facts may give rise to a presumption of a resulting trust in favour of the es- (c) intended for the will to be revocable (and it in tate: see §9.02). fact must be revocable); and (b) Proceeds of a life insurance contract pass to the (d) executed the will in accordance with the formal beneficiary designated under that contract, be- requirements of WESA (see Chapter 2 for a more cause of the Insurance Act, R.S.B.C. 2012, c. 1. detailed discussion of these requirements). (See §7.05(7) for more on this rule, including Dying with a will (also referred to as dying “testate”) exceptions.) does not necessarily mean that the will-maker’s property (c) A refund of premiums contributed to an RRSP, is going to be distributed according to the wishes set out RRIF, or pension plan passes to the beneficiary in that will. A court could find that all or a portion of a designated under that plan, because of the Law will is invalid for some reason, and the rules of intestacy and Equity Act, R.S.B.C. 1996, c. 253. will dictate the distribution of the affected property. Similarly, if the will fails to dispose of all of the will- (d) Property that is subject to contractual obligations maker’s property; the rules of intestacy will determine limiting the client’s right to alienate that proper- the distribution of the omitted property. ty passes under the terms of that contract. For instance, property may be subject to a marriage In some situations, a court may agree to vary the terms agreement, separation agreement, or sharehold- of the will. (For more information on wills variations, ers’ buy-sell agreement. see Chapter 19.)

(e) Gifts of property that are conditional on death [§1.03] Disposition of Property on Intestacy (donatio mortis causa) pass to the donee. See Costiniuk v. Cripps Estate, 2000 BCSC 1372, 1. Consequences of Intestacy affirmed 2002 BCCA 125, for a discussion of circumstances that must be met for an effective When a person in British Columbia dies without a donatio mortis causa. will, that person is said to have died “intestate.” When a person dies leaving a will that does not ful- (f) Property subject to division under the Family ly dispose of the estate, and the part that is not dealt Law Act or some other matrimonial property re- with by the will is not otherwise the subject of a gime may pass to the surviving spouse directly. gift, that person is said to have died “partially intes- (g) Property that is subject to an equitable claim, tate.” In both cases, the statutory rules about intes- such as a claim of unjust enrichment, or the im- tacy govern who is entitled to share in that estate. position of a constructive trust, passes according There are several consequence of dying without a to the finding of claim. (See §5.05.) will. Some of these consequences can lead to prob- (h) Cultural property of a Nisga’a citizen may be lems for the intestate successors, particularly if they subject to a proceeding under WESA.

Wills 3 are not addressed in the process of distributing as- The deceased’s relatives would inherit on intestacy sets. The following are possible consequences. in the following order, where the deceased (“D”) dies leaving no will and no spouse (s. 23): (a) Beneficiaries who are receiving assistance under the Employment and Assistance for Per- 1. D’s children; sons with Disabilities Act and Regulation may 2. D’s grandchildren: become disentitled to benefits if they receive 3. D’s further lineal descendants; assets from the estate that result in the benefi- 4. D’s parents; ciary’s assets exceeding certain thresholds—a consequence that can be avoided through es- 5. D’s parents’ children (D’s siblings); tate planning (also see §4.03). 6. D’s nieces and nephews; 7. D’s great-nieces and nephews; (b) If a person who dies intestate owns real property in a jurisdiction other than where 8. D’s grandparents; they are domiciled at death, the real property 9. D’s grandparents’ children (D’s aunts and will be distributed according to the rules of the uncles); jurisdiction where it is located, and personal 10. D’s cousins; property will be distributed according to the 11. D’s great-grandparents, and rules of the jurisdiction where the person was 12. D’s great-grandparents’ children. domiciled. (c) If an intestate has children, a surviving spouse This table summarizes the intestacy scheme under is not entitled to the intestate’s entire estate, WESA: which may be problematic if the surviving spouse needs significant support from that Section Dies Leaving Distribution estate. 20 spouse and no de- entire estate to spouse (d) If the person who dies without a will has an scendants intestate successor who is a minor or is men- 21(2) & spouse and to spouse: preferential share tally incompetent, the Public Guardian and 21(3) descendants of intes- of $300,000; household fur- Trustee must be notified and may assume re- tate and spouse nishings of the spousal home sponsibility of the intestate successor’s distri- and right to acquire spousal bution, resulting in a loss of control of the dis- home from estate for 180 tribution and additional costs. days after representation grant (e) Assets that can roll over to a spouse on a tax- deferred basis, subject to limited circumstanc- residue: one-half to spouse; es, generally cannot be rolled over to children one-half to intestate’s de- on a tax-deferred basis, which, in the case of scendants pursuant to s. 24 intestacy, may result in a taxable gain and lia- (s. 24 is discussed later in bility for estate tax. this chapter). (f) An intestate loses the ability to select a guard- 21(2) & spouse and to spouse: preferential share ian for minor children (unless the intestate has 21(4) descendants of intes- of $150,000; household fur- done so under the Family Law Act). (See tate but not spouse nishings of the spousal home; and right to acquire spousal §4.02(9) for more on naming guardians.) home from estate for 180 (g) An intestate will be unable to set trust condi- days after representation tions for minor children. (See §4.02(7)(d) for grant more on trust conditions for minor children.) residue: one-half to spouse; one-half to intestate’s de- 2. Intestacy Under WESA scendants pursuant to s. 24 In British Columbia, Part 3 of WESA sets out the 22 more than one spousal share divided as the mandatory legislative scheme for distribution (ex- spouse spouses agree or as deter- cept where the regime under the Indian Act applies, mined by the court discussed in the next subsection). 23(2)(a) descendants but no equally among the descend- The scheme of intestate distribution in WESA is spouse ants, pursuant to s. 24 called “parentelic” distribution. [This table continues on the next page.]

Wills 4 Section 22 addresses the situation where there are [This table is continued from the previous page.] two or more spouses. If there is more than one Section Dies Leaving Distribution spouse, the spouses share in such proportions as 23(2)(b) parents but no de- equally to surviving parent or they agree to or, if they cannot agree, in the propor- scendants parents tions determined by the court to be just. Part 3, Division 2 (ss. 26–35), provides some spe- 23(2)(c) descendants of par- equally to the descendants of cial devolution rules regarding a spousal home ents (deceased’s sib- the intestate’s parents or when a spouse dies intestate and the spousal home lings) but no de- parent is not the subject of a gift or otherwise disposed of scendants or parents by a will. A surviving spouse has a right to acquire the spousal home from the estate for a period of 23(2)(d) grandparents or de- equally to surviving grand- 180 days after the representation grant is issued, scendants of grandparent(s) or, if any grandpar- unless the time period is extended by the court. The parents (deceased’s ent is no longer surviving, surviving spouse may acquire the spousal home to aunts, uncles, or cous- that part to descendants of satisfy, in whole or in part, the surviving spouse’s ins) but no descend- the deceased grandparent interest in the estate. ants, parents, or descendants of parents Section 24 deals with distribution to the descendants of a person. “Descendant” is defined as all lin- 23(2)(e) great-grandparents or equally to surviving great- eal descendants of that person through all genera- descendants of great- grandparent(s) or, if any tions, so it seems to have the same legal meaning as grandparents, but no great-grandparent is not sur- the term “issue.” Section 24(1) sets out how the descendants, parents, viving, that part to descend- number of shares is determined: grandparents, or de- ants of the deceased great- (1) When a distribution is to be made under this scendants of grand- grandparent Part to the descendants of a person, the property parents that is to be so distributed must be divided into a number of equal shares equivalent to the number Under WESA s. 2, “spouse” includes persons who of have lived together in a marriage-like relationship for at least 2 years, regardless of their sexual orien- (a) surviving descendants, and tation or gender identity. The definition of a (b) deceased descendants who have left de- “spouse” grants common law spouses the same en- scendants surviving the person, titlements as married spouses. in the generation nearest to the intestate that Section 2(2) sets out when a person ceases to be a contains one or more surviving members. spouse for purposes of WESA: Section 24(2) describes how those shares are Two persons cease being spouses of each other distributed: for the purposes of this Act if, (2) Each surviving member of the generation (a) in the case of a marriage, an event occurs nearest to the person that contains one or more that causes an interest in family property, as surviving members must receive one share, and defined in Part 5 [Property Division] of the the share that would have been distributed to Family Law Act, to arise, or each deceased member if surviving must be di- (b) in the case of a marriage-like relationship, vided among that member’s descendants in the one or both persons terminate the same manner as under subsection (1) and this relationship. subsection. Section 2(2.1) provides: Children born inside and outside of marriage are treated equally when determining their rights to For the purposes of this Act, spouses are not share in an intestate’s estate. considered to have separated if, within one year after separation, Sections 8 and 8.1 address what happens when descendants or relatives are born after the intestate’s (a) they begin to live together again and the death: primary purpose for doing so is to reconcile, and  Section 8 applies to descendants or relatives who were conceived but not yet born at the (b) they continue to live together for one or time of the intestate’s death. Such persons more periods, totalling at least 90 days. inherit as if they were alive at the time of the

Wills 5 intestate’s death, provided they live for fixed by order of the Governor in Council, 5 days (s. 8). the estate shall go to the survivor.  Section 8.1 applies to situations where an Idem intestate’s descendant is conceived after the (2) Where the net value of the estate of an in- intestate’s death, using the intestate’s testate, in the opinion of the Minister, ex- genetic material (i.e. assisted reproduction). ceeds seventy-five thousand dollars, or If the s. 8.1 criteria are met, the child such other amount as may be fixed by inherits as if the child was already born at order of the Governor in Council, seven- the time of the intestate’s death: the person ty-five thousand dollars, or such other who was married to or in a marriage-like amount as may be fixed by order of the relationship with the intestate must give Governor in Council, shall go to the sur- notice, within 180 days of the grant of vivor, and probate or administration being issued, that they intend to conceive a child using the (a) if the intestate left no issue, the re- deceased’s genetic material; the child must mainder shall go to the survivor, be born within 2 years of the person’s death (b) if the intestate left one child, one-half and survive for 5 days; and the deceased of the remainder shall go to the sur- person must be the child’s parent under Part vivor, and 3 of the Family Law Act. (c) if the intestate left more than one When a person dies leaving no intestate successors, child, one-third of the remainder their estate escheats to the provincial Crown under shall go to the survivor, s. 23(2)(f) of WESA. Nevertheless, s. 23(4)(b) per- and where a child has died leaving issue mits a person to apply to the Lieutenant Governor and that issue is alive at the date of the in Council under the Escheat Act, R.S.B.C. 1996, intestate’s death, the survivor shall take c. 120 for the return of all or a portion of such real the same share of the estate as if the child or personal property on the basis of a legal or moral had been living at that date. claim, or as a reward for discovering the right of the provincial Crown to the property. Where children not provided for (3) Notwithstanding subsections (1) and (2), 3. Intestacy Under the Indian Act (a) where in any particular case the Min- When the estate is that of a deceased registered In- ister is satisfied that any children of dian, a separate regime governs intestate succession the deceased will not be adequately under s. 48 of the Indian Act. provided for, he may direct that all or any part of the estate that would oth- Note that the federal department that was responsi- erwise go to the survivor shall go to ble for administering estates under the Indian Act the children; and was INAC (Indigenous and Northern Affairs Cana- da), and before that AANDC (Aboriginal Affairs (b) the Minister may direct that the and Northern Development Canada); that depart- survivor shall have the right to ment has been divided into two ministries, where occupy any lands in a reserve that the ministry overseeing testamentary rights under were occupied by the deceased at the the Indian Act is Crown-Indigenous Relations and time of death. Northern Affairs Canada. Distribution to issue Section 48 of the Indian Act is reproduced below. (4) Where an intestate dies leaving issue, his Note that s. 48(15) expressly provides that the sec- estate shall be distributed, subject to the tion applies equally to intestate men and women. rights of the survivor, if any, per stirpes The term “survivor” in the provisions below means among such issue. the deceased’s surviving spouse or common-law Distribution to parents partner (s. 2). (5) Where an intestate dies leaving no survi- Distribution of Property on Intestacy vor or issue, the estate shall go to the Surviving spouse’s share parents of the deceased in equal shares if both are living, but if either of them is 48(1) Where the net value of the estate of an dead the estate shall go to the surviving intestate does not, in the opinion of the parent. Minister, exceed seventy-five thousand dollars or such other amount as may be

Wills 6 Distribution to brothers, sisters and their issue Note that under s. 50(1) of the Indian Act, a person who is not entitled to reside on a reserve cannot in- (6) Where an intestate dies leaving no survi- herit a right to possess or occupy land on a reserve. vor or issue or father or mother, his estate shall be distributed among his brothers For the purpose of determining succession under and sisters in equal shares, and where any this scheme, anyone who is legally adopted or brother or sister is dead the children of adopted according to Indigenous custom is treated the deceased brother or sister shall take as if that person was related by blood to the the share their parent would have taken if adoptive relative. Before the child can inherit, there living, but where the only persons enti- must be a finding of adoption by custom. tled are children of deceased brothers and sisters, they shall take per capita. [§1.04] Further Reading Next-of-kin Many publications by the Continuing Legal Education (7) Where an intestate dies leaving no survi- Society of BC (CLE) cover wills and estates law: vor, issue, father, mother, brother or sis- Annotated Estates Practice (updated) ter, and no children of any deceased brother or sister, his estate shall go to his British Columbia Probate and Estate Administration next-of-kin. Practice Manual (updated) Distribution among next-of-kin Wills and Personal Planning Precedents—An Anno- tated Guide (updated) (8) Where an estate goes to the next-of-kin, it shall be distributed equally among the For estates involving Indigenous people, see §2.04. See next-of-kin of equal degree of consan- also Chapter 21 in the British Columbia Probate and guinity to the intestate and those who le- Estate Administration Practice Manual (Vancouver: gally represent them, but in no case shall CLEBC) and Chapter 29 in Wills and Personal Planning representation be admitted after brothers’ Precedents—An Annotated Guide. Regarding intestacy and sisters’ children, and any interest in under the Indian Act, see the federal government website land in a reserve shall vest in Her Majes- “Estate Services for First Nations People” (www.sac- ty for the benefit of the band if the near- isc.gc.ca/eng/1100100032357/1581866877231#chp6). est of kin of the intestate is more remote than a brother or sister. Degrees of kindred (9) For the purposes of this section, degrees of kindred shall be computed by counting upward from the intestate to the nearest common ancestor and then downward to the relative, and the kindred of the half- blood shall inherit equally with those of the whole-blood in the same degree. Descendants and relatives born after intestate’s death (10) Descendants and relatives of an intestate begotten before his death but born thereafter shall inherit as if they had been born in the lifetime of the intestate and had survived him. Estate not disposed of by will (11) All such estate as is not disposed of by will shall be distributed as if the testator had died intestate and had left no other estate. No community of property (12) There is no community of real or personal property situated in a reserve.

Wills 7 With respect to witnesses to a will, note the following: Chapter 2  A signing witness to a will-maker’s signature must be at least 19 years old (WESA, s. 40(1)).  A will is not invalid just because a witness was Formal Validity of Wills and incompetent at the time of execution of the will Interpreting Wills1 or later becomes incompetent (WESA, s. 40(3)).  A will is not invalid just because a beneficiary or a beneficiary’s spouse witnessed the will. How- [§2.01] Formalities ever, any bequest or appointment in favour of such a beneficiary or the beneficiary’s spouse The Wills, Estates and Succession Act, R.S.B.C. 2009, will be rendered void, unless an application is c. 13 (“WESA”) sets out the formal requirements that are successfully made to declare it not void (WESA, necessary to make a valid will: s. 40(2), 43(1)). See Hammond v. Hammond (1992), 72 B.C.L.R. (2d) 141 (S.C.)). Under (a) The will must be in writing (s. 37(1)(a)). s. 43(4), the court may, on application, declare (b) The will must be signed at its end by the will- that a bequest, appointment, or charging clause maker (or by another person in the will-maker’s in favour of a witness to the will or a witness’s presence and by the will-maker’s direction) spouse is not void, if the court is satisfied that (ss. 1, 37(1) and 39). the will-maker intended to make the gift to the person even though the person was a witness or (c) The will-maker must make or acknowledge the a spouse of a witness. It is up to the witness to signature in the presence of two or more wit- establish the testamentary intent to make a gift nesses who are both present at the same time to the witness: Re Bach Estate, 2017 BCSC 548. (s. 37(1)(b)).  A will is also not invalid just because one of the (d) Two or more or more of the witnesses must sign witnesses is also the executor of the will (WESA, the will in the presence of the will-maker s. 40(2)). However, if the will also contains a (s. 37(1)(c)). (But exceptions exist for members “charging clause” permitting an executor to of the armed forces on active service; see charge professional fees on top of any remunera- below.) tion to which they are entitled, and the executor (e) The will-maker must be at least 16 years old or executor’s spouse acts as a witness, then the (s. 36) (unless the person is a member of the charging clause will treated like a gift and armed forces on active service; see below). deemed to be void under s. 40(2) or 43(1) of WESA. As noted above, the court can declare the WESA contains exceptions to the formal requirements charging clause not void on application under for individuals on active service as members of the Ca- s. 43(4), if the court is satisfied that the will- nadian Forces or the naval, land, or air force of a mem- maker intended to make the gift to the executor ber of the British Commonwealth or any ally of Canada. even though the executor was a witness. Such individuals may make a valid will regardless of age (s. 38). They may also make a valid will signed only by [§2.02] Curing Formal Deficiencies in a Will themselves, with no witnesses. If another person signs their will for them, that signature must be witnessed by Prior to WESA, a will that did not meet the formal re- at least one other person, who must sign the will in the quirements for validity was considered invalid and could presence of the will-maker and of the other person not be admitted to probate. One of the most significant (s. 38). changes under WESA was the introduction of the “curative power” in s. 58. The BC courts have described this provision as one of WESA’s “most far-reaching provisions” and as a “marked departure from the traditional, formalistic approach to the creation of wills” (see e.g. Re Hadley Estate, 2017 BCCA 311). 1 Updated by Hugh S. McLellan of McLellan Herbert in Febru- Section 58 allows the court, on application, to declare a ary 2021, September 2019 and August 2017. Previously revised by PLTC (2016); Douglas Graves (2014); Sadie Wetzel (2012); “record, document or writing or marking on a will or Helen Low (2005); and Ross Tunnicliffe (1994–2002). Re- document” to be fully effective as a will, even though viewed in January 2002 by Roger D. Lee for content relating to the document does not comply with the statutory formal- the Indian Act. ities. The curative power in s. 58 can also be applied to cure formal invalidity in documents meant to revoke, alter, or revive wills or testamentary dispositions.

Wills 8 In order to succeed on an application under s. 58, the  in the case of a will made on board a vessel or applicant must prove on a balance of probabilities that aircraft, the law of the place with which the ves- the document is authentic and that it represents the de- sel or aircraft is most closely connected; or ceased’s testamentary intentions: Estate of Young, 2015  to the extent that the will exercises a power of BCSC 182. Extrinsic evidence of testamentary intent is appointment, the law governing the essential va- admissible to assist the court, including evidence of lidity of that power. events that occurred before or after the document was made (Re Hadley Estate, 2017 BCCA 311). Counsel should go through the above list to determine if any of these options applies. This section can only be used to cure formal deficiencies, and cannot be used to cure a will that is invalid for Note that s. 80 only applies to the formal validity of a substantive reasons such as testamentary incapacity or will. It does not deal with the essential validity of the undue influence. will (for instance, questions about whether the will properly disposes of property, or whether the will-maker For a further discussion of processes under s. 58, see had testamentary capacity). The conflicts rules govern- §11.05. ing the essential validity of wills arise from case law and [§2.03] Conflict of Law depend on whether property is categorized as “moveable” (e.g. personal property) or immovable (e.g. land). A will’s essential validity is determined as follows: Part 4, Division 8 of WESA deals with conflict of law issues that can arise concerning wills. For instance, the  for moveable property, the law of the will- deceased may have made their will in another jurisdic- maker’s domicile at death applies; and tion than BC, or the deceased may have property in an-  for immovable property, the law of the situs other jurisdiction. (where the immovable is located) applies. Section 79(1) provides that, in applying the conflict of Conflict of laws provisions relating to probate and estate laws provisions, the British Columbia court need only administration are discussed in Chapter 9, §9.04. consider the internal law of the foreign jurisdiction, not that jurisdiction’s own conflict of laws rules. [§2.04] Wills by Indigenous People Section 79(2) of WESA clarifies that requirements of foreign jurisdictions that “certain formalities” be ob- The Indian Act governs the requirements of wills for served “by will-makers of a particular description” or registered Indians (as defined in the Act), and provides that witnesses have “certain qualifications” are formal that these wills do not need to comply with WESA’s requirements only and do not affect the essential validity formality provisions. Subsection 45(2) allows the federal of the will. minister administering the estate to accept any “instrument” written by a registered Indian as a will if the indi- Section 80(1) sets out circumstances in which a will vidual’s wishes or intentions about the disposition of made outside British Columbia will be considered to their property at death are set out in the instrument. meet the formal requirements and can admitted to probate. The will is to be considered to meet the formal re- Section 15 of the Indian Estates Regulations provides: quirements if it is valid according to the law of any of “Any written instrument signed by an Indian may be the jurisdictions listed in s. 80(1): accepted as a will by the Minister whether or not it con- forms with the requirements of the laws of general ap-  the law of the place where the will is made; plication in force in any province at the time of the death  the law of the will-maker’s domicile, either at of the Indian.” the date the will is made or at the date of the The ministry administering estates of Indigenous people will-maker’s death; is Crown-Indigenous Relations and Northern Affairs  the law of the will-maker’s ordinary residence, (formerly Indigenous and Northern Affairs). For more either at the date the will is made or at the date detail, see the British Columbia Probate and Estate Ad- of the will-maker’s death; ministration Practice Manual, Chapter 11.

 the law of a country of which the will-maker [§2.05] Revoking a Will was a citizen, either at the date the will is made or at the date of the will-maker’s death; Section 55 of WESA provides that a will may be formal-  the law of British Columbia, even if the will was ly revoked (i.e. cancelled and made inoperative) by any made outside British Columbia; of the following:  the law of the place where the will-maker’s (a) a later will made in accordance with WESA property is situated at the date the will is made (s. 55(1)(a)); or at the date of the will-maker’s death;

Wills 9 (b) a writing which declares an intention to revoke marriage-like relationship cease to be spouses under the will, executed in accordance with WESA WESA when one or both of them terminate the relation- (s. 55(1)(b)); ship. (c) destruction of the will by the will-maker or any Section 56 of WESA states that, unless a contrary inten- other person acting in the presence of the will- tion appears in a will, a gift, appointment as executor, or maker and by the will-maker’s direction, with power of appointment to a person who is or becomes a the intention to revoke it (s. 55(1)(c)); and spouse of the will-maker is revoked if, after the making of the will and prior to the will-maker’s death, the will- (d) by any other act of the will-maker, or by another maker and the spouse cease to be spouses under s. 2(2). person in the will-maker’s presence and at their In such cases, the gift, appointment, or power of ap- direction, if a court determines that the conse- pointment is revoked, and the gift must be distributed as quence of the act of burning, tearing or destroy- if the former spouse had died before the will-maker. Sec- ing all or part of the will is apparent on the face tion 56 is not affected by a later reconciliation of the of the will and the act was done with the intent will-maker and the former spouse, despite s. 2(2.1) of to revoke all or part of the will (s. 55(1)(d)). WESA (s. 56(3)). Even if a document does not strictly comply with WESA’s formal requirements for a revocation, the court [§2.06] Altering a Will can use the curative provision in s. 58 to order it to be fully effective as a revocation, if the court is satisfied A will-maker who makes a valid will may later wish to that the document represents the deceased’s intention to change the will. There are three possible methods: revoke the will (ss. 58(2), (3)). (1) executing a new will with the desired changes A committee appointed under the Patients Property Act (the new will usually revokes the earlier will); has no authority to revoke a will-maker’s will (Allen (2) executing a codicil (an instrument that is meant (Committee of) v. Bennett (31 August 1994), Kamloops to be read with the existing will and is executed 21231 (B.C.S.C.)). according to the same formal requirements as a There is a rebuttable presumption that a will last known will, but only refers to the provisions being al- to have been in the hands of the will-maker but which tered); or cannot be found at death has been destroyed with the (3) making a physical alteration to the existing will, intention to revoke it (Re Wherry (1991), 41 E.T.R. 146 by adding or striking out words (such a change (B.C.S.C.) and Kumari v. Kumari, [1993] B.C.J. No. 108 is often called an “interlineation”). (B.C.S.C.)). Section 54 of WESA governs whether the alteration is Revocation of a will may be conditional. If the revoca- effective. Section 54(1) specifies that, to be valid, an tion is subject to a condition that is not fulfilled, the rev- alteration to a will must be made in the same way as a ocation does not take effect. For example, the will-maker valid will is made under s. 37. In other words, the altera- may destroy a will intending to make a new valid one, tion must be in writing, and signed by the will-maker in then make a second will that is not valid for some rea- the presence of two or more witnesses, who each also son. In these circumstances the first will has not been sign the alteration. revoked. Section 54(2) sets out the mechanics of how to properly A properly executed will is revocable even if the lan- sign these alterations. It states that an alteration to a will guage of the instrument states that it is irrevocable and is effective if the will-maker and the witnesses sign ei- even if the will-maker covenants not to revoke the in- ther “in the margin or in some other part of the will op- strument. When a will is revoked in breach of a contract posite to or near to the alteration” or “at the end of or or a covenant not to revoke it, the will-maker and the opposite to a memorandum referring to the alteration and will-maker’s estate may be liable in damages or subject written in some part of the will”. Section 54(4) sets out to some other equitable remedy for the breach. However, two exceptions where the alteration will still be valid the will itself is revoked. despite not following the s. 54(2) signing requirements: Unlike under the former Wills Act, marriage does not (1) if the alteration is a change to form, style, or revoke a will under WESA. Divorce and separation also numbering and does not substantively alter the do not revoke a will as a whole. However, certain provi- effect of the will; or sions in the will made in favour of the will-maker’s spouse are invalidated if the will-maker and the will- (2) if the evidence establishes that the alteration was maker’s spouse cease to be spouses under s. 2(2) of made before the will was executed, even if the WESA. As noted in Chapter 1, married persons cease to alteration substantively alters the effect of the be spouses under s. 2(2) when an event occurs that caus- will. (Note that the law presumes that any inter- es an interest in family property to arise under the Fami- lineations to a will were made after its execu- ly Law Act (i.e. upon separation), and persons in a

Wills 10 tion, so the party seeking to assert this exception (Nfld. Gen. Div) and Tucker v. Tucker (1985), 56 Nfld. will need to prove it.) & P.E.I.R. 102.

If an alteration is not made in accordance with s. 54, it is [§2.08] Special Types of Wills ineffective (s. 54(3)). Typically, this would mean that an invalid alteration would be disregarded and the original 1. Mutual Wills will would stand unaltered. However, an ineffective alteration can still impact the original will in two circum- The term “mutual wills” refers to two wills which stances, under s. 54(3): contain a covenant not to alter or revoke the provisions without the other’s consent. Where the two (1) If an application is made to cure the deficiency parties make a mutual will in one document, this is in the alteration under s. 58, the court may order called a “joint will.” that the alteration is effective. Mutual wills remain revocable, despite the will- (2) If the alteration made a word or provision illegi- makers’ agreement not to alter or revoke the provi- ble, it can invalidate that word or provision (for sions without each other’s consent. However, that example, when the will-maker blacks out a pro- agreement itself gives rise to a constructive trust. vision so that it is unreadable; see Re Springgay That constructive trust is not revocable, and will be Estate, [1991] B.C.J. No. 984). Despite this, the imposed on the personal representative. The court court can use the curative provision in s. 58 to will direct that the property that is subject to the reinstate the original word or provision, with constructive trust be distributed in accordance with sufficient evidence. the agreement originally reached between the two Where possible, will-makers should avoid interlineations will-makers, even though the surviving will- as their legal validity can be questioned. The better maker’s will was subsequently altered. See Univer- methods for altering a will are to make a new will or ex- sity of Manitoba v. Sanderson (1998), 47 B.C.L.R. ecute a codicil. (3d) 25 (C.A.).

[§2.07] Republishing and Reviving a Will For there to be a valid mutual wills agreement, there must be the mutual agreement not to revoke the individual will, and the first will-maker to die must “Revival” restores a revoked will. “Republication” con- have done so without having revoked or changed firms a valid will, while making it operate as if it were their own will in breach of the agreement. executed on the date of republication. The proof of a mutual will requires evidence apart Republication can occur when a will-maker re-executes from an inference from the mere fact of making their will with the intention of it operating as of that new mutual wills containing identical terms. To estab- date. Also, when someone makes a codicil and refers to lish that there was a mutual agreement not to revoke the codicil as being to an existing will, an inference can the wills, there must be a separate agreement not to be drawn that the will-maker wants to have the codicil revoke. See Brynelsen v. Verdeck, 2002 BCCA 187. considered as part of the will, such that the existing will is considered to exist as at that later date. 2. Holograph Wills A will or a part of the will that has been revoked can be revived by a later codicil made in accordance with A holograph will is a will made wholly in the will- WESA so long as the wording of the codicil shows the maker’s handwriting and not witnessed. Holograph testator’s intention to give effect to the will or the part of wills are recognized in other jurisdictions (for ex- the will that was revoked (WESA, s. 57(1)). To revive a ample, Alberta) without restriction. Holograph wills will, the will must still exist (that is, not have been are recognized in British Columbia only under very destroyed). limited circumstances (for example, the military forces exception in WESA, s. 38). The court may also apply s. 58 of WESA and determine that documents reflect the deceased’s testamentary inten- The curative provision in s. 58 may, however, allow tions to revive a will: see Re Yaremkewich Estate, 2015 a holograph will to be recognized in British Colum- BCSC 1124. bia. Even if the holograph will does not meet the Sometimes a document exists that is completely separate formal requirements for a will under s. 37(1), the from the will and is unexecuted. The doctrine of incor- court may find that the document represents the de- poration by reference may apply, such that the document ceased’s testamentary intentions and order that it be is considered as part of the duly executed will. To quali- effective as the deceased’s will (ss. 58(2), (3)); see fy as part of the will, the document must have existed at Re Beck Estate, 2015 BCSC 676. the time the will was executed, and must be referred to in the will in a reference clearly identifying the document. See Re Marshall Estate (2001), 39 E.T.R. (2d) 87

Wills 11 [§2.09] Testamentary Gifts—Lapse and 3. Lapse Ademption A gift “lapses” when the beneficiary of the gift predeceases the will-maker. 1. Types of Gifts Section 46 of WESA establishes a default scheme A will-maker may make a conditional gift in their for determining alternative beneficiaries of a lapsed will. Such a gift may be subject to a condition prec- gift, whether that gift is specific or residual. This edent (that is, the condition must be satisfied in or- section applies only where no contrary intention is der for the gift to take effect), or to a condition sub- indicated in the will. Under s. 46, specific or residu- sequent (that is, the gift may take effect, but will al gifts which fail to take effect because of lapse terminate on the happening of the condition). will be distributed according to the following priori- A gift in a will may also be “specific” or “residual.” ties: A “specific gift” means a gift of identifiable proper-  to the alternate beneficiary of the gift, if any ty in the will, such as a car, watch, real estate, or (s. 46(1)(a)); jewellery. A residual gift refers to a gift of part or all of the residue of the estate, meaning the part of  if the beneficiary was the brother, sister or a the estate that is left over after all of the other gifts descendant of the will-maker, to their de- have been paid out. scendants (s. 46(1)(b)); or  to the surviving residuary beneficiaries 2. Ademption named in the will, if any, in proportion to A specific gift “adeems” when, before the will- their interests (s. 46(1)(c)). maker’s death, the will-maker disposed of the sub- If the gift still cannot take effect after applying ject matter of the specific gift, the property has s. 46, then the gift passes on intestacy under s. 44. ceased to conform to the description in the will, or the property has been wholly or partially destroyed. When a gift “adeems” it fails and is of no effect. For example, if a will-maker leaves a particular painting to a beneficiary but sells the painting during the will-maker’s lifetime, the beneficiary does not receive that painting on the will-maker’s death. In Koski v. Koski Estate (1994), 3 E.T.R. (2d) 314 (B.C.S.C.) the court found that closing a bank account and transferring the funds in it to another bank account did not result in an ademption of the gift of funds held in the original bank account. However, in Trebett v. Arlotti-Wood (2004), 134 A.C.W.S. (3d) 937 (B.C.C.A.), the Court of Appeal found that where the will-maker had transferred an investment account from one brokerage firm to another, the will-maker caused the subject matter of the gift to cease to conform to the description in the will and therefore, the gift had adeemed. Whether or not the will-maker intended the gift to adeem was irrelevant. Note that s. 48 of WESA provides that if a “nominee” (committee, attorney, or representative) disposes of the subject matter of the gift during the will-maker’s lifetime, the beneficiary is entitled to receive from the estate an amount equivalent to the proceeds of the gift, unless there is a contrary intention in the will or the disposition was made in accordance with the will-maker’s instructions given at the time the will-maker had capacity.

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(1) The will-maker must understand that they are Chapter 3 making a will. (2) The will-maker must know the nature and extent of their property. 1 Testamentary Capacity (3) The will-maker must know the persons who are the object of their bounty. (4) The will-maker must understand the manner in which their estate will be distributed. [§3.01] Introduction In Laszlo v. Lawton, 2013 BCSC 305 at paras. 185-199, Ballance J. adopted the modern restatement of this test In order to make a valid will, in addition to complying set out in Re Schwartz (1970), 10 D.L.R. (3d) 15 (Ont. with the formal requirements of WESA (described in C.A.) at 32 by Laskin J.A. (dissenting on other grounds): Chapter 2), the will-maker must have the requisite testamentary capacity to make a will, and must know and The testator must be sufficiently clear in his approve of the contents of the will. understanding and memory to know, on his The requisite mental element has two components: own, and in a general way (1) the nature and extent of his property, (2) the persons who are (1) the will-maker must understand the nature of the natural objects of his bounty and (3) the tes- the act of making a will and should intend to tamentary provisions he is making; and he make a disposition of property, effective on must, moreover, be capable of (4) appreciating death; and these factors in relation to each other, and (5) (2) the will-maker must be free of mental disorder. forming an orderly desire as to the disposition of his property. The intention to make a will must be genuine. That is, the will-maker must exercise free choice in making the With respect to the requirement of knowledge of the will, rather than being subject to fraud, force, fear or un- will-maker’s property, the will-maker need not recall due influence. every item of, for example, an extensive portfolio of stock or real estate which passes under the will. The requirement that the will-maker “know and approve of” the contents of the will means that the will-maker The phrase “persons who are the object of their bounty” realizes what is in the will and agrees that this is what includes not only those who are actual beneficiaries in they want. the will, but those who could have “moral claims” to the estate. The courts have generally restricted this class to [§3.02] Capacity of Minors spouses, children and those to whom the will-maker stood in loco parentis. The will-maker must understand In British Columbia, a person who has reached the age what they are giving to each beneficiary, and the nature of 16 is capable of making a valid will (WESA, s. 36). of the claims of those they are excluding: Murphy v. Certain exceptions apply to this general rule. An indi- Lamphier (1914), 31 O.L.R. 287 (H.C.) at 317, aff’d vidual who is younger than 16 years of age may make a (1914), 20 D.L.R. 906 (Ont. C.A.). valid will if that individual is on active service in the Testamentary capacity is a legal construct, not a medical armed forces. diagnosis. Medical evidence of capacity is therefore important and relevant but not essential or conclusive, and [§3.03] Test for Mental Capacity it is open to the court to prefer the evidence of lay witnesses in a particular case: see Laszlo v. Lawton. The leading case of Banks v. Goodfellow (1870), L.R. 5 Q.B. 549, suggests the test is whether the will-maker is As a practitioner, you should ensure you are in a position of a “sound and disposing mind and memory.” The case to satisfy the court as to the presence of each necessary sets out the following four criteria: element of testamentary capacity. Your notes should deal with those points under separate headings so that it is clear that you have canvassed the will-maker on all

points. 1 Reviewed by Deidre J. Herbert of McLellan Herbert in March 2021. Previously revised by Denese Espeut-Post (2019 and 2018); PLTC (2012-2016); Sadie Wetzel (2011); Helen Low (2005); Genevieve N. Taylor and Gordon B. MacRae (1999); Gordon B. MacRae (1996–1999); and Professor Donovan Wa- ters, QC, and Gordon B. MacRae with the assistance of Raquel Goncalves (1994).

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[§3.04] Types of Cases In these cases it is admitted on all hands that though the mental power may be reduced below the ordinary standard, yet if Most cases attacking a will on the ground of incapacity there be sufficient intelligence to under- can be divided into two groups. First, those in which it is stand and appreciate the testamentary act in alleged that the will-maker suffered from delusions that its different bearings, the power to make a affected them in making the will; second, those in which will remains (Banks v. Goodfellow, supra). it is alleged that the will-maker suffered from dementia. In the latter situation, the will-maker’s mental capacity is On the other hand, the leading case of Leger v. so reduced by advanced illness that they are incapable of Poirier, [1944] S.C.R. 152 emphasized that the un- making a will. derstanding displayed by a will-maker of dimin- ished mental capacity must be genuine: 1. Delusions There is no doubt whatever that we may Dew v. Clark and Clark (1826), 3 Add. 79 defines a have testamentary incapacity accompanied delusion as a belief in the existence of something by a deceptive ability to answer questions which no rational person could believe, and which of ordinary and usual matters: that is, the cannot be eradicated from the will-maker’s mind by mind may be incapable of carrying com- reasoned argument. It is clear, however, that where prehension beyond a limited range of fa- the delusion does not affect either the will-maker’s miliar and suggested topics. A ‘disposing property or the object of the will-maker’s bounty, it mind and memory’ is one able to compre- will not prevent the will-maker from making a valid hend, of its own initiative and volition, the will. There is also authority (although criticized) essential elements of will making, property, which supports the view that delusional disorder objects, just claims to consideration, revo- may affect only part of the testamentary act. Only cation of existing dispositions, and the those parts that are gravely affected are struck out like… (Re Estate of Bohrmann, [1938] 1 All E.R. 271). Merely to be able to make rational respons- For example, in Banks v. Goodfellow, supra, the es is not enough, nor to repeat a tutored will-maker had fixed delusions that he was pursued formula of simple terms. There must be a by evil spirits. Because there was no reasonable power to hold the essential field of the connection between the delusions and the disposi- mind in some degree of appreciation as a tions made by the will-maker to his niece, the Eng- whole. lish Court of Appeal upheld the will. On the other A lawyer must take special care when taking in- hand, in Smee v. Smee (1879), 5 P.D. 84, the will- structions from clients suffering from dementia. maker’s will leaving his estate to strangers was set Preferably, instructions will be taken from the client aside because the will-maker falsely believed that before the onset of dementia. If they are not, the his brother, his nearest relative, had defrauded him lawyer should be cautious, and in particular be alert of an inheritance. In Royal Trust Co. v. Ford, to when the instructions are taken (that is, during [1971] S.C.R. 831, the will-maker’s delusion that lucid intervals) and in whose presence those in- his son was illegitimate was found to be only a cov- structions are received. er for not wishing to leave more of his wealth to the son. The delusion, if it existed at all, was not the In Oates v. Baker Estate, 1993 CanLII 2216 cause of the limited bequest. (B.C.S.C.), the will-maker, who suffered from AIDS, made out a new will one month before his 2. Dementia death. The solicitor took “exemplary” care while taking instructions and when executing the will, Lack of testamentary capacity is often alleged in both of which were significant factors in ensuring situations where the will-maker suffered from de- proof of testamentary capacity. mentia. For instance, at some point in the progres- sion of some diseases, such as Alzheimer’s disease, [§3.05] Burden of Proof—Testamentary the will-maker’s testamentary capacity may be af- Capacity fected. However, neither advanced age nor the existence of a particular disease is itself evidence of a Notwithstanding the various “tests” enunciated in the lack of capacity. cases, the question of testamentary capacity will always be one of degree and the lawyer will need to use The existence of some mental impairment is also judgement. No particular type of evidence as to not determinative according to Re Cranford’s Will incapacity is likely to be conclusive, except in extreme (1975), 8 N. & P.E.I.R. 318 (Nfld. S.C.): cases. For instance, the mere fact that a will-maker has been declared “incapable of managing their affairs” in a

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committeeship proceeding does not preclude them from opinion from the physician substantiating their views. having testamentary capacity (Royal Trust Company v. Alternatively, the lawyer should have the physician en- Rampone, [1974] 4 W.W.R. 735 (B.C.S.C.)). It may be, dorse the patient’s chart. In extreme circumstances, the as in Rampone, that the will-maker has “good days and lawyer may wish to electronically record the interview bad days.” A will may be made during a lucid interval. with the will-maker (Re Wright Estate (1981), 13 Sask. The nature of the mental health issue may not be R. 297 (Surr. Ct.)). It is part of the solicitor’s duty, as the sufficient to affect the will-maker’s memory and judge said in Murphy v. Lamphier, supra, “to satisfy the understanding (O’Neil v. Royal Trust Co., [1946] S.C.R. Court that the steps he took were sufficient to warrant 622). With respect to incapacitating delusions, the his satisfaction.” The lack of a mental status report, or of question is not “could the delusions possibly have an solicitor’s notes, could deprive the court of extremely influence upon the disposition to be made,” but rather pertinent contemporary evidence if capacity were later “did the delusions in fact influence or affect the called in question. See also Re Worrell, [1970] 1 O.R. disposition actually made?” (McIntee v. McIntee (1910), 184 (Surr. Ct.). 22 O.L.R. 241 (Ont. H.C.)). Drugs and alcohol may deprive a person of testamentary capacity. While inebriation is a condition most can rec- If the solicitor has doubts about the existence of testa- ognize, this is by no means as true in the case of drugs. mentary capacity, they should have a medical doctor, The practical problem most likely to confront the lawyer preferably the attending doctor or hospital physician, is the prospective will-maker who is receiving medica- give an opinion as to capacity. In getting an opinion tion. Before taking instructions, the lawyer should ask about capacity, is important for the solicitor to focus the the attending physician about what effect the particular physician’s attention on the requisite elements for testa- treatment may have upon the mind and memory of the mentary capacity. A declaration of incapability as to the patient. If there is any possible effect, the lawyer should management of one’s affairs, which doctors are accus- ask that such treatment be suspended for the necessary tomed to provide in committeeship proceedings, will not time before the giving of instructions. In this way, the be conclusive of a lack of testamentary capacity. mind of the will-maker will be as free as possible of any If possible, the doctor should also be present when the drug influence during the instruction giving period. If will is executed (Re Kaufman (1961), 27 D.L.R. (2d) the lawyer is medically advised that the drug treatment 178 (Ont. C.A.)). While the doctor’s opinion or presence cannot be suspended, they may still proceed if satisfied when a will is being executed (even their witnessing the on the advice of the physician that testamentary capacity will) does not mean that there can be no attack later upon will not be adversely affected. More considered judg- the will-maker’s capacity, in practice it will make it ment is called for if the drug has an influence that cannot much easier for the propounder to discharge the burden be avoided at any time during the medication cycle. of proof that the will-maker had capacity. It is best to meet personally with the will-maker for the It may also be advisable to obtain a mental status exami- will’s execution, particularly if the will-maker is ill and nation (W.G. Estate v. T.G., 1998 CanLII 1365 (sub nom hospitalized when signing the will (Slater v. Chitrenky, G.(T.) v. G.(R.)) (B.C.S.C.)), particularly if the will- [1981] 4 W.W.R. 421 (Alta. Surrogate Ct.), aff’d [1982] maker has a progressive form of dementia, such as Alz- 3 W.W.R. 575 (Alta. C.A.)). heimer’s disease. A medical specialist who is knowl- The lawyer may encounter an extreme situation where edgeable about diseases that impact memory and under- the will-maker had capacity at the time of giving instruc- standing can often provide useful objective evidence. tions to a lawyer, but has only limited powers of under- However, the evidence of lay people as to their conclu- standing at the time of execution. Provided the will- sions may also be accepted (Re Schwartz, 1970 CanLII maker is capable of understanding on a later occasion 32 (Ont. C.A.); aff’d 1971 CanLII 17 (S.C.C.)). that the document before them contains the instructions A lawyer should keep notes recording both the will- that were given earlier, that will be sufficient. Even maker’s instructions and any observations the lawyer though the will-maker may not be able to repeat or com- made concerning the will-maker’s capacity. These notes prehend the instructions on a later occasion, nor ascer- should be kept on file after the will has been executed tain that the document for execution does indeed repre- (and even after probate of the will). If the lawyer has not sent those instructions, the rule in Parker v. Felgate recorded observations while with the will-maker, the (1833), 8 P.D. 171 requires only that the will-maker lawyer should do so immediately afterwards. The lawyer should be able to think thus far: should also record their observations of the will-maker’s I gave my solicitor instructions to prepare a will state of mind at the date of execution. making a certain disposition of my property. I The lawyer should do a memorandum to file of all medi- have no doubt that he has given effect to my in- cal advice sought and received and of the circumstances tention, and I accept the document which is put in which the instruction-taking and execution took place. before me as carrying it out. If time permits, the lawyer should obtain a letter of

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The rule is narrowly construed to prevent abuse; it may capacity. However, if there is evidence of suspicious not apply to a situation other than one in which instruc- circumstances (as described in §3.07), the burden shifts tions have been given directly to the lawyer and that to those propounding the will to prove the will-maker same lawyer attends on execution (Battan Singh v. knew and approved of the contents of the will. (If the Amirchand, [1948] A.C. 161 (P.C.) and commentary by suspicious circumstances relate to testamentary capacity, M.M. Litman at (1979), 4 E.T.R. 136). For an applica- the propounder will also have the burden to establish tion in British Columbia of Parker and Battan Singh, see capacity.) Re Mcphee (1965), 52 D.L.R. (2d) 520. It is important to understand the distinction between tes- Where the will-maker possesses the required powers of tamentary capacity and knowledge and approval. A will- understanding and memory when giving instructions to maker who lacks capacity cannot “know and approve” of the solicitor, but there is a possibility of a later and rapid the contents of the will. However, a will-maker who has decline of mental condition before execution of the capacity nevertheless may not “know and approve” of prepared will can take place, it is wise for the solicitor to the contents of the will. have the will-maker sign the instructions and witnesses The term “knowledge” also does not mean “understand- attest that signature. Even the limited capacity required ing” what is in the will. There may be legal terms in the by the rule in Parker v. Felgate, supra may have gone will that the will-maker need not fully understand in or- by the time the lawyer is ready with the prepared will. der to adopt them as conveying the will-maker’s intention. Here the will-maker relies upon the skill and expe- A review of the case law suggests that there are the fol- rience of the lawyer who explains how they convey the lowing rules with respect to the burden of proof of tes- will-maker’s intentions. tamentary capacity: The lawyer will normally explain clauses that dispose of (1) The primary burden lies with the propounders of the will-maker’s property to intended beneficiaries care- a will who “must satisfy the conscience of the fully. Yet the cases lead one to wonder how often the court that the instrument so propounded is the same treatment is given to the so-called boilerplate last will of a free and capable [will-maker]” clauses. For instance, why does the will-maker want that (Barry v. Butlin, [1838] 2 Moo. P.C. 480). clause that grants the power to retain original assets? Is it because the will-maker wants the executors and trustees (2) If the will is rational on its face, it is presumed to have the means to wait and sell at the best possible that the will-maker had adequate mental capaci- moment? Or does the will-maker want the assets re- ty at the time when it was made. tained indefinitely as a permanent investment, income return, and capital gain or loss arising for the beneficiar- (3) If the person attacks the will on grounds that re- ies as fate would have it? On the other hand, for matters but the presumption, the burden is on the pro- which a non-lawyer should be able to understand, pounder to establish that notwithstanding that “knowledge” could reasonably be equated with under- general incapacity, there was adequate capacity standing. at the time the will was made. The lawyer will usually meet the requirement of “knowledge and approval” by reading or explaining the (4) If the will is irrational on its face, there is a pre- will to the will-maker before execution. Even if a draft sumption that the will-maker did not have ade- of the proposed will has been sent to the will-maker for quate mental capacity so that those propounding review before the execution interview, the will-maker must satisfy the court of the will-maker’s capaci- should follow a copy of the will as the lawyer reads or ty at the time the will was made. explains it. Particularly with wills involving trusts (as opposed to outright distributions), it is advisable to have (5) The burden is an evidentiary one in accordance the will-maker actually convey their own understanding with the civil standard. to the lawyer by describing the effect of the provisions [§3.06] Knowledge and Approval rather than simply acknowledging them as the will is reviewed. Needless to say, the lawyer will have carefully proofread the final typed original of the will before the Those propounding the will must establish that the will- lawyer and the will-maker meet for the execution, and maker “knew and approved” of its contents. Knowledge will have checked off the provisions of the will against and approval means that the will-maker realizes what is the instructions. in the will, and agrees that it is what they want. The lawyer should always speak clearly and at a suitable Ordinarily, if it is proven that the will was properly exe- pace when explaining the will’s provisions. When read- cuted after being read over by a will-maker who ap- ing those provisions to a client who is blind, less literate peared to understand it, it will be presumed that the tes- or illiterate, the lawyer may need to be exceptionally tator knew and approved of the contents and had sensitive to the client’s needs and comprehension. As for

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the will-maker whose first language is other than Eng- (c) “unnatural” dispositions; lish, if the lawyer does not speak the client’s first lan- (d) involvement of beneficiaries in will guage, the wisest course is either to send the client to a preparation; lawyer who does speak that language, or if that is not possible, to employ an interpreter. If the will-maker is (e) lack of control of personal affairs by the will- deaf, consider referring the client to a lawyer who is maker; deaf, or if that is not possible, employ an interpreter. If (f) drastic changes in the personal affairs of the you take the latter course, it is better to avoid having a will-maker; member of the will-maker’s family act as interpreter, where possible. (g) isolation from friends and family; The lawyer should always interview the will-maker per- (h) drastic changes in the testamentary plan of the sonally. Even reliance upon instructions taken by an em- will-maker; and ployee of the lawyer is to be avoided. At the very least, (i) physical, psychological or financial dependen- the lawyer should interview the will-maker when execu- cy on the beneficiaries. tion is to take place, so that the lawyer may be satisfied that the provisions in the will do in fact represent the When suspicious circumstances exist, it is not free determination and choice of the will-maker. When enough for the lawyer simply to have the will- conducting any interview for instructions or execution, maker confirm their instructions. If the will-maker’s the lawyer should be alone with the will-maker. mental health is deteriorating, the lawyer must ensure that the will-maker is not simply responding to When there are suspicious circumstances, the particular a series of leading questions about the contents of importance of these procedures increases. When exam- the will. The will-maker may be very practised at ined, the circumstances may reveal that force, fear or anticipating and providing the desired response undue influence were present and deprived the will- through picking up a combination of verbal and maker of a genuine intent. Even if those elements are non-verbal cues. Even experienced practitioners are absent, the circumstances may be enough to show that surprised to find difficulties in comprehension when there was “no approval ” For instance, if the person who . the will-maker is asked to explain the disposition conveys the instructions to the lawyer is a beneficiary, scheme in their own words. Judicial determinations especially if that person is a substantial beneficiary, and make it clear that the conduct of the lawyer’s en- the lawyer does not personally speak with the will- quiries and the responses to those enquiries will be maker, there is a grave danger that the real intentions of closely examined to determine whether the mind of the will-maker will not be reflected in the will. The the will-maker was free and unfettered. courts have consistently stated that it is the lawyer’s duty to flush out and to examine suspicious circumstances by The lawyer must explore in detail such matters as: way of personally interviewing the will-maker. See the (a) Is the will rational on its face? Litman and Robertson article at (1979), 4 E.T.R. 136 in which the authors suggest that the lawyer who fails to (b) Have any potential beneficiaries of equal de- discharge their duty in suspicious circumstances may be gree been excluded or forgotten? liable to disappointed beneficiaries under the failed will. (c) What did the previous will provide? Consider also the comments of Sopinka J. in Vout v. Hay, [1995] 2 S.C.R. 876 at §3.07. (d) What precisely are the reasons for the changes at this time? [§3.07] Suspicious Circumstances (e) Do those reasons dispel any suspicion arising from the circumstances? A lawyer must be particularly vigilant for “suspicious circumstances.” Practitioners must develop a “sixth (f) What assets comprise the overall estate? sense” to alert them to any circumstances surrounding (g) Where does the will-maker bank? the execution or preparation of a will which, individually or cumulatively, cast doubt upon the will-maker’s capac- (h) Does the will-maker own any real property? ity to make a will or upon the will-maker’s knowledge (i) What is the estimated size of the residue after and approval of the will’s contents. the payment of debts and legacies? 1. Test (j) Can the will-maker give an outline of their family tree? Circumstances that courts have found to be suspicious include: (k) Does the family tree disclose the existence of someone who would be a natural object of the (a) physical or mental deterioration; will-maker’s bounty? (b) secret preparation of a will;

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(l) Has the will-maker considered and understood In difficult cases it may be appropriate to retain a the provisions of WESA? second lawyer with experience in wills to provide a second opinion. If a will is ultimately prepared, (m) Is the will-maker taking any medication? both lawyers should attend on execution of the (n) Has anyone suggested the scheme of document. It will assist the court in its ultimate disposition? determination to have not only medical evidence but the evidence of two practitioners mindful of the (o) Has the will-maker discussed the scheme of legal principles involved. disposition with any beneficiary? (p) If the will-maker has become alienated from a 2. Burden of Proof previous beneficiary, what are the circum- When a will is prepared under circumstances that stances surrounding that alienation? raise a well-grounded suspicion that it does not ex- (q) Can the circumstances surrounding alienation press the mind of the will-maker, the propounders be objectively verified? of the will face a burden of proof to remove the suspicion by proving knowledge, approval testa- (r) If the will-maker is making dispositions on the mentary capacity, or both. The evidence must be basis of care and assistance provided to them, carefully evaluated in accordance with the gravity is their memory sufficient to evaluate that as- of the suspicion raised (Barry v. Butlin (per sistance in the context of assistance previously Sopinka J. in Vout v. Hay, [1995] 2 S.C.R. 876)). given by others? In Vout v. Hay, the Supreme Court of Canada ex- (s) Is there someone with whom the solicitor can amined the doctrine of suspicious circumstances speak to verify the family relationships? and what effect it has upon the burden of proof. The particular circumstances will suggest what ad- This has become the leading decision on the issue. ditional enquiries should be made. The will-maker, Hay, was an unmarried 81-year-old When the solicitor comes to the conclusion after man who was murdered while living alone on his seeking out and considering all the evidence, espe- farm. The appellant, Vout, the executor named in cially an unambiguous medical opinion, that the the will, was a 24-year-old woman who was unre- will-maker lacks testamentary capacity, and the lated to the will-maker. Apparently, the appellant will-maker (whether with or without this infor- and the will-maker had been friends for several mation) remains anxious to make a will, the solici- years, as the appellant had helped Hay on the farm. tor is clearly placed in a difficult professional posi- There was no evidence that the friendship was any tion. The situation seems to call for the solicitor’s more intimate. None of Hay’s relations was made own reasoned judgement in the particular circum- aware of Vout, despite their frequent contact with stances. The solicitor must consider that to refuse to the deceased. take instructions may cause considerable distress to Under a will dated in 1985 (three years before his the would-be will-maker, all evidence of incapacity death), Vout inherited one farm and the residue of is opinion until a court has ruled on the matter, and the estate, while the respondents, Hay’s relations, the lawyer should give the benefit of any doubt to inherited another farm and some minimal cash. The the will-maker. respondents challenged the validity of the will dated In some circumstances, the lawyer may be 1985, putting forward a previous will, dated 1966, convinced that to draw a will for the client would and raised the question of Vout’s involvement in only lay the groundwork for a lengthy probate preparing the will (which she had lied about, ac- action at the expense of the estate. The lawyer may cording to an interpretation of the evidence). More- think that by drawing a will, they would simply be over, they challenged the truth of Vout’s testimony charging a fee for an act that they believe would be as there were discrepancies between what she had void. If the solicitor is convinced (on strong told the police when questioned while a suspect to evidence) that no testamentary capacity exists, the the murder and her testimony at the trial. lawyer can reasonably refuse to draw a will for the Witnesses testified as to Hay’s self-reliance, inde- client. The Ontario Court of Appeal has held that pendence and to the fact that he was not easily in- the relevant question to ask in deciding whether a fluenced. On this basis, the trial judge concluded solicitor is negligent for refusing to draw a will is that the will-maker had the requisite capacity, that whether a reasonable and prudent solicitor could the will had been duly executed, and that there was have concluded that testamentary capacity was no undue influence. The Court of Appeal set aside absent (Hall v. Bennett Estate (2003), 50 E.T.R. the trial judge’s decision, stating that the trial judge (2d) 72 (Ont. C.A.)). erred by considering only the mental competence of the will-maker and failing to determine whether

Wills 18

“suspicious circumstances” existed. If there had of proof … Accordingly, it has been au- been a finding of suspicious circumstances, the bur- thoritatively established that suspicious cir- den would have shifted to Vout to disprove undue cumstances, even though they may raise a influence. A new trial was ordered. Vout appealed suspicion concerning the presence of fraud to the Supreme Court of Canada. or undue influence, do no more than rebut the presumption to which I have referred. Sopinka J. for the majority held that the Court of This requires the propounder of the will to Appeal had erred and that the trial judge had prove knowledge and approval and testa- properly considered the doctrine of suspicious mentary capacity. The burden of proof with circumstances. In so doing the Court stated at respect to fraud and undue influence re- paras. 26, 27 and 28: mains with those attacking the will ….

. . . The burden with respect to testamentary [§3.08] Undue Influence capacity will be affected as well if the circumstances reflect on the mental capacity 1. Test of the [will-maker] to make a will. Alt- hough the propounder of the will has the The intention of the will-maker to make a will in- legal burden with respect to due execution, cludes the requirement that their intention is genu- knowledge and approval, and testamentary ine. If any provision of the will was due to force, capacity, the propounder is aided by a re- fraud, fear or undue influence brought to bear on buttable presumption. Upon proof that the the will-maker by another person, this genuine in- will was duly executed with the requisite tention does not exist. formalities, after having been read over to or by a [will-maker] who appeared to un- 2. Burden of Proof derstand it, it will generally be presumed The propounder of the will must prove that the for- that the [will-maker] knew and approved of malities of making the will were followed, that the the contents and had the necessary testa- will-maker possessed the requisite capacity to make mentary capacity. the will, and that the will-maker knew and approved the contents of the will. Where suspicious circumstances are present, then the presumption is spent and the A party alleging undue influence in a proceeding propounder of the will reassumes the legal must show only that a person other than the will- burden of proving knowledge and approval. maker was in a position where there was the poten- In addition, if the suspicious circumstances tial for dependence or domination of the will- relate to mental capacity, the propounder of maker. The propounder then has the onus of show- the will reassumes the legal burden of es- ing that the person did not exercise undue influence tablishing testamentary capacity. Both of over the will-maker (WESA, s. 52). these issues must be proved in accordance No presumption arises because of any particular re- with the civil standard. There is nothing lationship between the will-maker and a benefi- mysterious about the role of suspicious cir- ciary. Note, in the words of Sir J.P. Wilde in Hall v. cumstances in this respect. The presump- Hall (1868), L.R. 1 P & D 481: “persuasion is not tion simply casts an evidentiary burden on unlawful, but pressure of whatever character, if so those attacking the will. This burden can be exerted as to overpower the volition without con- satisfied by adducing or pointing to some vincing the judgment of the will-maker, will consti- evidence which, if accepted, would tend to tute undue influence.” The attack will fail if there is negative knowledge and approval or testa- insufficient affirmative evidence of undue influence mentary capacity. In this event, the legal to displace proof of knowledge and approval by the burden reverts to the propounder. propounders (which must only meet a balance of probabilities test). For this reason those alleging It might have been simpler to apply the undue influence will almost invariably also put tes- same principles to the issue of fraud and tamentary capacity in issue. undue influence so as to cast the legal burden onto the propounder in the presence of Allegations of undue influence should not be made suspicious circumstances as to that issue… lightly. If made on insufficient evidence, they may Nevertheless, the principle has become result in the attacker (and perhaps their solicitor) firmly entrenched that fraud and undue being penalized in costs. influence are to be treated as an affirmative defence to be raised by those attacking the will. They, therefore, bear the legal burden

Wills 19

[§3.09] Declaring Wills Void Under the See also the BC Law Institute’s Recommended Practices Indian Act for Wills Practitioners Relating to Potential Undue In- fluence: A Guide (2012). BCLI developed this guide as In the case of the estate of an Indigenous person regis- part of a project recommending practices for lawyers tered under the Indian Act, the federal minister tasked drafting wills, to help protect against suspected undue with overseeing the Indian Act has the power to declare influence. Download the Guide at www.bcli.org/ a will void if the minister is satisfied that the will was project/project-potential-undue-influence-recommended- executed under duress or undue influence or that the de- practices-wills-practitioners. ceased lacked capacity at the time the will was executed: Indian Act, s. 46(1)(a) and (b). For more on this topic, see Chapter 21 of the British Columbia Probate and Es- tate Administration Practice Manual (Vancouver: CLEBC).

[§3.10] Further Reading

For a more detailed analysis of testamentary capacity consult texts, manuals and journal articles on wills, such as the following: Hull, Ian M. and Suzana Popovic-Montag, Feeney’s Canadian Law of Wills. 4th edition. Toronto: But- terworths, 2000 (loose-leaf). Gillese, Eileen, The Law of Trusts. 3rd edition. Con- cord: Irwin, 2014. Hull, Ian M. and Suzana Popovic-Montag, Challeng- ing the Validity of Wills. 2nd edition. Toronto: Car- swell, 2018. Mellows, A.R., and C.V. Margrave-Jones, The Law of Succession. 5th edition. London: Butterworths, 1993. Poyser, John E.S., Capacity and Undue Influence. 2nd edition. Toronto: Carswell, 2019. Barlow, Francis, Williams on Wills. 10th edition. London: Butterworths, 2014. Waters, Donovan W.M., Mark Gillen, and Lionel Smith, The Law of Trusts in Canada. 4th edition. Toronto: Carswell, 2012. For a general discussion of various types of dementia, the mental status examination, and mini-mental status examinations, see K.I. Shulman, “Medical Conditions that May Affect Testamentary Capacity” (1995) 14 Est. and Tr. Journal 347. Refer to Rodney Hull’s articles at 1 E.T.Q. 122 and 3 E.T.R. 74 for a practical discussion of case organization, and to Chapter 19 of the British Columbia Probate and Estate Administration Practice Manual (Vancouver: CLEBC), which sets out the procedure in British Co- lumbia for proof in solemn form.

Wills 20 drafting require close coordination between the lawyer Chapter 4 and the client. The lawyer is not a mere scribe. The lawyer must assist the client in developing a will plan that will deal with contingencies and avoid pitfalls that the Preparing a Will1 client might not have foreseen. [§4.02] Taking Instructions

[§4.01] Introduction to Preparing a Will 1. Taking Instructions Directly Although a will is merely one component of a client’s When taking instruction for the preparation of a overall estate plan, preparing it constitutes one of the will, it is imperative that the lawyer take the in- most difficult and challenging aspects of a lawyer’s structions directly from the client. It is best to meet practice in the estate planning field. To begin with, the with the client in person to receive those instruc- lawyer needs to understand a broad range of legal prin- tions. Where possible, the lawyer should meet with ciples. In addition, the drafting skills necessary to pro- the client alone. If this is not possible, the lawyer duce a will are tested in at least three unique ways: should confirm the instructions with the client directly and privately, or at least in a setting that al-  First, unlike drafting commercial contracts, will lows the client to freely and fully describe the cli- drafting does not have the benefit of two or more ent’s circumstances and wishes. Generally, it is not competing individuals carefully scrutinizing the prudent to take will instructions in the presence of a legal wording and implications to arrive at an beneficiary. agreeable bargain. If two people who are a couple both want to make  Second, will drafting must take into account wills at the same time and to be present with each contingencies that are not ordinarily apparent to other for the entire process, the lawyer must inform non-lawyers (for example, disinheriting chil- both that there is no solicitor-client privilege be- dren, or survivorship rules). tween the lawyer and each of them, and that the  Third, and most significantly, difficulties arise lawyer is obliged to inform both of any information from the fact that wills are interpreted by the or instructions that the lawyer receives or gives to court only after the will-maker has died. either. The lawyer should communicate this from the outset and determine if the couple would prefer Under s. 58 of WESA, the court has the power to order to retain separate lawyers. that a document or “record” be effective to make, alter, The lawyer, not only a paralegal, should be directly revoke, or revive a will even if the formal requirements involved in taking client instructions. This is im- for making, altering, revoking, or reviving a will have portant because the will preparation process in- not been complied with. In addition, under s. 59 of WE- volves not only the client’s information and wishes SA, the court has the power to rectify errors in a will so but also providing legal advice as to how best to ef- as to respect the will-maker’s intentions. Practitioners fect those wishes, and the legal consequences. should preserve correspondence, notes, instructions, and other evidence of their client’s intentions. Practitioners In some circumstances, it may be prudent for the should also warn their clients of the danger that notes, lawyer to obtain the client’s consent to secure in- emails, or other evidence that the will-maker was think- formation and to review the will plan with the cli- ing about changing a gift or a will may inadvertently ent’s other advisors (e.g. accountant, financial alter or revoke a will, and that such “musings” should be planner, foreign lawyer, etc.). clearly marked as “draft.” If the client and the lawyer do not communicate in Proper will planning requires maintaining a delicate bal- the same language, an interpreter should be present ance between implementing a client’s instructions and when the lawyer takes the client’s instructions. It is advising the client on how best to achieve their estate prudent to consider an independent interpreter, and planning goals in practice. The unique difficulties of will not rely on a beneficiary or other interested party

2. Making Notes of the Meeting 1 Updated by Allison A. Curley of McLellan Herbert in March 2021. Previously updated by Nicole Garton (2018); PLTC Making complete notes of will instructions and re- (2012-2016); Sadie Wetzel (2011); Helen Low (2005); Gene- taining them as part of the permanent will file is vieve N. Taylor and Gordon B. MacRae (1999); Gordon B. good practice. The extent of the notes may depend MacRae (1995–1999); and Gordon B. MacRae with the assistance of Raquel Goncalves (1994). Reviewed in January 2002 on what potential concerns are evident when the by Roger D. Lee for content relating to the Indian Act. Re- lawyer meets with the client. If the client is elderly viewed in January 2002 by Halldor Bjarnason for content relat- or ill at the time the instructions are taken, the law- ing to persons with disabilities. yer’s notes should address testamentary capacity. If

Wills 21 the dispositions contained in the will are likely to effect until long into the future. This enables the be contentious within the client’s family, the law- lawyer to determine the appropriateness or compre- yer’s notes should record the client’s intentions and hensiveness of the will as the estate planning vehi- rationale for the distribution scheme. Recording the cle. For clients whose death is more imminent, it is will-maker’s intentions is also important in case even more critical for the lawyer to be aware of the there is subsequent litigation where evidence of the nature and values of the assets and liabilities, in or- will-maker’s intention is admissible. The lawyer’s der to ensure that the dispositions under the will are notes will also be important if the will-maker dies effective to achieve the will-maker’s wishes. after giving instructions but before executing the The starting point is to understand what the client will, so that an application is required under s. 58 of owns, what is the nature of the ownership interest WESA, or if an error in the will needs to be rectified in each asset, and whether that asset would form under s. 59. In certain circumstances, the lawyer part of the estate on death. To do this, the lawyer may consider recording meetings between the law- should review original documentation regarding the yer and the will-maker using audio or video record- asset ownership (for example, brokerage statements ings, so as to preserve evidence of the will-maker’s and insurance designation forms) or conduct an in- intentions. Of course, the client would need to con- vestigation (for example, company or title search). sent to any recordings and they would need to be Understanding title to assets, any direct beneficiary securely stored by the lawyer. designations that might apply to assets and legislative schemes that govern disposition of assets (such 3. Obtaining Background Information as pensions) is necessary to determine what a client Lawyers should understand the family of the will- has to dispose of and what passes in the will. This maker and the will-maker’s relationships to deter- ensures that the lawyer creates an estate plan that mine which persons might have legal claims against reflects all of the client’s testamentary wishes. For the estate. For example, a client might not be aware the same reason, having a clear picture of the tes- that they are in a common law spousal relationship, tamentary liabilities, including contingent liabilities or that there is a child who has been dependent up- such as guarantees, is also important. on the client and who could assert a claim for Knowing the scope and ownership of assets and the maintenance and support from the client’s estate. extent and nature of liabilities is necessary to pro- When taking instructions, it is important to consider vide advice on how best to arrange the estate under not only the will-maker’s current family structure the will. For example, where the client wishes to but also foreseeable changes, particularly if death is make specific bequests of personal assets or devises not imminent. This affects the provisions that might of real property that are encumbered (for example, be made in respect to whether certain trusts should mortgaged) or subject to tax on disposition (for ex- be established, who should be remaindermen of a ample, RRSPs), knowing the liabilities ensures that life interest in the estate (or part of it), and what the lawyer discusses with the client who is to bear contingencies might need to be considered. the liability associated with an asset: does the estate cover the debt, or does the beneficiary take the as- Often it is helpful to start by reviewing the client’s set subject to a debt or charge? earlier will, if it is available, to identify provisions that the client wishes to keep or to alter. If a client is reluctant to discuss assets or finances, the lawyer should inform the client that the will If the client is Indigenous, the lawyer should find may not end up reflecting the client’s testamentary out whether a particular asset is located on reserve. wishes and that the lawyer cannot provide relevant This fact could have significant repercussions for legal advice. This qualification should be expressly tax planning and asset distribution. Under s. 50 of communicated to the client and noted in the law- the Indian Act, land on reserve cannot be left to a yer’s client file. person who does not have a right to reside on the reserve. For more information about the special sta- 5. Providing Basic Information to the Client tus of real property on reserve, see the CLE publication, British Columbia Probate and Estate Ad- It is good practice for a lawyer to discuss with the ministration Practice Manual §20.13. See also the client some administrative matters relating to estate services provided by the federal government: “Es- planning when taking instructions for preparing a tate Services for First Nations People” at www.sac- will. Areas to discuss depend on the client’s sophis- isc.gc.ca/eng/1100100032357/1581866877231 tication, testamentary wishes, and particular circumstances, but might include these: 4. Ascertaining the Assets and Liabilities  probate fees (applying for probate and calcu- It is important to know the client’s present financial lating fees); circumstances, even though the will may not take

Wills 22  registering the will with the Department of  the estate is of a complex nature re- Vital Statistics (the effect and costs); quiring special expertise on the part of the executor.  storing the original will (perhaps in a safety deposit box), and the advisability of telling (ii) Spouse third parties about the will or its contents; This is usually the appropriate choice  legal fees for drafting the will; and when the whole of the client’s estate is left to the surviving spouse.  other estate planning and personal planning tools (powers of attorney, representation When the spouse is the life tenant of a agreements, inter vivos trusts, deeds of gift, trust, the client should consider naming or property transfer documents). the spouse to act as one of the co-trustees. The advantage of appointing the spouse to 6. Naming Executors and Trustees act as one of the co-trustees of a spousal trust is that the spouse has a role in exer- (a) Appointment cising discretion, particularly where there Clients will generally have people in mind for is a right to encroach on capital in favour the roles of executor and trustee, even though of the spouse. A possible disadvantage of they may not fully understand the role them- appointing the spouse could be that the selves. The lawyer should explain to them that spouse might take actions to frustrate the the executor is responsible for the administra- other co-trustees, although that possibility tion of the estate and the trustee is responsible could be eliminated by having an odd for administering any trusts created under the number of trustees, with a direction that will. The two positions are usually held by one the spouse’s views be considered by the or more persons acting in both roles, but in trustees, together with a majority rule pro- some cases it may be prudent or appropriate to vision to avoid a deadlock. name a different person as trustee of some spe- Note that, under s. 56 of WESA, the ap- cial trust created under the will. Also, if the pointment of a spouse as trustee or execu- will provides for more than one testamentary tor is revoked if the will-maker and the trust, different persons may be appointed as will-maker’s spouse cease to be spouses as trustees for the different trusts. set out in s. 2(2) of WESA, unless a contra- An executor’s duties include arranging for the ry intention appears in the will. funeral and disposition of remains, collecting (iii) Adult Children and protecting estate assets until distribution, liquidating assets where appropriate, paying It may be advantageous to name children debts of the estate and distributing the estate to who are beneficiaries as a way of reducing the beneficiaries or trustees as directed under the costs of administration. However, the the will. appointment of a number of children, or children and a spouse who is not the par- Because of the risk of personal liability and the ent of the children, can be problematic. It onerous and time-consuming nature of the job, is a rare case where step-children and many people are reluctant to act as executor. spouses can happily work together as co- The will-maker should discuss this with them trustees of spousal trusts. before the will is executed. (iv) Close Relatives and Friends A typical will-maker selects an executor from among the following groups: When the client is concerned about avoid- ing acrimony among the beneficiaries, one (i) One or More of the Residuary Beneficiaries option is to appoint a person or persons This will often be an appropriate choice, close to the family but who is not a bene- except possibly if there are complications: ficiary. The lawyer should ask the client about possible conflicts of interest be-  a beneficiary resides outside of the tween the suggested executor and the ben- province; eficiaries, and avoid an appointment  the residuary beneficiary is a charity where potential conflicts exist. or a minor; (v) Business Associate or Professional Advisor  there is an anticipated dispute The choice of a business associate, lawyer, amongst beneficiaries; or accountant or other professional to act alone or together with a beneficiary is of-

Wills 23 ten appropriate where additional expertise  the nature and complexity of the as- is required or where the presence of a neu- sets require the experience, expertise tral party may help administer the estate or and skill of a trust company; trust. When the client chooses a profes-  the duties of the administration are sional as one of the executors or trustees, likely to be too onerous for the lawyer should talk with the client individuals; about what they would like to do regarding remuneration for the professional. As  there are assets to be held over a pe- well, it is usually helpful to canvass the riod of years and continuity in the professional to determine their willingness administration, which can be provid- to act on that basis. Many professionals ed by a trust company, is required; will prefer that they be compensated based  the will-maker wishes to take ad- on their normal professional fees and not vantage of the security (for example, on the basis prescribed by the Trustee Act. retaining valuables), protection Clients need to be fully and properly in- against default (for example, negli- formed regarding succession of executor- gence) that is offered by a trust ship. Ordinarily this is best addressed company; and through providing for the appointment of  there is a high probability of a dis- an alternate executor in the will. Where a pute or conflict due to the particular professional is being appointed as one of makeup of the family members. the executors, the client may wish to specifically provide for the appointment of a The lawyer should also advise the client of replacement professional. Depending up- the limitations of appointing a trust com- on the nature of the estate, the complexity pany over an individual who is familiar of the will and the particular wishes of the with the will-maker and the will maker’s will-maker, the executor appointment family, which may include the following: clause can be quite complicated.  Trust companies may be limited in (vi) Lawyers how they can deal with decisions that require the exercise of discretion in Lawyers, and in particular solicitors pre- relation to the administration of a paring wills, are often asked by clients to discretionary trust. Therefore, the be executor and trustee. Before doing so, joint appointment of a family lawyers should consider the extent of their member or close friend to give liability coverage for performing the du- guidance to a corporate trustee may ties of executor and trustee; whether act- be appropriate. ing would place them in a conflict in respect of the estate in the future; and the  Trust companies will have demands remuneration that they would be entitled as to their fees before they will agree to receive. Ordinarily, the law prohibits a to act, and these arrangements should witness to a will from receiving a benefit be, where possible, secured when the under the will, so a lawyer appointed as will-maker is making the will. executor who also witnesses the will can-  The statutory limits for remuneration not be remunerated under a charging under the Trustee Act may make it clause in the will that permits the lawyer difficult to have both a trust company to receive remuneration based on the law- and other individuals appointed to- yer’s professional fees for providing legal gether to act as trustee. services to the estate (unless the court orders otherwise under s. 43 of WESA). In (viii) Specific Executors for Foreign Assets that case, the lawyer’s remuneration will When the client owns assets in foreign ju- be limited to the amounts set out in the risdictions that pass under a British Co- Trustee Act. Law firm partners are similar- lumbia will, it is important to consider ly prejudiced. whether the executor named in the will is (vii) Corporate Executor the appropriate person to deal with the foreign assets, or whether it is better to In some cases, it will be appropriate for appoint an executor in that foreign juris- the client to appoint a trust company either diction to deal specifically with the for- to act alone or as one of the execu- eign assets. tors/trustees. This is especially so when:

Wills 24 (ix) Numerous Executors in the will. This fee agreement may be agreed to by the executor/trustee during the will- There is no legal limit on the number of maker’s lifetime or on death if the execu- executors that may be appointed. Howev- tor/trustee accepts the appointment and com- er, there is a practical consequence to the mences acting under the will. efficiency, cost and effectiveness of having more than one executor and trustee. 7. Naming Beneficiaries With respect to executors who do not need to act unanimously (except with respect to (a) Spouse and Children matters concerning real property), the ac- If the client informs the lawyer of intended tions of one executor binds the other, even beneficiaries of the client’s estate, and the if that action has not been approved by the beneficiaries do not include the client’s mar- others. With respect to trustees, they are ried or common law spouse (of the same or required to act unanimously on all trustee opposite sex) or children, the lawyer needs to matters, unless the will provides other- inform the client of the possible legal and wise. The potential for lack of agreement moral obligations owed to those persons and and conflict amongst the execu- their entitlement to apply for a variation of the tors/trustees is a practical consideration will pursuant to WESA (see Chapter 19). If the for not having too many act at one time. client wants to exclude a spouse or child, then Even the largest of estates do not warrant the lawyer should consider whether the will is more than five executors and generally the appropriate planning tool for the client or three is sufficient in circumstances where whether the client’s interests are better met more than one or two executors are with other planning devices that are not sub- thought to be required. The appointment ject to judicial variation. If the will remains of alternates is a possible answer to the the appropriate planning tool, then the lawyer problem of excessive numbers of trustees. should consider preparing a memorandum of (b) Compensation the client’s reasons, which may be used to clarify the will-maker’s rationale if an applica- It is important to advise the client that an ex- tion for variation is ultimately brought. ecutor/trustee is entitled to statutory compensation on the basis set out under the Trustee (b) Separated Spouse Act, even if the will is silent on compensation. If there is provision in a will for a spouse, and The will may expressly provide for a different then the will-maker and the will-maker’s amount, or there may be a contractual ar- spouse cease to be spouses under s. 2(2), the rangement between the will-maker and the ex- gift is automatically revoked. If the client does ecutor separate from the will. The compensa- not intend this result, then the lawyer must tion of executors and trustees is paid out of the draft a provision that expresses a contrary in- residue of the estate and, therefore, any estate tention. In other words, the will should say accounting and claim for remuneration is to be that the benefit is conferred despite the occur- approved by the residuary beneficiaries unless rence of events under s. 56 of WESA that there is a governing contract between the will- would revoke the gift. maker and the executor. (c) Complex Families When the executor or trustee is also a beneficiary of the estate, the lawyer should confirm If the client’s family is complex (perhaps with with the client whether the client intends that a second spouse and children from a first the executor or trustee receive remuneration in spouse, children from separate spouses, step- addition to the gift made to the person under children, common law relationships, married the will. In some circumstances, the law will but separated spouses), the lawyer should be presume that the gift under the will to the careful to advise the client as to the various executor or trustee is to compensate the execu- problems that certain dispositions can create. tor or trustee for acting, unless the will pro- For example, having the children from a first vides otherwise. marriage as the trustees of the spousal trust for a second spouse might create practical prob- The lawyer may also alert the client to the lems. Children to whom the will-maker stood possibility of securing a fee agreement that in loco parentis, though they may have rights provides for the amount of remuneration and against the will-maker in the event of a rela- the timing for payment of remuneration. The tionship breakdown, do not have rights to seek fee agreement can be set out in the will or in a a share of the will-maker’s estate, despite hav- separate document incorporated by reference ing been supported by the will-maker.

Wills 25 (d) Minors maker’s explanation in order to ensure that the wishes of the will-maker in making such a be- If the client names beneficiaries who may be quest is upheld in the event of a future minors when the will takes effect, the lawyer challenge. should draw the implications to the client’s attention. The client may wish to create a trust 8. Tax Considerations for any gifts to minors, such that the minor does not take the gift before reaching a certain The lawyer drafting the will should know of the age. If that age is beyond the age of majority, general tax issues and inform the client of those the minor can, on reaching the age of majority, general tax implications arising from death and the seek to collapse the trust and receive the manner that the client is disposing of their estate whole of the gift under the principle in Saun- under their will. In addition, the lawyer should ders v. Vautier, unless the will provides for a advise the client to seek specific tax advice from a gift-over in the event that the minor does not tax lawyer or tax accountant where the survive until the age that the minor is entitled circumstances warrant. to the whole of the gift. The lawyer should inform the client that while there If no trust is created and no provision is made are no succession taxes per se applicable in British to permit the executor to pay the gift to the Columbia, assets that pass on death under the minor’s guardian, the gift must be paid to the client’s will may be subject to capital gains tax and Public Guardian and Trustee, who will retain other taxes arising from the deemed disposition of the funds, as trustee, until the minor reaches assets on death, including potential double taxation majority. During the period of minority, the (unless proper planning is effected) on certain Public Guardian and Trustee may authorize assets such as shares in a company. payment of all or part of the money for the If the client is an Indigenous person with assets lo- maintenance, education or benefit of the child cated on a reserve, the tax situation for such an es- (s. 14 of the Infants Act). However, in prac- tate will be different and the lawyer needs to seek, tice, the Public Guardian and Trustee may or have the client seek, specific tax advice. provide for those needs where they cannot be otherwise met, without undue hardship, by the See also Chapter 14. minor’s guardians or some other source. 9. Naming Guardians (e) Charities In British Columbia, a minor person under the age Many clients who want to leave a gift to chari- of 19 is legally considered an “infant” and requires ty do not have the proper legal name of the a legal guardian. charity. The lawyer should research the proper name, and if there is any uncertainty (perhaps Clients should be advised of the importance of because some charities have similar names), naming an appropriate guardian and alternate clarify the gift with the client. The lawyer may guardian for their minor children. They should also consider referencing the charity’s registration be advised of the implications if they do not name a number in the will for clarity. The lawyer guardian for their minor children. should also provide for an alternate benefi- (a) Appointment of a Successor Guardian ciary in the event that the chosen charity is no longer in existence when the will takes effect. Under s. 53 of the Family Law Act (the The lawyer should also advise the client re- “FLA”), a guardian may appoint a successor garding including a clause in the will to pro- guardian in a will or by completing a docu- tect the executor in respect of making payment ment called an “Appointment of Standby or to the charity, perhaps saying that the executor Testamentary Guardian”, attached as Form 2 need not ensure that a particular program or of the FLA Regulation, s. 23. Like a will, the division at the charitable organization receives prescribed form for a testamentary guardian the gift. has procedural execution requirements. It must be signed by the guardian in the presence of (f) Solicitor two or more witnesses, who sign in the pres- If the client informs the lawyer that the lawyer ence of each other and the guardian. When a is to be named as a beneficiary, the lawyer testamentary guardian is being appointed, the should not prepare the will and have the client form indicates that the appointment takes ef- seek another lawyer to assist. The lawyer who fect on the death of the appointing guardian. drafts a will when another lawyer is the bene- A guardian appointing a successor guardian ficiary should inquire into the circumstances must consider only the best interests of the of the bequest and clearly record the will-

Wills 26 child when making the appointment and can- 10. Enduring Powers of Attorney, Representation not grant the successor guardian greater par- Agreements and Committeeship2 enting responsibilities than the appointing The onset of mental incapacity is seldom sudden, guardian actually has for the child (FLA, except where it is caused by a physical trauma or an s. 56). accident. Sometimes mental capacity diminishes (b) Death of a Guardian Without Successor over time; sometimes mental incapacity is charac- Guardians terized by alternating periods of incapability and lucidity. When discussing a will with a client, it is es- If a child’s joint guardian dies without hav- sential to discuss whether the client would also like ing appointed a successor guardian, and if to plan for incapacity. Though many clients know there is a surviving guardian who is also the about wills and estates planning, many are less fa- child’s parent, that surviving parent guardian miliar with the concept of making arrangements in becomes the child’s sole guardian. The surviv- case of incapacity, or personal planning for end-of- ing guardian will have all of the parental re- life and other support needs. sponsibilities for the child, unless a court orders otherwise (FLA, s. 53(3)). It may be appropriate for the client to execute an “enduring power of attorney” and a “representation If a child’s sole guardian dies without having agreement” to authorize other people to make deci- appointed a successor guardian and the surviv- sions about the client’s financial and personal af- ing parent of the child is not also a guardian of fairs in the event the client loses capacity. that child, that surviving parent does not become the child’s guardian unless appointed by  Enduring powers of attorney are the pri- a court order (FLA, s. 54). mary tool for personal planning regarding finances, property, and legal affairs. If a child’s sole guardian dies or a child’s joint guardians die and the child has no remaining  Representation agreements are used for guardian, s. 51 of the Infants Act provides for personal planning regarding health care and default guardians. It states that where a child personal care matters, and can also cover otherwise has no guardian, the Director under some limited financial and legal matters. the Child, Family and Community Service Act One of the main differences between an enduring becomes the personal guardian of the child power of attorney and a representation agreement is and the Public Guardian and Trustee becomes in the duties of those appointed under these agree- the property guardian of the child. Their ments. An attorney appointed under the Power of guardianship continues unless and until anoth- Attorney Act, R.S.B.C. 1996, c. 370 must act in the er appropriate person is appointed by the court best interests of the adult while taking the adult’s to become the guardian of the child in their wishes and values into consideration (s. 19(2)). A place (FLA, s. 51). representative appointed under the Representation The appointment of a successor guardian in Agreement Act, R.S.B.C. 1996, c. 405 has the duties Form 2 or in a will takes effect on the appoint- set out in s. 16, which give priority to the adult’s ing guardian’s death, provided the person ap- wishes, values and beliefs, and are based on the pointed is able and willing to accept the guard- principle of self-determination. ianship appointment. Guardianship is always In certain situations, particularly if there is no en- subject to the best interests of the child. If an during power of attorney or representation agree- interested party (typically a family member or ment in place, the affairs of an adult who becomes friend) brings an application under s. 51 of the incapable may need to be handled by a committee FLA to be appointed guardian of the children appointed under the Patients Property Act, in place of the appointed guardian, a court will R.S.B.C. 1996, c. 349, or by the Public Guardian take into account the appointing guardian’s and Trustee, under the Patients Property Act and wishes for a guardian but will ultimately make the Adult Guardianship Act, R.S.B.C. 1996, c. 6 whatever guardianship order it determines is in (collectively, these arrangements are often referred the best interests of the child. to as “adult guardianship”). As well, if the adult or- See Practice Material: Family, for a further dinarily lives on a reserve, the federal government discussion of guardianship under the FLA, in- might become involved in managing the adult’s es- cluding an example of Form 2. tate under s. 51 of the Indian Act.

2 This section was developed in 2017 with the assistance of Jo- anne Taylor, Executive Director of the Nidus Personal Planning Resource Centre and Registry, Vancouver, and Hugh S. McLel- lan, McLellan Herbert, Vancouver. It has been updated by subsequent authors. Wills 27 A description of each of the personal planning sidered a “springing” power of attorney that tools, and of other legal arrangements in the event was to be exercised if the donor became men- of incapacity, follows. tally infirm. It did not set out how that infirmity would be established. At issue was whether (a) Enduring Power of Attorney the document had the authority of a “spring- Enduring powers of attorney are for planning ing” power of attorney, even though the cir- about financial and legal matters, not health cumstances as to when it would come into ef- matters or personal care. fect were unclear. The chambers judge found that it was not operative, but the Court of Ap- At common law, a power of attorney termi- peal set aside the order and referred it for a re- nates when the principal becomes mentally in- hearing, finding the terms amounted to a sus- competent or dies. However, under Part 2 of pension of the attorney’s authority (at the Power of Attorney Act, an enduring power paras. 25–26): of attorney continues to be in effect if the adult becomes mentally incompetent. An en- The authority, in my view, is created at during power of attorney should state that it is the moment of execution although on in effect while the adult is capable and that the the words of the power of attorney the authority of the attorney continues despite the condition on which it may be exercised adult’s incapability. In an enduring power of may not yet exist. Although the analogy attorney, an adult may appoint a spouse, fami- with contract law is far from perfect, it ly member, trust company or other trusted per- is not unlike the suspension effect of the son(s) as the attorney. An adult may make an condition discussed by Dickson J. in enduring power of attorney unless the adult is Dynamic Transport Ltd. v. O.K. Detail- incapable of understanding the nature and ing Ltd., [1978] 2 S.C.R. 1072. consequences of making the enduring power Just as a power of attorney may provide of attorney, as specified in the Act: see s. 12 of as a condition that “this power of attor- the Power of Attorney Act. ney may not be exercised so long as I Note these cautions concerning an enduring am resident in British Columbia,” a power of attorney: power of attorney may provide “this power of attorney may not be exercised  the attorney (agent) (i.e. the donee of the while I am not mentally infirm.” In my power) cannot be compelled to act; view there is no conceptual difference  the adult (principal) cannot supervise the between the latter condition and the lan- attorney’s actions or revoke the power guage of the power of attorney in this of attorney following the onset of men- case. The reservation in this power of at- tal incapacity; and torney is, effectively, a restriction as to its use.  subject to an express contrary direction contained in the power of attorney, the Section 26 of the Power of Attorney Act con- attorney cannot use the principal’s assets firms that an enduring power of attorney can for the benefit of the attorney or others. be made effective when a specified event occurs. If the effectiveness of the enduring pow- The main advantage of an enduring power of er of attorney is to be deferred until a specified attorney is that it allows adults to make their event, the enduring power of attorney must own arrangements in the event of incapacity. provide “how and by whom the event is to be An enduring power of attorney is also less confirmed” (s. 26(2)). For example, the endur- costly and time-consuming than an application ing power of attorney might require a statutory for the appointment of a committee of estate, declaration from a physician that the person is and can prevent the need for the involvement incapable of managing their affairs by reason in the adult’s affairs of the Public Guardian of mental or physical incapacity. However, it and Trustee (all discussed further below). is generally not advisable to make the endur- Generally, an enduring power of attorney is ing power of attorney come into effect only on effective when it is signed by the person and a physician’s confirmation of mental incapaci- the attorney. However, an enduring power of ty—as noted earlier in this section, mental in- attorney can also be “springing”: that is, trig- capacity is often gradual or may be interrupted gered to become effective only if certain by periods of lucidity, so a physician may be events occur (s. 26, Power of Attorney Act). In unwilling to sign a form saying the adult is Goodrich v. British Columbia (Registrar of mentally incapable of managing their affairs. Land Titles), 2004 BCCA 100, the Court con-

Wills 28 If the person’s spouse is the attorney and their ples of factors that must be considered. Adults marriage or marriage-like relationship ends, may make RA7 agreements even if they are the authority of the attorney under an enduring incapable of making a contract; managing power of attorney ends, unless the document their health care, personal care, or legal mat- states that the authority continues regardless of ters; or routine management of their financial whether the relationship ends (ss. 29(2)(d)(i) affairs (s. 8(1)). and (3)). For the purposes of s. 29, a marriage A representation agreement under s. 9 (also or marriage-like relationship ends when the known as a “Representation Agreement with parties to the relationship are separated within Section 9 Broader Powers,” or “RA9”) is the the meaning of s. 3(4) of the Family Law Act most comprehensive tool for health and per- (Power of Attorney Act, ss. 29(4) and (5)). sonal care matters. It includes the authority to Section 30 of the Power of Attorney Act sets refuse life-supporting health care. An adult out the circumstances when an enduring pow- must understand “the nature and consequences er of attorney is suspended or terminates. This of the proposed agreement” at the time of includes the death of the adult who made the signing it (s. 10). enduring power of attorney (s. 30(4)(b)). (c) Adult Guardianship by Committee or Public Section 30(4)(d) of the Power of Attorney Act Guardian and Trustee states that an enduring power of attorney ter- If personal planning has not been done, then minates if the enduring power of attorney is adult guardianship by means of a court- terminated under section 19 or 19.1 of the Pa- appointed committeeship or the involvement tients Property Act. Section 19 of the Patients of the Public Guardian and Trustee as statuto- Property Act terminates all powers of attorney ry property guardian may be necessary. Note once the person becomes a “patient” by court that, in BC, adult guardianship by these means order (that is, when a committee is appointed is considered as a last resort. by court order). However, the power of attorney will not automatically terminate where a Committee person becomes a patient by a means other Where an adult becomes mentally incapable, than by court order, including where the Pub- any person may apply to the court to be ap- lic Guardian and Trustee is appointed as statu- pointed as a committee of the adult’s estate (to tory property guardian under the Adult Guard- handle the adult’s financial and legal affairs) ianship Act. or as committee of the person (to handle the (b) Representation Agreement adult’s health and personal care matters), under the Patients Property Act. Representation agreements can cover both health care planning and personal care matters If the court appoints a committee, then upon as well as limited legal and financial affairs. the making of the committee order, any power Personal care includes such matters as living of attorney in place for that adult is terminat- arrangements, diet preferences, participation in ed, and (unless the court orders otherwise), activities, and contact with others. Note that any representation agreement is also terminat- there is no “default scheme” in legislation for ed. personal care as there is for health care. A court-appointed committee is costly to ob- A representation agreement may be made un- tain and difficult to reverse. Because it takes der either s. 7 or s. 9 of the Representation time, an application for a committee is not an Agreement Act. The test for incapability, and effective way to respond to immediate needs the representative’s authorities, are different or emergency situations. under each section. A brief description of each type of agreement follows. Public Guardian and Trustee A representation agreement under s. 7 (also If an adult is not capable and has no one to as- known as a “Representation Agreement with sist in decisions about that adult’s financial Section 7 Standard Powers” or “RA7”) can and legal affairs, the Public Guardian and cover minor and major health care, personal Trustee may step in. The Public Guardian and care, obtaining legal services and instructing Trustee assumes authority as statutory proper- counsel, and routine management of financial ty guardian by way of a certificate of incapa- affairs as defined in the Representation bility issued under the Adult Guardianship Agreement Regulation, B.C. Reg. 199/2001. Act. The Public Guardian and Trustee’s au- The test for incapability to make an RA7 (in thority is governed by the Patients Property s. 8) does not specify criteria, but gives exam-

Wills 29 Act and the Adult Guardianship Act. Note that at any time and advocate for the adult’s care the Public Guardian and Trustee’s authority needs and wishes. An adult may also put their applies only to financial and legal affairs. The wishes with respect to health care decisions in Public Guardian and Trustee also reviews the writing in a separate document than the repre- actions of a court-appointed committee of the sentation agreement, and give those to their adult’s estate. representative. (d) Authority of the Minister Under the Indian Act A temporary substitute decision maker is part of the default scheme for health care consent Section 51 of the Indian Act gives all jurisdic- under the Health Care (Consent) and Care tion and authority concerning the property of Facility (Admission) Act, and is only selected Indigenous people who are registered Indians when the health care provider determines an but who are not competent to manage their af- adult is incapable of consent and a health care fairs to the minister of the governing federal decision needs to be made. A temporary sub- department. The Department of Indigenous stitute decisions maker has the authority to ac- and Northern Affairs has been divided into cess information and records about the adult two departments, and the new Department of that are relevant to the specific health care de- Crown-Indigenous Relations and Northern Af- cisions at hand. fairs has responsibility for estates, including estates of dependent adults. Mental health and With respect to committees of person, if a wellness treatment services are under the ju- committee is not already in place, obtaining a risdiction of the Department of Indigenous committeeship is not a particularly effective Services. Personal care matters are under the way to respond to the adult’s immediate needs authority of the provincial Public Guardian about health care decisions, as it requires a and Trustee. Provincial statutes govern the court application and usually takes three to process for declaring an adult to be incompe- four months. tent. (f) Advance Directives A registered Indian may also make a represen- An advance directive is a written instruction to tation agreement or an enduring power of at- give consent or refuse consent to certain health torney in order to plan for the management of care. The Health Care (Consent) and Care their affairs in the event of incapacity. Facility (Admission) Act outlines the require- (e) Health Care Decisions for an Incapable Adult ments for making a valid advance directive. A stand-alone advance directive means a health When a health care provider determines that care provider would follow the instruction if an adult is incapable of informed consent and the adult/patient is determined incapable of in- health care decisions need to be made, de- formed consent for the specific health care depending on the circumstances, those decisions cision. If the instruction is not clear enough to are made by one of the following: follow, the health care provider must select  a representative under a representation someone to be a temporary substitute decision agreement that includes the authority to maker. Advance directives have very limited make decisions on health care matters; use as most instructions depend on a variety of factors and it is impossible to predict the fu-  a committee of person appointed by the ture. If clients wish to put instructions or court under the Patients Property Act; or wishes in writing, they should be advised to  if there is no representative or commit- give these instructions to the representative tee of person, a temporary substitute de- named in their representation agreement. cision maker selected by the health care provider under s. 16 of the Health Care 11. Using a Memorandum (Consent) and Care Facility (Admis- If there are many items the will-maker wants to sion) Act, R.S.B.C. 1996, c. 181. gift, the lawyer should advise the client to consider In terms of the relative authority of these deci- using a separate memorandum. There are two types sion makers, a representative named in a rep- of memoranda: one that forms part of the will, and resentation agreement that includes authority one that does not. for health care matters has more authority than For the document to be a valid testamentary a temporary substitute decision maker. A rep- document, it must be in writing, the will-maker resentative can access information and records must sign it before the will is executed, and it must about the adult in all areas under the repre- be specifically incorporated in the will by reference. sentative’s authority, and may assist the adult The lawyer should advise the client that it is

Wills 30 necessary for the assets to be clearly identified in 3. Life Insurance Declarations any memorandum incorporated by reference Any written and signed document is sufficient to because the memorandum, as a testamentary effect the beneficiary designation under a life insur- document, is subject to the same strict rules of ance policy (Insurance Act, R.S.B.C. 2012, c. 1, construction that apply to a will. Any changes to s. 59). If the will is the instrument used to make a such memoranda require an amendment to the will direct beneficiary designation, the lawyer should and therefore, the lawyer should advise the client of advise the client to provide the insurance company the limitations of the use of such memoranda. with notice of the designation in the will. For that It is also possible to create a memorandum that is reason, it may be prudent to draw the declaration in not intended to be a legally binding testamentary a separate instrument from the will. Further, if the document, which the will-maker can freely amend designation is made in the will, any alteration without the involvement of a lawyer. These would require an amendment to the will itself and if memoranda can be provided to the trustees to guide the will is revoked, intentionally or not, the desig- them in the exercise of their discretion in respect to nation would be revoked. the distribution of assets in specie. Such memoranda can go beyond guidance about dealing 4. Registered Retirement Savings Plans and with distribution of specific assets, such as advising Similar Assets as to the principles that could be used on the A person may designate, by will, a beneficiary of a exercise of the power of encroachment on income Registered Retirement Savings Plan, a Tax-Free or capital for the benefit of a beneficiary. Savings Account or a Registered Retirement In- [§4.03] Circumstances Requiring Special come Fund (ss. 1 and 84 of WESA). Designations Consideration may be made by will by specifically identifying the plan(s) or by using general wording to cover all plan(s) (WESA, s. 85). 1. Homestead or Dower Legislation A person may designate, by will, a beneficiary of If the client is domiciled in a jurisdiction in which an employee pension, retirement, welfare or profit there is homestead or dower legislation (there is sharing fund, trust or plan (WESA, s. 84). However, none in British Columbia), consider what effect the a designation by will may not be possible in all cir- rights conferred by such legislation on a spouse cumstances (s. 84(2)). For example, the Pension may have on the client’s ability to alienate their Benefits Standards Act restricts, in some cases, the property freely. right of the will-maker to dispose of pension benefits as certain pre- and post-retirement benefits are 2. Restrictions on Alienation statutorily provided to a surviving married or com- Are there restrictions on alienation of either mova- mon law spouse, including a former spouse, unless bles or immovables under the applicable law or by there is a specific waiver by the spouse in respect of personal covenant? the statutory entitlements. Consider, for example: 5. Charitable Gifts (a) community of property; If the client wants to benefit a charitable organiza- (b) joint tenancies; tion, be sure that the organization is registered with the Canada Revenue Agency. Be sure also that the (c) limited interest, e.g. estates for life or years, correct name of the organization is used in the will, partnership property; to avoid the expense and inconvenience of an ap- (d) corporate shares with limitations on transfer; plication to court for advice and directions. See the discussion in §11.08 on cy-pres applications. (e) franchises; It is also prudent to include a clause that: (f) currency controls; (a) exonerates the personal representative if the (g) laws restricting absentee ownership of gift is paid to a person professing to be an au- property; thorized representative of the organization; (h) rules of professional or business associations; (b) relieves the personal representative of any ob- (i) agreements relating to any of the client’s ligation to see to the application of the gift by assets; the charity; and (j) property subject to a lien or charge; and (c) provides that a gift to a charity may be paid to a successor organization (where the client so (k) property located on reserve. wishes).

Wills 31 6. The Rule Against Perpetuities 7. Termination, Revocation and Variation of Trusts The common law rule against perpetuities limits the A trust may be varied or prematurely brought to an duration of certain restrictions on the transfer of end in one of two ways: under the rule in Saunders property. It says that any provision in a will that v. Vautier (1841), 41 E.R. 482 (Ch.) or under the creates a future interest in property is void ab initio Trust and Settlement Variation Act, R.S.B.C. 1996, if it is not absolutely certain when the interest is c. 463. created (usually on the death of the will-maker) that (a) Termination Under Saunders v. Vautier it will vest before the later of either 21 years from the death of the will-maker or 21 years from the The rule in Saunders v. Vautier may defeat a death of a “life in being.” A “life in being” is a per- trust created by will or by inter vivos grant, in son alive at the will-maker’s death who is expressly certain circumstances. The rule applies if the or by necessary implication mentioned in the will. trust meets the following conditions: For example, a will-maker leaves her estate in trust (i) it gives the beneficiary or beneficiaries an for her son with a right for him to receive capital absolute vested gift in the whole of the and income during his lifetime. The remainder is to trust property that is payable at a future be paid on his death to his children once they reach event (usually the beneficiary reaching a the age of 21 years. This provision does not offend stipulated age); and the rule against perpetuities. (ii) it directs the trustee either to pay the in- In a different case, a will-maker leaves her estate in come to the beneficiary or to accumulate trust for her son, with a right for him to receive cap- it and pay it with the capital. ital and income during this lifetime, with the re- In such a case, the beneficiaries, if they all mainder to be paid to his children once they reach agree, are of the age of majority, and have the age of 25 years. This provision offends the mental capacity, may require the trustee to dis- common law rule against perpetuities because, tribute the capital of the trust regardless of the should he die before any of his children reach the will-maker’s or settlor’s direction not to pay age of 4, there would be no child in whom the capi- out until the stipulated event has taken place. tal would vest within the requisite time (the son’s life plus 21 years). For example, the rule in Saunders v. Vautier would operate in the following situations: The Perpetuity Act did not repeal the common law rule against perpetuities but enacted saving provi-  Where a legacy of $50,000 is made pay- sions to modify the harsh consequences of breaches able to A on A’s 25th birthday, with the of the common law rule. The Act permits a “wait income to be payable to A annually until and see” approach to whether the vesting in fact oc- attaining that age. curs within the time allowed by the common law In this case, assuming A is mentally rule. If the vesting occurs within the time, the pro- competent, A could require the trustees vision is effective; if the vesting does not occur to pay out the whole $50,000 as soon as within the time, the gift falls into the residue of the A reaches the age of 19. estate. Future or contingent interests, at the outset, are presumed valid until the actual events establish  Where $80,000 is payable to the chil- that the gift did not vest within the perpetuity peri- dren of T (the will-maker), and the capi- od. Additionally, the Act permits an 80-year perpe- tal is to be divided equally between tuity period, if the will expressly or by necessary them when the youngest attains the age implication relies upon the 80-year period. of 25, with the power of maintenance in favour of the class in the meantime, and The Perpetuity Act, R.S.B.C. 1996, c. 358, applies surplus income to be accumulated and only to property devolving under the law of British added to the capital. Columbia and not to real property situated outside of the province. Therefore, it is not prudent in most In this case, as soon as the youngest circumstances to create contingent interests that child of T reaches the age of 19, as long may vest outside of the perpetuity period permitted as all the children are in agreement and under common law if the estate contains out-of- have capacity, they can require the trus- province assets. However, if you are drafting provi- tee to divide the capital among them. sions that may offend the common law rule, you If this rule applies, the trustees should (on re- may be well advised to ensure that the interest will quest by the beneficiaries) terminate the trust. vest, either at the expiration of the 80-year period The trustees would not seek a court order, but permitted under the Act or the period permitted by should ensure that they are fully indemnified common law, whichever is shorter. by those having a beneficial interest. If there is

Wills 32 doubt whether the rule applies, however, trus- ciary and therefore, is not taken into the calculation tees should apply for construction of the will. of the disabled person’s assets. (b) Revocation and Variation Under the Trust and The Planned Lifetime Advocacy Network (PLAN), Settlement Variation Act at 604.439.9566, is a superb resource for further information on estate planning for situations involv- A trust where some of the beneficiaries are ing family members with disabilities. minors or do not have full legal capacity cannot be terminated pursuant to the rule in Saun- [§4.04] Practical Tips for Drafting the Will ders v. Vautier but might be varied or terminated pursuant to the Trust and Settlement 1. Planning for Contingencies Variation Act. This requires notice to the Pub- lic Guardian and Trustee and the court’s ap- When there are a number of consecutive interests proval of the proposed variation or termination created under the will, or when there are many ben- on behalf of the contingent beneficiaries (gen- eficiaries, it is useful to draw a chart summarizing erally, the contingent interests of unborn or the client’s dispositive instructions before begin- minor children or incapable adults). Those ning the first draft of the will. A chart of this kind beneficiaries who have full capacity must also will ensure that: consent. (a) no intestacies will arise in the event of an un- The Trust and Settlement Variation Act gives expected sequence of deaths; the court the discretion to approve trust varia- (b) all the assets have been distributed; and tion based on the standard of a “prudent adult motivated by intelligent self-interest and sus- (c) during periods in which the distribution of tained consideration of the expectancies and capital is postponed, the income is directed ei- risks of the proposal would be likely to ac- ther to be accumulated or paid out. cept” (Russ v. British Columbia Public Trustee (1994), 89 B.C.L.R. (2d) 35 (C.A.)). The 2. Language Use preservation of the “basic intention” of the The use of clear and precise language and proper will-maker does not form part of the consider- explanation is important to ensure that the testa- ation. mentary wishes are reflected in the will. Lawyers Little can be done to avoid Trust and Settle- drafting wills should refer to the numerous sources ment Variation Act applications, but the law- for drafting clauses. Some tips and examples yer should inform the client of the possibility follow. that the trust arrangement may not be fully (a) Be Consistent carried out as the will-maker has instructed. Revocation or variation is most likely to arise Do not, for example, refer to an interest in the where trusts are created for children either for estate as a “share” in one place in the will and their lives or with a distribution date far into then later in the will refer to the same interest the future. as a “portion.” Using different words to mean the same thing is inadvisable because the court 8. Beneficiaries Receiving Disability Assistance may conclude that the change in language was intended to reflect a change in meaning. The use of a testamentary trust to provide for people with disabilities is relatively common. Howev- (b) Avoid Ambiguity in Phrasing er, special considerations arise that the lawyer The phrase “for the use of ‘A’ exclusively for should discuss with the client. If the person is re- general farm purposes” may mean that the as- ceiving or may be entitled to receive BC disability set is to be used by ‘A’ and no others or, alter- assistance, a trust can be established in a way that natively, may mean that the asset is to be used the maximum benefits are preserved for the benefi- only for farm purposes. ciary who is disabled. This is important given that certain asset levels will disentitle a person who is (c) Use Technical Words Correctly disabled from receiving those benefits (assets of One example will illustrate this point. “De- more than $100,000, or $200,000 for a person with vise” refers to a gift of real property; “be- one or more dependants). A fully discretionary trust queath” refers to a gift of personal property. (one in which the beneficiary has no vested enti- The two verbs were confused in the will con- tlement to the receipt of any income or capital from sidered in Patton v. Toronto General Trust the trust and where the beneficiary is not the sole Corporation, [1930] A.C. 629 (P.C.) at 633. trustee) does not qualify as an asset of the benefi- Likewise, do not interchange the words “issue” and “children”: the former encompasses

Wills 33 all lineal descendants, whereas the latter en- 3. Numbering, Headings and Order compasses the first generation of descendants For clarity number the paragraphs and subpara- only. graphs of the will. Headings may be useful in or- (d) Avoid Ambiguity in Non-Technical Words ganizing a will and in assisting the reader (and the client) to locate a particular paragraph. Using the word “deliver” will likely result in shipping costs for specifically gifted chattels Always try to insert the various provisions of the being paid out of the residue of the estate; will in a logical sequence. For example: whereas using the word “gift” will leave the (a) all specific gifts should be inserted before the burden of such costs on the specific legatee. clause containing the executor’s power to The words “between” and “among” are also convert unauthorized investments into money; often misused. (b) a specific gift of money should logically fol- (e) Avoid Redundancies low the power to convert unauthorized in- There is a tendency in legal drafting to use vestments into money; and multiple words and expressions that have the (c) gifts out of residue should follow specific same meaning. Couplets such as “have and gifts. hold” in legal documents arose for historical reasons, including uncertainty as to which 4. Organizing the Contents of the Will English word was preferable when translating a Latin or Norman French law term. Also, the Determine which numbering system you are com- practice of paying for legal documents accord- fortable with and so long as it is clear, simple and ing to their length led to wordy wills. Where typical, routinely use that system. Descriptive head- possible, avoid common legal redundancies: ings can also be useful in drafting, in particular for long, complex wills. The various provisions in the (i) for and during the period; will should also be ordered in a logical fashion. A (ii) release and discharge; typical well-organized will might be structured as follows: (iii) nominate, constitute and appoint; (a) preamble identifying the will-maker and con- (iv) sole and exclusive; firming their intention that the will is intended (v) then and in that event; to be their last will; (vi) order and direct; (b) revocation of all former wills and codicils; (vii) known and described as; and (c) appointment of the executors and trustees and, where appropriate, alternatives if the first ap- (viii) rest, residue and remainder. pointed are unable or unwilling to act or to On the other hand, while brevity is good, do continue to act; not be so abrupt as to obscure the will-maker’s (d) appointment of a guardian or guardians for intended meaning. Repetition may be the best minor children of the will-maker; way to express the will-maker’s true intention. (e) RRSP or RRIF beneficiary designations, if (f) Punctuate With Care any; Although proper punctuation assists in clarify- (f) life insurance beneficiary designations, if any; ing meaning, its careless inclusion has resulted in much unnecessary litigation. One way to (g) gift of the will-maker’s property to the execu- test for clarity of meaning is to have another tors and trustees upon the trusts specified in lawyer read the will before it is presented to the will, which might include, the will-maker for execution. (i) gifts of specific assets; (g) Beware of Interlineations (ii) a trust for the executor and trustee to use While sometimes unavoidable, interlineations their discretion in converting into money should be avoided whenever possible. A doc- any assets which are not in the form of ument is more presentable to your client, to investments approved by the executor the beneficiaries, and to a court, if changes are and trustee, and, if desired, a separate and incorporated in the original form rather than substantive power to retain the assets in by handwritten corrections. the form in which the executor and trustee receives them;

Wills 34 (iii) a direction to the executor and trustee to 5. Drafting Dispositive Clauses pay debts, funeral and administration ex- Because of the virtually unlimited number of ways penses. Where appropriate, a direction that the assets of an estate can be distributed, the may be given to pay all duties, probate dispositive clauses of the will must be specifically fees, and estate taxes payable in respect drafted to reflect the will-maker’s instructions. of the provisions of the will or arising as Generally, the more complex the scheme of distri- a consequence of the death of the will- bution, the more challenging the drafting, and the maker in respect of gifts made by the more likely it is to be challenged. At times, the will-maker during the will-maker’s life- complexity arises from the client’s instructions. For time, interests in life insurance policies practical reasons, you may want to encourage your on the life of the will-maker or property client to simplify the distribution scheme to make held with the will-maker in joint tenancy. the administration of the estate more efficient and If a specific beneficiary is intended to less likely to result in problems or disputes. bear any income tax or other costs payable relative to an asset gifted to that bene- When drafting the dispositive provisions, clearly ficiary, the will must so provide; identify the beneficiary by using the full legal name and the beneficiary’s relationship to the deceased. (iv) payment of cash legacies; Where there is a class gift, describe the class with (v) provision for surviving spouse, perhaps particularity. For example, a gift to “my nephews outright, or in a trust (if desired, a trust and nieces” may be ambiguous: does it refer only to qualifying as a “spousal trust” for pur- children of the will-maker’s siblings, or does it poses of the Income Tax Act); include children of the will-maker’s spouse’s siblings? (vi) provision for children if the spouse fails to survive or, in the case of a trust, on the Many clients provide instructions based on the fam- death of the spouse. If the children are ily arrangements that exist at the time. In advising minors or have not attained the age for your clients, you should review with them how they distribution chosen by the will-maker, would want their estate distributed in the event of then further trusts should be established foreseeable births, deaths, or other changes: for their benefit; and (a) unusual sequences of deaths, including benefi- (vii) provision for the disposition of the estate ciaries predeceasing the will-maker; if the spouse and children all fail to (b) marriage or marriage breakdown; survive the will-maker or, having survived, if they die before their interests (c) adoption or birth of children, who might be under their trusts have indefeasibly minors at the time of inheritance; or vested in interest. (d) incapacity or financially immaturity affecting (h) administrative powers, which might include, beneficiaries. (i) a power of sale, if not contained earlier Consider whether it is desirable to provide for a in the will; survivorship period in the case of outright gifts. Without a survivorship period, if both the (ii) a power to compromise claims of will-maker and the beneficiary are involved in a creditors; common accident, then: (iii) a power to value and distribute property (a) additional duties, probate fees and estate taxes in specie; and additional administrative expenses will be (iv) a power to pay monies for minors to incurred because the same assets will be ad- their guardian; ministered twice; and (v) a power of investment; (b) an unintended distribution may occur if the provisions of the survivor’s will are not the (vi) a power to carry on and invest in any same as those of the first to die. business conducted by the will-maker; The most common survivorship periods specified in (vii) a power to borrow, secured by mortgage wills are 10 days, 30 days or 60 days. The assump- or pledge; tion is that a beneficiary who survives the will- (viii) a power to manage, lease or option real maker for at least the survivorship period is unlike- estate; and ly to have died as a direct result of a common accident. If the survivorship period is brief it will not (ix) a power to make income tax elections cause undue inconvenience to the beneficiary nor and designations.

Wills 35 delay the administration of the estate. It usually of the value of the capital, or limited to specif- takes at least a month to prepare an inventory of as- ic uses (for example, for medical or other sets and liabilities and obtain probate. A longer sur- emergencies). vivorship period would potentially inconvenience Whenever an ongoing trust is created, the the beneficiaries, particularly if the will-maker’s lawyer must ensure the will has provided, to spouse is the only beneficiary. If a survivorship pe- the extent reasonable, for a gift-over (to an al- riod is not specified in the will, s. 10 of WESA im- ternate beneficiary), in case the trust property poses a mandatory 5-day survival period. fails to vest. The drafter should also be aware of the implications of s. 5 of WESA, which provides that if two or more 6. Capital and Stirpital Distributions persons die at the same time, or in circumstances in Discuss with the client whether distribution is to be which it is uncertain as to who died first, rights to “per stirpes” or “per capita,” and make the distribu- property will be determined as if each person sur- tion scheme clear in the will. For an illustration, see vived the other. Consequently, if persons hold the chart on page 37. property jointly, they will be deemed to have held the property as tenants in common and each per- (a) Distribution Per Capita son’s estate will receive that person’s respective Per capita (“by the head”) is a distribution share in the property (rather than all of the jointly scheme where the beneficiaries must be alive held property going to the estate of the youngest when the will-maker dies in order to take their joint tenant). shares of the estate. If any of the beneficiaries When creating ongoing trusts, consider including predeceases the will-maker, the share that provisions dealing with the following matters: would have gone to that deceased beneficiary passes to the other beneficiaries who are alive (a) Distribution or Accumulation of Income at the time of the will-maker’s death. The For example, the income may be payable to share of the deceased beneficiary does not fall the beneficiaries in fixed proportions or as de- into the estate of that deceased beneficiary, so termined by the trustees in their discretion. On it does not pass to the heirs or beneficiaries of the other hand, the trustees may have the dis- that deceased beneficiary. cretionary power to accumulate some or all of For example, Andrew Bates, a widower, the income as well as to distribute it unequally makes a will leaving his estate to his children, among the beneficiaries. per capita. At the date he makes his will, (b) Distribution of Capital Mr. Bates has five adult children. The capital may be held intact for a fixed Mr. Bates’ will contains a clause that directs period after the death of the will-maker. For his trustee “to divide the residue of my estate example, it might be held intact until the among my children who are living at my death youngest child attains the age of majority or in equal shares per capita.” age 21. Alternatively, the capital may be At the date of his death, Mr. Bates leaves an divided immediately into shares for the estate having a residue worth $100,000. One beneficiaries. The individual shares might then of his children, Craig, has died before him. be held for a fixed period—for example, until Craig leaves behind a wife, Denise, and two the beneficiary attains a specified age. children, Elizabeth and Frank. Mr. Bates’ oth- If the capital is to be divided among several er four children survived him. beneficiaries, it is usually better to divide it in- Because the distribution is per capita, each of to “shares” or “parts” rather than percentages. Mr. Bates’ four surviving children receives This practice makes it easier to avoid an inad- $25,000. Denise (Craig’s widow) and Eliza- vertent intestacy if one of the beneficiaries beth and Frank (Craig’s children), receive predeceases the will-maker or survives the nothing. will-maker but dies before the date of distribution. When the beneficiaries are young, con- (b) Per Stirpes Distribution sider distributing their shares of capital in sev- Per stirpes (“by the root”) is used to reflect a eral stages, for example, at ages 25, 30 and 35. scheme of distribution that recognizes each It is also prudent to give the trustees a discre- named beneficiary as the start of a line of line- tionary power to encroach upon the capital. al descendants. If the beneficiary predeceases The power of encroachment may be unlimited, the will-maker, that beneficiary’s share of the or it may be limited in various ways: limited to estate passes on to their lineal descendants (i.e. a specific amount, or limited to a percentage issue).

Wills 36 Consider again the Bates fact pattern. Assume that Mr. Bates has distributed the residue of his estate to “my issue in equal shares per stirpes.” In such a case, the 1/5 or $20,000 that would have gone to Craig, had he survived the will-maker, passes to Craig’s issue: Elizabeth and Frank each receive $10,000, being 1/2 of Craig’s share. Denise, because she is not the issue of Mr. Bates, receives nothing. If Craig had been childless when he predeceased the will-maker, then upon the will- maker’s death there would have been only four shares to distribute. In that case, each of Mr. Bates’ four surviving children would receive $25,000. The phrase “per stirpes” does not of itself specify the generation in which the stirp (root) should commence. For example, if Mr. Bates was not survived by any of his five children, but did have eight grandchildren who survived him, then it would not be clear whether there should be five shares or eight shares. In order to prevent this ambiguity, the will should specify whether the lineal line should commence in the first generation of descendants or in the first generation in which there is at least one living descendant. For a discussion of case law and drafting tips on the use of the phrases “per stirpes” and “per capita,” see C.S. Thériault, “Hamel Estate v. Hamel: Should Will Drafters Abandon the Use of ‘Issue Per Stir- pes’?” (1998) 18 Est. and Tr. Journ. 127.

Wills 37

The two schemes of distribution can be graphically illustrated as follows:

1. Per Capita Distribution

Andrew Bates (will-maker, deceased) Residue = $100,000

Child 1 Child 2 Child 3 Child 4 Child 5 Craig, spouse = Denise (deceased)

$20,000 $20,000 $20,000 $20,000 $20,000

+ $5,000 + $5,000 + $5,000 + $5,000

Elizabeth Frank $0 $0

2. Per Stirpes Distribution

Andrew Bates (will-maker, deceased) Residue = $100,000

Child 1 Child 2 Child 3 Child 4 Child 5 Craig, spouse = Denise (deceased)

$20,000 $20,000 $20,000 $20,000 $20,000

Elizabeth Frank $10,000 $10,000

Wills 38 7. Clauses Benefiting the Executor and Trustee residue of the estate is given to “my nieces and nephews.” In addition to the problem of de- (a) Purchasing Assets termining when the class is to close, it may be If the will-maker wants the executors and trus- unclear whether the phrase “nieces and neph- tees to be able to purchase assets from or sell ews” was intended to mean only the children assets to the estate, the will-maker must spe- of the will-maker’s brothers and sisters, or to cifically empower them to do so. The will- include children of the will-maker’s spouse’s maker must also provide for how the terms of brothers and sisters. the sale will be determined. In the absence of (b) Ademption such a power, the executors and trustees could only purchase assets from or sell assets to the Ademption occurs when the subject matter of estate if all of the beneficiaries beneficially in- a gift is disposed of during the lifetime of the terested under the will were sui juris and will-maker. Consider, for example, a provision agree. which states “To my friend, John, if he survives me all my shares in the capital of ABC (b) Remuneration Company Ltd.” If at the death of the will- If the will-maker intends the executor and maker, the will-maker owns no shares in the trustee to receive remuneration calculated on a ABC Company Ltd., the gift adeems and John different basis than under s. 88 of the Trustee receives nothing. Is this what the will-maker Act, R.S.B.C. 1996, c. 464, then this should be wants? If not (and only by discussing it with set out in the will. Provisions which you may the will-maker will you find out), perhaps wish to consider include: some form of substitution can be made, such as: “To my friend, John, if he survives me, all (i) a provision that any pecuniary legacy is my shares in the capital of ABC Company given in addition to any remuneration to Ltd.; but if I have no shares in the capital of which the executor and trustee may be en- ABC Company Ltd. at my death, I give to titled, if appropriate; him, if he survives me, the sum of $1,000.” (ii) a payment of a lump sum in lieu of other Note that s. 48 of WESA provides that if a remuneration; and “nominee” (committee, attorney, or repre- (iii) a provision for a minimum level of sentative) disposes of the subject matter of the remuneration. gift during the will-maker’s lifetime, the beneficiary is entitled to receive from the estate, an (c) Employment of Experts amount equivalent to the proceeds of the gift, Consider including in the will a power for lay unless there is a contrary intention in the will executors and trustees to employ and delegate or the disposition was made in accordance discretionary powers to trust companies, solic- with the will-maker’s instructions given at the itors, accountants, investment counsel or other time the will-maker had capacity. experts to assist in the administration of the (c) Gifts to Infants estate, and an exoneration of the executor and trustee for following or failing to follow any It is rarely sensible to hold up completion of advice received. the administration of an estate by compelling the executors and trustees to retain small gifts (d) Gifts to Executor and Trustee in specie to infants until they attain the age of It is prudent to provide that any gift to an ex- majority. Unless a will otherwise provides, an ecutor and trustee is not given conditional up- executor must transfer all property in which a on that person acting as executor and trustee, minor has an interest to the Public Guardian and is to be enjoyed beneficially. and Trustee in trust for the minor (WESA, s. 153). Two alternatives should be 8. Common Drafting Pitfalls considered: The following are illustrations of some of the prob- (i) include a provision in the will that the gift lem areas which can, in great measure, be avoided may be paid or delivered to the guardians by a combination of obtaining proper instructions or guardian of the infant to hold for the and careful drafting. benefit of the infant until the infant is of age. Couple this with a direction that upon (a) Class Gifts such payment or delivery the executor and It is very important to ensure that the class is trustee is discharged from all liability in clearly defined. For example, suppose the respect of the gift; or

Wills 39 (ii) specifically provide for the executor to [§4.06] Post-Execution Procedures purchase an asset, such as a bond, which will mature when the infant is entitled to 1. Wills Notices their money. After the will is executed, a wills notice should be It is also important to set out what access filed with Vital Statistics, setting out the full name, should be permitted to property being held in date and place of birth of the will-maker, and the trust for an infant while the infant is a minor. date of execution and location of the will. Since a In the absence of specific provisions in the wills notice search must be conducted before a will, s. 24 of the Trustee Act allows access to grant is applied for, this filing, though not mandato- income for “maintenance and education” only ry, is recommended as a useful protection for the and s. 25 permits access to capital only with client and also for the lawyer if the lawyer is stor- the court’s approval. ing the will for the client.

[§4.05] Will Execution Procedures 2. Wills Storage Wills should be kept in safekeeping in a place You must thoroughly familiarize yourself with the for- where they can be readily located and retrieved malities for the execution of a will as required by WESA when required and free from risk of accidental loss (see Chapter 2). Because of the very strict formalities in or destruction. If you are retaining the will as the British Columbia, it is always best to personally attend solicitor, you must ensure appropriate storage of the on execution or have another lawyer or notary do so. original will, and deal directly with your client re- When the will is being executed in your absence, you garding any storage expenses and the delineation of must ensure that the directions to the will-maker and the responsibilities. If the client is retaining the will, witnesses are complete and clear or otherwise you could you should advise the client to store it in a safety face liability in negligence (Ross v. Caunters, [1980], deposit box. Ch. 297 (Ch.D.)). See Appendix 2 for a sample of instructions for out of office execution of wills. Best practice indicates that if you retain the will in safekeeping, you should: If you have not taken instructions from the will-maker directly, then you must attend on execution, or meet with (a) ensure that the will is stored in an appropriate the will-maker prior to the execution of the will, in order place and that you have a copy in another to confirm the will-maker’s wishes. Otherwise, you risk location; a claim that the will did not reflect the will-maker’s in- (b) insist on filing a wills notice; tentions. When confirming the instructions from an elderly or possibly incapacitated client who has not given (c) ensure that you have negated in writing any you the instructions directly, you should not ask the per- obligation to the client that might be implied son to indicate agreement to the provisions—rather, ask by retaining the will to keep the client in- the person to inform you what their dispositive inten- formed of any changes to the law that might tions are, to ensure that they have knowledge and ap- affect the estate planning effected under the proval of the will you have drafted (Re Worrell (1969), 8 will or otherwise; and D.L.R. (3d) 36). (d) maintain a wills index system to readily There is a presumption that the execution requirements ascertain the location of the will when have been complied with where there is a proper attesta- required, which should include the following tion clause, unless there is evidence to the contrary. information: Nevertheless it is still important to engage in a consistent (i) name and address of will-maker; practice for the execution of wills and the selection of witnesses (who may be available to testify if necessary). (ii) index number of the wills file; If the client has special needs (e.g. blind, illiterate, una- (iii) name and address of executor; ble to read the English language and requires transla- tion), the testimonium clause should be amended to re- (iv) date of execution of will; and flect the circumstance in which the will was executed so (v) exact location of will. as to record compliance with WESA. See Appendix 1 for examples of special testimonium clauses.

Wills 40 3. Reporting to the Client For a detailed discussion of this see M. A. Laidlaw, “Solicitor-Client Privilege: to Disclose or Not to After the will has been executed and a wills notice Disclose . . . Remains the Question, Even After has been filed, you should report to your client in Death” (1995) 15 Est. and Tr. Journ. 56. writing. If you have not already done so, this is the time to provide the client with a copy of the will [§4.07] Further Reading and to confirm the location of the original. You might also take the opportunity to recommend peri- For more detailed information on drafting wills, refer to odic reviews of the will to ensure it is up to date as the following publications: the will-maker’s circumstances change. Bogardus, Peter W., Mary B. Hamilton, and Sadie L. 4. Destroying Prior Wills and Will Files Wetzel, Wills and Personal Planning Precedents— An Annotated Guide. Vancouver: CLEBC (loose- The client, or the lawyer under express written in- leaf and online). structions of the client, may safely destroy a will that has been revoked unconditionally by a later Histrop, Linda Ann, Estates Planning Precedents: A valid will. Solicitor’s Manual. Toronto: Carswell (loose-leaf). A lawyer should not destroy a wills file in respect O’Brien’s Encyclopedia of Forms. 11th ed. Division of an unrevoked will until after the will-maker has V. Wills and Trusts. Toronto: Canada Law Book died and the limitation period for claims by disap- (loose-leaf and online). pointed beneficiaries against the lawyer has ex- Rintoul, Margaret, Canadian Forms and Precedents pired. Note that if the distribution date under the – Wills and Estates. Toronto: Carswell, 1982 (loose- will is postponed, the limitation period could be leaf and CD-ROM). many years after probate is obtained. Scott Butler, Alison, Tax Planned Will Precedents, 5. Releasing a Will From Safekeeping 4th ed. Toronto: Carswell (loose-leaf and CD-ROM). A will should only be released by a lawyer from safekeeping in accordance with and on receipt of Solnik, Robyn et al., Drafting Wills in Canada: A written instructions from the client or from the ex- Lawyer’s Practical Guide. 2nd ed. Toronto: Lex- ecutor named in the will, after receiving satisfactory isNexis, 2016. proof of death of the client and identity of the exec- In addition, refer to the appropriate checklists from the utor. In all circumstances, a copy of the executed Law Society’s Practice Checklists Manual on the Law will and written receipt should be placed on the file. Society’s website (www.lawsociety.bc.ca). Where appropriate, the obligation to verify these matters may be asked (on undertaking if necessary) For commentary and strategy for estate planning issues of the lawyer acting for the client or the executor. relating to wills, see British Columbia Estate Planning & Wealth Preservation (Vancouver: CLEBC, 2016). 6. Releasing a Wills File

During the period of the will-maker’s life, the file may be released to the client at the client’s request. The law provides that solicitor-client privilege with respect to a wills file passes to the executor on the death of the will-maker. There is a general common law exception to solicitor-client privilege that permits the admission of solicitor-client communications dealing with the existence, execution, tenor or validity of wills. If after the death of the client, you are asked to release your wills file, you should give consideration to the law regarding the release of solicitor-client communications in the context of the particular legal issue that has given rise to the request for the file.

Wills

41 [§5.03] Claims Against an Estate on Intestacy Chapter 5 On intestacy, the deceased’s property will devolve in accordance with the fixed statutory scheme of WESA. In 1 certain circumstances, however, contentious issues may Claims Made Against an Estate arise concerning the entitlement of separated spouses or where there are two or more eligible spouses. [§5.01] Introduction Under WESA, a “spouse” has the meaning given to it in s. 2. Subsection 2(1) provides that two people are spous- Before preparing a will, the lawyer must have some es for purposes of WESA if they were married to each knowledge of the types of claims that can be made other or lived together in a marriage-like relationship for against the will and the estate. The most common types at least two years. of claims are introduced in this chapter. See also Chapter It is possible for more than one eligible spouse to survive 13 (Creditors) and Chapter 19 (Variation of Wills). an intestate. Section 22 of WESA addresses this possibility. If two or more persons are entitled to a spousal share [§5.02] Challenges to a Will of an intestate estate, they share the spousal share in the portions to which they agree, or if they cannot agree, as Under the Wills, Estates and Succession Act, S.B.C. determined by the court (s. 22(1)). If two or more per- 2009, c. 13 (“WESA”), a child or spouse of the deceased sons are entitled to apply or have priority as a spouse may seek a redistribution of the will-maker’s estate if it under WESA in respect of an intestate estate, they may can be established that “adequate provision” has not agree on who is to apply or who is to have priority, but if been made for the “proper maintenance and support” of they do not, the court may make the decision (s. 22(2)). the claimant. Part 4, Division 6 of WESA, which deals with variation of wills, is described in more detail in Regarding the position of separated spouses, WESA Chapter 19. s. 2(2) provides that two persons cease to be spouses if: If the dispute is over the will or estate of a registered (a) in the case of marriage, an event occurs that Indian under the Indian Act, the Minister of Crown- causes an interest in family property, within the Indigenous Relations and Northern Affairs Canada has meaning of the Family Law Act, to arise, or the ability to declare the will void in whole or in part (b) in the case of a marriage-like relationship, one or under specified circumstances set out in s. 46 of the both persons terminate the relationship. Indian Act. However, the Minister and (with the Minister’s consent) the party contesting the will or estate Under WESA, once a person ceases to be a spouse, the can apply to transfer the proceedings to a provincial person no longer has a right to claim variation of a de- superior court (s. 44). ceased former spouse’s will under Part 4, Division 6. The person would also not be able to claim a spousal There are advantages to each process and the decision share of the estate under Part 3 if their former spouse will depend on the nature of the dispute and the remedy died without a will. being sought. For example, under s. 46, the Minister may declare the will of an Indian void if its terms would Since separation is an event that causes an interest in “impose hardship on persons for whom the [will-maker] family property to arise, for family law purposes it is had a responsibility to provide,” a class that seems particularly important to determine whether a couple broader than the class of children and spouses entitled to truly separated before the death of one of them. If the seek variation of a will under WESA. The Minister may couple has truly separated, the surviving former spouse also declare the will void if it purports to dispose of land may be able to make a claim under the Family Law Act on a reserve, contrary to the Act. Unlike the court under or a claim for unjust enrichment, but not under WESA. WESA, the Minister cannot create new provisions or This is an evolving area of the law which the courts may reword the will. If the Minister declares a will or a gift in clarify in due course. a will void, the estate or the gift passes on an intestacy Section 48 of the Indian Act governs intestacy for First under s. 48 of the Indian Act. Nations people whose estates fall within the process set out by the Indian Act. The Indian Act defines “survivor” in relation to a deceased individual, as that deceased individual’s surviving spouse or common-law partner. A 1 Updated by J. Jeffrey Locke of McLellan Herbert in March “common-law partner” is defined as “a person who is 2021. Previously updated by Denese Espeut-Post (2018 and cohabiting with the individual in a conjugal relationship, 2019); PLTC (2012-2016); Sadie Wetzel (2011); Helen Low (2000, 2001 and 2005); and Allan P. Seckel (1997 and 1998). having so cohabited for a period of at least one year.” Reviewed in 2002 by Roger D. Lee for content relating to the For more on intestacy under the Indian Act, s. 48, see Indian Act. Chapter 1, §1.03(3).

Wills 42 [§5.04] Claims Against an Estate by The remedy for a claim of unjust enrichment may Unrelated Parties be personal (a monetary remedy) or proprietary (a constructive trust). See Pettkus v. Becker, 1980 In both testate and intestate estates, creditors and tort CanLII 22 (SCC); Peter v. Beblow, 1993 CanLII victims of the deceased may make claims, subject to cer- 126 (SCC); and Wilson v. Fotsch, 2010 BCCA 226. tain limitations set out in s. 150 of WESA. This section The court will consider if a monetary award is ade- excludes claims by the estate of a deceased person for quate or whether a proprietary interest is justified. damages for pain and suffering, loss of expectation of life, and expectancy of earnings after death. 2. Quantum Meruit There may be cases where the deceased has contractual- A monetary remedy is frequently based on a claim ly obligated themselves to devise a specific property by of quantum meruit, meaning “the amount de- will. served.” A quantum meruit claim is a claim that there has been unjust enrichment and that the reme- Note also the area of contractual and quasi-contractual dy should be a monetary remedy calculated on the claims against the estates of deceased persons for ser- basis of quantum meruit (fee-for-services). Quan- vices rendered. See, for example, the decision of Dhillon tum meruit is a basis for quantifying a remedy (see v. British Columbia (Official Administrator), [1993] Nicholson v. Brown Estate, 2018 BCSC 141). B.C.W.L.D. 1749 (B.C.S.C.), where the claimant successfully proved an oral contract to receive the entire The constructive trust remedy is described in the estate in return for providing services to the deceased. next subsection. Those who are members of the deceased’s family and allege a specific contractual arrangement will be met 3. Constructive Trusts with the presumption from Balfour and Balfour, [1919] A constructive trust may be awarded to remedy un- 2 K.B. 571, that legal consequences do not normally at- just enrichment as well as a breach of equitable ob- tach to familial arrangements. However, the law of resti- ligations (Soulos v. Korkontzilas, 1997 CanLII 346 tution and unjust enrichment (described in the next sec- (S.C.C.)). tion) allows for recovery in a much broader range of circumstances than the presumption would suggest. Through a constructive trust, one person is required by operation of law to hold certain property for the [§5.05] Claims for Unjust Enrichment benefit of another. The imposition of a constructive trust on a property requires “a link between the con- 1. Unjust Enrichment tribution that founds the action and the property in which the constructive trust is claimed” (Peter v. Unjust enrichment applies where one party receives Beblow, [1993] 1 SCR 980 at 988). If such a link a benefit from another in circumstances where it does not exist, the claimant must establish another would be against conscience for the benefit to be re- basis on which to impose the remedy, such as the tained. In cases of unjust enrichment, the benefit- breach of fiduciary duty (Wilson v. Fotsch, 2010 ting party will be obligated to restore the benefit to BCCA 226). the other party. A constructive trust should only be imposed when a Unjust enrichment claims may be brought against monetary judgment is inappropriate. A constructive an estate, but often arise in the context of wills vari- trust may be an appropriate remedy in claims in- ation actions in which courts analyze the unjust en- volving real property or personal property, or where richment claim at the stage of assessing the legal a monetary judgment is difficult to enforce. See, for obligation of the will-maker. See Peterson v. Wel- example, Lac Minerals Ltd. v. International Corona wood, 2018 BCSC 1379; Lamperstorfer v. Plett, Resources Ltd., 1989 CanLII 34 (S.C.C.); McMillan 2018 BCSC 89; and Scott-Polson v. Henley, 2013 v. Johnson Estate, 2011 BCCA 48; Blake v. Wells BCSC 247, affirmed 2013 BCCA 428. Estate, 2007 BCCA 617; Pickard v. Knudsen, 2013 A claimant must establish the following to be suc- BCSC 1091; Thibert v. Thibert, 1992 CanLII 282 cessful in a claim for unjust enrichment: (B.C.C.A.); and Brundage v. Campbell, 1992 Can- LII 1095 (B.C.C.A.).  an enrichment; Peter v. Beblow (1993), 77 B.C.L.R. (2d) 1 (S.C.C.)  a corresponding deprivation; and is the leading case on the principles to be applied  the absence of any juristic reason for the when determining if a constructive trust should be enrichment. imposed. The Supreme Court of Canada held that domestic services can meet the basic test of a claim See Garland v. Consumers’ Gas Co., 2004 SCC 25; in constructive trust (that is enrichment, a corre- Moore v. Sweet, 2018 SCC 52; and Kerr v. Bar- sponding deprivation, and the lack of juristic reason anow, 2011 SCC 10.

Wills 43 for the enrichment) if there is a demonstrated link ed little toward the property in question directly, between the domestic services provided and the and because she hadn’t attached any particular property in which the trust is claimed. See Crick v. significance to the actual property (which had been Ludwig (1994), 95 B.C.L.R. (2d) 72 (C.A.), for a sold), she was entitled to a monetary award rather subsequent application of these principles; see also than to the imposition of a constructive trust. The CLE Annual Review of Law & Practice (March Court of Appeal held that while the appropriate 2008), for a discussion of unjust enrichment and remedy in the circumstances was a monetary award, constructive trusts. if it were to decide the case at first instance, it would also have found (unlike the trial court) that A claim in trust may be joined with a wills variation there were adequate circumstances to have imposed action. If successful, the trust claim reduces the size a constructive trust. of the estate available for redistribution. See Guzzo v. Scarcelli (1986), 23 E.T.R. 186 (B.C.S.C.), var- In Antrobus v. Antrobus, 2009 BCSC 1341, varied ied (1989), 33 E.T.R. 163 (B.C.C.A.). 2010 BCCA 356, the court held that the defendant parents were unjustly enriched by the plaintiff, their 4. Case Law Examples eldest daughter. As a teenager, the plaintiff performed the majority of the household work, such as See Guzzo v. Scarcelli (1986), 23 E.T.R. 186 housecleaning, after-school childcare, cooking, (B.C.S.C.), varied (1989), 33 E.T.R. 163 laundry, and grocery shopping. She also worked at (B.C.C.A.), in which a daughter provided substan- her parents’ business without compensation. Her tial services to her mother over a long period of parents promised her that they would leave their en- time, in reasonable expectation that she would retire estate to her in return for all the work she had ceive benefits on her mother’s death. In Guzzo, done for them. Because of their promise, the plain- Houghton J. suggests that, depending on the cir- tiff continued to assist her parents by purchasing a cumstances, either a constructive trust or a quantum rental property on their behalf and taking responsi- meruit assessment of services may be used as part bility for the mortgage. She was their mainstay for of the “equitable weighing” by the court of the at least 20 years. The court found that the volume of plaintiff’s efforts, the advantage which accrued to work performed by the plaintiff as a teenager and the deceased, the deprivation which accrued to the young adult was outside of the usual exchange that plaintiff, and the value of everything which she re- is part of family life, and the fact that her parents ceived or might receive from the deceased. In vary- made the promise of their estate suggested that they ing Justice Houghton’s decision, the Court of Ap- recognized what they had asked their daughter to do peal determined that because there was no link be- was unusual and worthy of compensation. The court tween the contributions provided by the respondent awarded monetary compensation to the plaintiff. to the deceased and the assets of the estate, it was The court declined to impose a constructive trust inappropriate to make a declaration of constructive because there was no strong link between the ser- trust against the assets of the estate. However, the vices the plaintiff performed and the real property Court of Appeal instead ordered a money judgment owned by her parents and there was no evidence which would constitute a debt of the estate, payable that her parents would be unable to pay an award of before legacies. damages. Clarkson v. McCrossen Estate (1995), 3 B.C.L.R.

(3d) 80 (C.A.) deals with the issue of when a successful claim of unjust enrichment entitles the claimant to a monetary award rather than to the imposition of a constructive trust. In Clarkson, the plaintiff stepdaughter succeeded in her claim based on unjust enrichment for care she had provided, first to her deceased mother, and later to her stepfather. To adequately care for each of her mother and her stepfather, she had reduced the number of hours where she had been employed elsewhere. It had been her understanding that the property owned by her stepfather would be left to her in recognition of her devotion. The stepfather remarried subsequent to the death of the claimant’s mother but not long before he himself died. In determining the appropriate remedy the trial court held that, because the claimant had contribut-

Wills

44 Note that the predecessor Limitation Act had an ultimate Chapter 6 limitation period of 30 years, and it would apply to cases where the claim arose while that Act was in force (the new Act came into force on June 1, 2013). For example, Solicitors’ Duties and in 2014 a disappointed beneficiary discovered a claim that arose on her mother’s death in 1981. She brought Responsibilities1 suit against a law firm. The Court of Appeal confirmed in 2017 that the 30-year limitation period had expired in 2011: Byrn v. Farris, Vaughan, Wills & Murphy LLP, [§6.01] Duty of Care in Taking Instructions 2017 BCCA 454. Lawyers can take steps to protect themselves. In addition Lawyers who practise in wills and estates continue to be to carrying adequate insurance for errors and omissions, exposed to liability for professional negligence long af- lawyers should always follow prudent procedures: ter they stop drawing wills or retire from practice altogether. Under the current Limitation Act, S.B.C. 2012, (a) use checklists when taking the client’s c. 13, the basic limitation period for a disappointed bene- instructions; ficiary to bring a claim begins two years from the date (b) record the client’s instructions carefully; that the cause of action is “discovered” (as defined in s. 8 of the Act). (c) keep detailed notes of the client’s assets, liabilities, and family relationships; The ingredients of a cause of action in negligence are well known, and were recently set out by the Supreme (d) keep detailed notes of the advice that the law- Court of Canada in Mustapha v. Culligan of Canada yer has given; Ltd., 2008 SCC 27 at para. 3: (e) confirm the nature of the client’s interests in (1) the defendant owed the plaintiff a duty of care; real property (i.e. joint tenancy or tenancy in common) and in special assets such as a busi- (2) the defendant’s behaviour fell below the ness, particularly where these assets are specif- standard of care; ically bequeathed or devised, or represent a (3) the plaintiff sustained damage; and substantial portion of the client’s estate; and (4) the damage was caused, in fact and in law, by (f) confirm any “unusual” instructions by letter. the defendant’s breach. Careful office procedures and good file management In the case of a disappointed beneficiary, the duty arises should be maintained to avoid problems in this area. It is when the lawyer undertakes to prepare the will. The prudent to think ahead and plan in case urgent situations standard of care may be breached if the lawyer commits arise. For instance, what is the practice in the office an error. The injury occurs when the will comes into when instructions are taken from a very elderly client force and the will-maker’s wishes are not executed as late on Friday afternoon? What practice is followed after intended, causing prejudice to the beneficiary. Conse- instructions are taken at a sick bed? In either of these quently, the cause of action will arise when the disap- instances, should a short will be handwritten and execut- pointed beneficiary “discovers” the lawyer’s error. ed on the spot, with the longer office-generated will to follow later? In a busy office, what reminders are in Consider this example showing the enduring nature of place to ensure that will instructions do not sink to the the risk. A 26-year-old lawyer makes an error in the bottom of the “to do” list? What is the office protocol preparation or execution of a will for a 30-year-old cli- when the unilingual lawyer is about to take instructions ent. The client dies 45 years later at age 75. According to from a client who has only limited English, or has an the current Limitation Act, the right to sue begins to run accompanying close relative who intends to be there to when the error is “discovered.” Assume that this hap- translate the client’s wishes and assist at execution? pens shortly after the will-maker’s death, when the lawyer is 71 years old. The limitation period does not ex- In addition to understanding the laws relating to wills, pire, at the earliest, until the lawyer reaches 73 years of trusts and estates, the lawyer will need to understand the age. The basic two-year limitation period under the cur- laws concerning income tax, real property, conflict of rent Limitation Act may be extended under the discover- laws, insurance and corporations. It is important for the ability, disability or confirmation provisions of the Act, lawyer to keep up with changes in the relevant law, and to a maximum of 15 years from the date the cause of avoid dabbling in unfamiliar areas of law. action arose.

1 Updated by Allison A. Curley of McLellan Herbert in March 2021. Previously updated by PLTC (2016 and 2018) and Helen Low (2005). Original chapter prepared by Donovan Waters, QC.

Wills 45 [§6.02] Duty of Care to Beneficiaries In a carefully reasoned judgment, Megarry V.C. concluded that the true basis of a solicitor’s liability to third parties is the duty of care owed under the 1. Disappointed Beneficiaries of Failed Gifts principles of Donoghue v. Stevenson, [1932] A.C. The starting point for liability of a lawyer to a third- 562 (H.L.): party beneficiary is the judgment of Aikins J. in A solicitor who is instructed by his client to Whittingham v. Crease & Co. (1979), 88 D.L.R. (3d) carry out a transaction that will confer a 353 (B.C.S.C.). In that case, the solicitor prepared benefit on an unidentified third par- the will and was present at the will-maker’s house ty . . . owes a duty of care towards that third for the execution of the will. Unfortunately, the so- party in carrying out that transaction, in that licitor allowed a beneficiary’s spouse to act as a wit- the third party is a person within his direct ness, which rendered a gift to that beneficiary void contemplation as someone who is likely to under the then-operative statute (the Wills Act, be so closely and directly affected by his R.S.B.C. 1960, c. 408, s. 12(1)). Aikins J. found the acts or omissions that he can reasonably solicitor was negligent, and held the solicitor’s firm foresee that the third party is likely to be in- liable to the disappointed beneficiary, applying prin- jured by those acts or omissions. ciples from Hedley Byrne & Co. Ltd. v. Heller & Partners, [1964] A.C. 465 (H.L.): The judge was prepared to concede that the same result can be reached by the route of Hedley Byrne and (a) the relationship gave rise to a duty of care; negligent misstatements. (b) the standard of care was not met, due to negli- Megarry V.C. also decided that an action may be gently making an implied representation; brought on the basis of Donoghue v. Stevenson even (b) a third person foreseeably relied upon the rep- though the damage suffered is purely financial. And, resentation; and if there is a doubt as to the duty of care in some situations, there was none in a will case where the so- (c) the third person suffered injury. licitor knows the name of the third party to whom In order to succeed, the third party (the disappointed the duty is owed, and the amount of the loss is quan- beneficiary) must show that they relied on the tified by the will itself. skilled, though negligent, solicitor. Aikins J. focused on the specific facts of the case. The disappointed 2. Disappointed Beneficiaries Not Provided For beneficiary was the will-maker’s son; Aikins J. Ross v. Caunters potentially expands the ambit of weighed the relative needs of the other beneficiaries, solicitors’ liability to third party beneficiaries. The the will-maker’s other children and grandchildren. House of Lords in White v. Jones, [1995] 3 All E.R. The disappointed beneficiary had been instrumental 691 (H.L.) considered this potentially expanded in securing the solicitor’s services for the will- liability. maker, and was present at the execution. He was “keenly interested in the will being effective,” and In White v. Jones, the client died before the solicitor he “relied on the solicitor to see to it that it was ef- had drawn the will. While the will-maker’s daugh- fective.” Aikins J. emphasized that the case depend- ters had been excluded from his previous will, the ed on its particular facts and that he was making no will-maker had since reconciled with his daughters pronouncement on the general issue of a solicitor’s and had instructed the solicitor to give legacies to liability for negligence to a third-party beneficiary. them in his new will. The disappointed beneficiaries sued the solicitor to recover their losses. In the English case of Ross v. Caunters, [1979] 3 All E.R. 580 (Ch.D), a will was sent to the client by a The House of Lords divided 3:2, with the majority solicitor for execution. The will was accompanied by holding that the solicitor was liable to the would-be instructions as to how the will should be executed. beneficiaries. Two members of the majority were of The will was duly executed and returned to the the view that Ross v. Caunters ought not to be fol- solicitors; however, one of the witnesses was the lowed. A duty of care under the Donoghue v. Ste- spouse of a beneficiary. The will-maker had not venson principle, they reasoned, gives rise to too been warned of the statutory prohibition against any many conceptual problems. For example, is a solici- such person witnessing; the instructions did not refer tor to be liable for financial loss, albeit caused by to it; and the solicitors neither checked the will for their own negligence? Further, must the plaintiff such an error, nor discovered the error in the two have suffered loss, or instead failed to obtain a bene- years that then passed before the will-maker’s death. fit? Following a Donoghue v. Stevenson duty of care The beneficiary, who was unknown to the solicitors means that the solicitor is to be liable to anyone, de- except by name, sued the solicitors to recover her spite the fact that the solicitor may never have spo- loss, and succeeded. ken to or corresponded with the third party (as in Hedley Byrne). Indeed, the solicitor is unlikely even

Wills 46 to know of the would-be beneficiary’s existence, ex- In Esser v. Luoma, a notary who transferred land ti- cept through the will-maker’s instructions. Lords tle at the request of a fraudster using a forged docu- Goff and Browne-Wilkinson found the Ross v. ment was found not to have a duty of care to the ac- Caunters duty of care too uncertain as to when and tual landowner, and not to have breached the stand- to whom it would apply. ard of care. Lord Nolan alone (the third member of the majority) The BC Court of Appeal agreed with the statements was prepared to follow Ross v. Caunters. It is to be by the House of Lords in White v. Jones that expand- noted, however, that neither of the other two majori- ing the Hedley Byrne analysis “was not seen as like- ty members was prepared to rule that the decision in ly to involve indeterminate liability,” again citing Ross v. Caunters is wrong. Instead, they noted that Lord Goff: the duty of care remedy available to the would-be There must be boundaries to the availability beneficiary has existed for 15 years without appar- of a remedy in such cases; but these will have ently causing any difficulty, and that in fact other ju- to be worked out in the future, as practical risdictions, including Canada, had adopted Ross v. problems come before the courts. In the pre- Caunters. As a result, having considered Ross v. sent case Nicholls V-C observed that, in cas- Caunters, the House merely declined to apply it to es of this kind, liability is not to an indeter- the facts at hand. minate class, but to the particular beneficiary The majority of the House of Lords extended the or beneficiaries whom the client intended to principle in Hedley Byrne, supra, so as to give a benefit through a particular will. remedy. The Hedley Byrne principle does not strictly In Smolinski v. Mitchell, 1995 CanLII 1545 apply to the solicitor and the disappointed benefi- (B.C.S.C.), a solicitor took instructions and drafted a ciary, because the solicitor who receives instructions will, but the will-maker delayed finalizing the names and fails by delaying to draft a will before the client of beneficiaries. When the will-maker decided on the dies has made a misrepresentation to no one, let beneficiaries, he divided his estate between a cousin alone the third party who is a stranger to the solici- and the lawyer. The lawyer tried to discourage the tor. On the other hand, the solicitor who takes in- will-maker from making him a beneficiary, but the structions knows who it is the will-maker wishes to will-maker was adamant, so the lawyer insisted that benefit, and also knows the property the intended the will-maker get independent legal advice. The beneficiary is to have. In the view of the majority will-maker did not, and the will was never executed. members of the House of Lords, the solicitor, like The disappointed cousin sued the lawyer who had any other agent who receives instructions from a failed to execute the will. The lawyer was a Bencher, principal, can be said to be subject to an “assumption a QC, and a member of the Law Society’s discipli- of responsibility.” The remedy against the solicitor nary committee. The BC Supreme Court dismissed would ordinarily be an action for breach of contract, the cousin’s claim, saying that it was an unusual but the deceased client has suffered no loss, so no case, but the court would not impose a duty on a action can be brought by the estate. It seemed to the lawyer to a third party that was in conflict with the majority members that in those circumstances it was lawyer’s duty to the client. justifiable to “extend” the principle of tort liability in Hedley Byrne. 3. Disappointed Beneficiaries Disinherited White v. Jones was subsequently cited by the BC Solicitors owe no duty of care to beneficiaries under Court of Appeal in Esser v. Luoma, 2004 BCCA a former will. The BC Court of Appeal, in Johnston 359. At para. 12, Newbury J.A. cited Lord Goff from Estate v. Johnston, 2017 BCCA 59, at para. 37, White v. Jones in recommending a Hedley Byrne made that clear: analysis: [T]here is no justification for imposing a duty [I]n cases such as these [courts should] ex- on solicitors taking instructions from a testa- tend to the intended beneficiary a remedy tor for a new will to protect the interests of under the Hedley Byrne principle by holding beneficiaries under a former will. that the assumption of responsibility by the solicitor towards his client should be held in The Court of Appeal went on to say that the solici- law to extend to the intended beneficiary who tor, in discharging a duty to the client, owes a paral- (as the solicitor can reasonably foresee) may, lel duty to people the client wishes to benefit. How- as a result of the solicitor's negligence, be ever, the solicitor does not owe an independent fidu- deprived of his intended legacy in circum- ciary duty to the beneficiary of a will: stances in which neither the testator nor his In other words, any duty owed by a solicitor estate will have a remedy against the solici- to a beneficiary in a will must mirror the duty tor [emphasis added by the B.C.C.A.]. owed to the testator: the duty to competently

Wills 47 fulfill the testator’s instructions. Thus, a (d) informing a client in British Columbia that di- solicitor cannot owe an independent fiduciary vorce will revoke the will (WESA, s. 55); duty to the beneficiary of a will [at para. 38]. (e) writing “null and void” across a will that the [§6.03] Common Errors will-maker intends to revoke; and (f) receiving telephone instructions to “tear up” a The Lawyers Indemnity Fund has identified some will, and carrying out the act without being in particular risks that give rise to a large number of claims the presence of the will-maker. in the area of wills and estates: Other difficulties can arise when the will-maker is devis- (a) Taking on the role of executor. Make sure you ing real estate in a jurisdiction other than British Colum- understand the duties of an executor, the time bia, especially when the jurisdiction is not in Canada. they will take, and the potential for personal Does the jurisdiction where the land is situated demand liability. any formalities different from those required in this (b) Undue influence. Under WESA, s. 52, the burden province? American jurisdictions differ as to the number of proof has shifted so that if a beneficiary is of witnesses required, though many have enacted legisla- shown to have been in a relationship of potential tion that gives effect to instruments that are formally dependence or dominance with the will-maker, valid according to the law of the place of execution. This that beneficiary must then prove that the gift un- information can be discovered by standard research. der the will was free of undue influence. The public has expectations of the lawyer, but the fees (c) Adult guardianship, representation agreements, charged by lawyers for preparing wills rarely reflect the enduring powers of attorney, and various tools responsibility assumed nor the time, skill and care that to manage financial affairs, health care and per- must be taken. For this reason, lawyers are tempted to sonal planning. Lawyers should familiarize reduce their costs. They rely heavily on precedents and themselves with the proper tools to suit particu- paralegals. They spend as little time as possible drafting lar clients’ needs. wills and reviewing prepared wills. The better approach is for lawyers to spend an appropriate amount of time The Law Society has identified claims and potential obtaining instructions and preparing the will. They claims brought against lawyers for negligence in the should charge an appropriate fee for such service. wills and estates area. Acts of alleged malpractice include the following: Alternatively, lawyers should consider referring will clients to solicitors who have the necessary expertise in the (a) failure to identify family members or potential area. This is to approach will preparation as one would beneficiaries alive at the time of making the approach conveyancing, where few solicitors are willing will so that they could either be provided for in to “dabble” in an area that, at first glance, appears rou- the will or expressly excluded; tine and repetitive, while closer examination reveals that (b) failure to determine the nature or ownership of it is an area fraught with traps and liability risks. These the will-maker’s assets so as to draw a will that risks may not be justified from a business perspective— reflected the will-maker’s intentions; in other words, by the fee received. By paying close attention and charging realistic fees, or by passing the (c) failure of the lawyer to proof-read a revised work to a wills specialist, lawyers will educate the public will before execution; and and each other about the value of a properly drawn will. (d) failure to draft a will promptly after receiving Perhaps more importantly, they may avoid the eventual instructions from the will-maker. cost of an improperly drawn one. It is not only the drafting of wills, but their formal execution that has caused litigation. Lawyers should know the statutory rules for formal execution and be alert in putting them into practice, even though under s. 58 of WESA the court now has the power to declare that a will or a gift in a will is valid in spite of technical faults. The following are instances of technical faults: (a) will-maker not signing in the presence of witnesses; (b) witnesses not signing in the presence of the will-maker, or of each other; (c) the spouse of a beneficiary or a beneficiary witnesses the will (WESA, s. 43);

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executor predeceased the will-maker or is unwilling or Chapter 7 unable to act, the person seeking to be the personal representative of the deceased must apply to court for “letters of administration with will annexed.” Initial Advice to Prospective The personal representatives under a will are the execu- 1 tor and trustee appointed in the will. The executor must Personal Representative apply for probate of the will, collect the assets of the deceased, pay all of the debts (including taxes) of the deceased and the estate, and distribute the assets in accord- [§7.01] Introduction ance with the terms of the will. The trustee must hold, administer, and distribute assets governed by the terms This second part of the Practice Material: Wills is de- of any trust established in the will in accordance with signed to provide a general introduction to practice in those terms. Often one person acts both as executor and the area of probate and estate administration. The mate- trustee under a will. The source of authority for the ex- rials summarize the following: ecutor and trustee is the will. (a) principles of law relating to administration of The person to whom the court grants letters of admin- estates, executors and trustees, probate pro- istration or letters of administration with will annexed ceedings, and claims that can be made against becomes the deceased’s personal representative and is the estate; known as the “administrator” of the estate. The source of (b) procedural rules relating to grants of probate the administrator’s authority is the order of the court is- and administration, probate proceedings, and suing letters of administration to the administrator. claims for a variation of a will under Division 6 of Part 4 of WESA; [§7.02] Identification of the Personal Representative (c) practice guidelines relevant to substantive and procedural matters; and Ordinarily, a will expressly appoints one or more execu- (d) areas of potential liability and other pitfalls. tors, with an alternate or alternates in case a person ini- tially named is unable or unwilling to act or continue to This chapter offers an overview of the initial advice that act. should be given to a prospective personal representative and the initial steps that should be completed in prepar- In some cases, particularly with “home-made” wills, no ing to make the application for probate or administra- executor is named but some person is directed to per- tion. Not all of the material in this chapter will be rele- form some or all of the duties that would ordinarily be vant in each case. What issues should be discussed with performed by an executor. In these situations, that per- the client and when they should be raised are matters of son may be able to apply for probate as “executor ac- judgement in each case. cording to the tenor” of the will (see British Columbia Probate and Estate Administration Practice Manual Probate is the court-based procedure used to establish (Vancouver: CLEBC) §5.75). the validity of a will, if one exists, and to appoint the personal representative who will then have the authority If there is no will, an administrator must be appointed by to act on behalf of the deceased’s estate. When a person the court to administer the estate. The persons who are in British Columbia dies without a will, that person is entitled to apply for letters of administration are general- said to have died intestate, and the person seeking to be ly those entitled to share in the estate. the personal representative of the deceased must apply to If there is a will but no effective appointment of an ex- court for letters of administration. When a person in ecutor, the person seeking to be administrator would ap- British Columbia dies with a will that only partially dis- ply for letters of administration with the will annexed. poses of the estate, that person is said to have died partially intestate, and the person seeking to be the personal Sections 130 to 132 of WESA set out to whom the court representative of the deceased must apply to court for a may grant administration when there is no will, or a will grant of probate of the will, even though part of the es- with no executor, and in what priority (see §7.05(4)). tate may be administered as on an intestacy. If a person dies with a will but failed to appoint an executor or the [§7.03] Deciding Whether to Act as Personal Representative 1 Updated by Hugh S. McLellan of McLellan Herbert, in Febru- ary 2021, September 2019 and August 2017. Previously updated The client should consider a number of factors before by PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jenkins deciding to act as a personal representative. Some of the (2006 and 2005); Helen H. Low (2000 and 2001); and Allan P. more significant factors are as follows: Seckel (1997 and 1998).

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(a) the potential for personal liability arising from but collecting or releasing debts due to the deceased, or a breach of trust in the course of administering taking possession of a legacy given in the will or holding the estate; also the potential personal liability oneself out as an executor have been held to amount to arising by statute and for omissions when act- intermeddling. However, if there has been no intermed- ing as an executor; dling, the client cannot be compelled to act as the personal representative. (b) the terms of the will if there is one (e.g. whether there are ongoing trusts which must be ad- An infant has no capacity to apply for a grant or to re- ministered and whether the client is a benefi- nounce, and a renunciation cannot be obtained from an ciary); infant’s guardian. In the case of a patient, as defined in the Patients Property Act, R.S.B.C. 1996, c. 349, a re- (c) the nature of the deceased’s assets (e.g. nunciation can be signed by the patient’s committee. whether the client has the requisite expertise to deal with unusual assets; whether the estate is A renunciation must be in Form P17 and in the case of a solvent); renunciation by an individual, should be witnessed by an adult who does not have an interest in the estate. Once (d) any conflicts of interest that are apparent or an executor has renounced, their rights in respect of the may arise in the administration of the estate; executorship terminate, unless the Court otherwise or- (e) the personal relationship of the client with the ders (WESA, s. 104). beneficiaries or intestate successors; and [§7.04] Immediate Responsibilities of a (f) the time involved and remuneration payable. Personal Representative The client should also be made aware of the onerous duties associated with acting as a personal representative. Once the client has decided to act as a personal repre- Although they can be prescribed by a will, the duties sentative, the lawyer should advise the client about the almost invariably include the following matters: client’s immediate responsibilities. (a) taking possession or control of the deceased’s 1. Disposition of Remains assets; Section 5 of the Cremation, Interment and Funeral (b) paying debts and making provision for other Services Act, S.B.C. 2004, c. 35, sets out the hierar- liabilities; chy of persons who are entitled to control the dispo- (c) notifying beneficiaries; sition of remains. At the top of the list is the personal representative named in the will of the (d) acting personally, although delegation may be deceased. The right of the executor takes priority allowed in certain circumstances; over the right of a spouse or other close relative. As (e) ensuring that investments are authorized; a matter of practice, the family of the deceased typically makes the funeral arrangements. If the execu- (f) insuring against perils; tor or another individual has the duty to or under- (g) filing all appropriate tax returns; takes to dispose of the remains, but neglects to do so without lawful excuse, then they are guilty of an (h) continuing or bringing and maintaining actions indictable offence under s. 182 of the Criminal on behalf of the estate; and Code. (i) keeping proper accounts. Under s. 6 of the Cremation, Interment and Funeral An executor who does not wish to act, and who has not Services Act, the deceased’s written preference con- intermeddled can renounce the appointment. A co- tained in a will or in a pre-need cemetery or funeral executor who does not wish to act can either renounce or services contract as to disposition is binding on the allow another co-executor to proceed while reserving the person with the right to control the disposition of right to apply for probate later (if, for example, the prov- remains under s. 5, as long as compliance with the ing co-executor later is unable or unwilling to complete preference is consistent with the Human Tissue Gift the administration). Act, R.S.B.C. 1996, c. 211, and would not be unreasonable or impracticable or cause hardship. The client appointed as an executor should be warned not to deal with the assets or otherwise intermeddle in 2. Care and Management of Assets the estate until the client has decided to accept the appointment. Such actions may compromise the client’s As soon as possible after death, the personal repre- ability to renounce the executorship and may attract per- sentative should take steps to safeguard the de- sonal liability. Payment of funeral expenses, acts of ne- ceased’s assets. The lawyer should advise the per- cessity and inquiries into the deceased’s assets and lia- sonal representative that the personal representative bilities do not by themselves amount to intermeddling,

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is not entitled to make personal use of estate assets. ages, guardians, and Social Insurance Numbers for Some of the important steps are as follows: these people should be made. The representative should open a bank account for the estate. (a) searching for cash, securities, jewellery and other valuables, including digital assets, 5. Accounting and Expenses Prior to the Grant and arranging for safekeeping; The personal representative has a duty to keep (b) locking up the residence, including proper records and to be ready to account to the es- changing the locks if needed, and, if the tate. These records should include invoices, receipts residence is not under proper supervision, and full particulars of all expenses incurred by the advising the police and making personal representative. The personal representative arrangements with a security firm to patrol is entitled to be indemnified out of the estate for all the residence; expenses properly incurred. (c) ensuring that there is sufficient insurance However, money expended before the grant of pro- coverage for the deceased’s assets, bate or of letters of administration is potentially at checking the insurance expiry dates and risk. This is particularly true for an administrator, notifying the deceased’s insurance agent or who cannot bind the estate, except with regard to company; reasonable funeral expenses, until the letters of ad- (d) arranging for interim management of the ministration have been issued. And although an ex- deceased’s business until distribution of the ecutor may bind the estate immediately after the estate or sale of the business; death of the deceased, there are many complications. For example, the will may not be the last will (e) notifying financial institutions of the death; or may not be enforceable, and many financial insti- (f) arranging for redirection of the mail, if tutions and other third parties holding assets of the necessary; deceased may be reluctant to deal with the personal representative until probate has been issued. (g) checking mortgages and agreements for sale; arranging for payment of instalments 6. Safety Deposit Boxes as and when due; If a safety deposit box is leased in the name of a de- (h) checking maturity dates on bonds and ceased person, solely or jointly with another person, expiry dates of warrants and share the custodian may not allow any of its contents to conversion rights; be removed until the personal representative or joint (i) checking leases and tenancy agreements, lessee attends to make an inventory of the contents arranging for payment or collection of rent, of the box in the presence of the custodian (WESA, and giving notice if appropriate; s. 183). The will may then be removed, but the custodian normally will permit other contents to be re- (j) preparing an inventory of personal assets, moved only after production of the grant of probate e.g. furniture, furnishings, jewellery, art- or letters of administration. work; consider taking photographs; and (k) arranging for appraisals for the deceased's [§7.05] Preparing to Make the Application assets such as real property, personal assets, for Probate or Administration jewellery and other valuables. 1. Gathering Information 3. Dealing With Liabilities The personal representative should assemble and The personal representative should review the de- bring to their lawyer all relevant information and ceased’s debts and liabilities (e.g. mortgages, leas- documents, including testamentary instruments, in- es, income and property taxes, guarantees), check formation concerning the deceased, information all payment due dates, and decide what arrange- concerning the beneficiaries and other persons in- ments can and should be made for payment or terested in the estate, and documents and infor- release. mation concerning the deceased’s affairs. The lawyer should use client information forms and 4. Preparing to Administer the Estate checklists to ensure that no essential information is The personal representative must identify the bene- overlooked. See the Probate and Administration ficiaries and next of kin, including potential claim- checklists in the Law Society’s Practice Checklists ants for a variation of a will under Division 6 of Manual online (www.lawsociety.bc.ca) and the Part 4 of WESA (if there is a will), including any British Columbia Probate and Estate Administra- common law spouse. A list of names, addresses, tion Practice Manual (Vancouver: CLEBC).

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Many documents and types of information may be Applications for wills notice searches should relevant. The following paragraphs highlight some be sent to: of the important documents that may be applicable. Vital Statistics Agency (a) Testamentary Instruments PO Box 9657 Stn. Prov. Govt. Victoria, BC V8W 9P3 The will itself is not necessarily a single instrument. For example, it may consist of a will The fee (at the time of writing) is $20, plus and codicils, a will with documents incorpo- $5.00 for each additional alias named, payable rated by reference, or several wills which, to the Minister of Finance. A search can also when read together, comprise one will. Other be done using BC OnLine (see www.bc documents might be held to be testamentary online.gov.bc.ca/). instruments pursuant to WESA s. 58, so the Sometimes, even though a wills notice search lawyer must ensure that the client is advised to indicates that a will was executed, the original bring any document that appears to express a document cannot be found. In those circum- testamentary intention to the lawyer for stances, it may be possible to probate a copy, a consideration. draft, or a reconstruction of its contents. Because, under s. 58 of WESA, the court may (b) Income Tax Returns order that data recorded or stored electronically (a “record”) may be a will or a revocation, The lawyer should check previous income tax alteration or revival of a will or state a testa- returns of the deceased to discover assets of mentary intention, searches of a deceased’s the deceased. The lawyer should also ensure electronic records need to be made in case that the deceased’s return for the year preced- there is a document that might be determined ing the year of death is properly filed. The to be such a record. lawyer should also advise the client as to when the final tax return is due for the deceased’s in- Order a wills notice search. A lawyer or a come from January 1 of the year of death up to member of the Society of Notaries Public of the date of death, or should advise the client to British Columbia upon written application in seek timely accounting advice. the prescribed form, or any other person upon written application with a certificate of death, (c) Pension Plan Benefits may ascertain from the registrar general The lawyer should also advise the personal whether or not a wills notice has been filed in representative on Canada Pension Plan death respect of the deceased person (WESA, s. 77). benefits, surviving spouse’s benefits and or- The registrar general issues to the applicant a phan’s benefits, if applicable. The lawyer certificate of wills notice search. The certifi- should also determine if the estate is entitled to cate annexes copies of the most recent notice, death benefits from employment, union or pri- if any, which has been filed in the name or vate pension plans. names specified in the application. The certifi- (d) Life Insurance cate must be filed with the application to court for a representation grant. The lawyer should obtain full particulars of any insurance on the deceased’s life, and de- The wills notice search and the resulting certif- termine that there is no conflict between a ben- icate of wills notice search and the style of eficiary designation in the will and a designa- proceeding of the probate or administration tion made in the insurance policy. documents must, at a minimum, include all names used by the deceased in their lifetime. A beneficiary designation may be revocable or This is particularly important if the assets of irrevocable. Generally, a later designation su- the estate include real property. If title to real persedes a prior designation unless the prior property is registered in a name which the de- designation was irrevocable. An irrevocable ceased used, but which is not identical with the designation cannot be altered or revoked with- name by which the deceased was described in out the consent of the beneficiary as long as the testamentary documents, then a statutory that beneficiary is alive. A designation in a will declaration for the name appearing in the land is revoked when the will is revoked (Insurance title records may be inadequate to transmit real Act, R.S.B.C. 1996, c. 226, s. 50(3)). property in some land registries. Consequently, The personal representative or the lawyer wills notice searches should be done after land should provide a copy of the Certificate of title searches are done and the name on title Death to the life insurance company, obtain should be included in the wills notice search. forms for claiming the proceeds of the policy,

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and request confirmation in writing of the A gift can be made to an executor or trustee. How- death benefit, including dividends, and deter- ever, the will must be clear that the executor intend- mine whether the deceased had borrowed ed to take the gift beneficially and not just legally in against the policy. Also, the cash value on any his or status as trustee of the estate. Further, if a will policies owned by the deceased on the lives of contains a gift to an executor or trustee, the law pre- others must be determined. sumes that the gift is in lieu of executor remuneration, unless the will shows a contrary intention. See §2.21 of the Probate and Estate Admin- istration Practice Manual (Vancouver: 3. Intestacy, Lapse and Ademption CLEBC) regarding irrevocable designations. See Practice Material: Family regarding Fami- If there is no will or the will does not dispose of the ly Law Act, S.B.C. 2011, c. 25 issues. entire estate, the personal representative must be advised regarding intestacy. (e) RRSPs, RRIFs and TFSAs The personal representative must also be advised The lawyer should review any designation of with respect to gifts that may have lapsed or beneficiaries made in respect of Registered adeemed. A gift in a will is said to have lapsed if Retirement Savings Plans (RRSPs), Registered the beneficiary died before the will-maker died; a Retirement Income Funds (RRIFs) and Tax- gift in a will is said to have adeemed if the named Free Savings Accounts (TFSAs). If a valid item was not in existence at the time of the will- designation is made, the benefit does not form maker’s death. part of the estate. If a designation of an RRSP or RRIF has been made by will, the plan must The provisions in WESA dealing with intestacy and be checked to ensure that the designation was lapse are discussed in Chapters 1 and 2. made in accordance with the plan. 4. Choice of Applicant for Letters of 2. Reviewing the Will and Advising Administration After a search of testamentary documents has been When a person dies without a will, s. 130 of WESA conducted, and after the lawyer has ensured that the sets an order of priority for the court when it de- will has not been revoked (in the ways described in cides whom to appoint as administrator of the es- Chapter 2 of these materials), the lawyer should re- tate. A spouse or, with the consent of a majority of view the will and advise the client of its terms. the deceased’s children, a child of the deceased may nominate a person to be the administrator. The ap- The will should be checked for formal validity to plicant for letters of administration must list in the ensure, for example, that it was properly attested. Submission for Estate Grant (SCCR, Form P2) all The lawyer may have to ensure that the will is for- such persons as well as any other person entitled to mally valid in a place outside of British Columbia, receive all or part of the intestate’s estate, and any that is, if the will was made outside of British Co- creditor with a claim exceeding $10,000 and deliver lumbia, if the will relates to land outside of British notice of the application to all of those listed Columbia or if the will-maker was domiciled out- (SCCR 25-2(2)((b)(ii)). side of British Columbia at the time of death. These matters are discussed in Chapter 2. WESA, s. 131 sets priorities for persons applying for grants of administration with will annexed when The will should be checked carefully for any indica- there is a will but the executor has renounced, is tions that documents have been attached (e.g. staple unable or unwilling to act, or where the will does marks) and that any alterations or erasures have not name an executor. been properly executed and attested (see SCCR 25-3(20-23)). The court may, because of special circumstances, such as the insolvency of the estate, appoint a per- The lawyer should review the gifts for any that may son the court considers appropriate to be adminis- be void, revoked or lapsed. A gift to an attesting trator other than one normally entitled (WESA, witness or to the witness’s spouse is usually void if s. 132). there are not two other witnesses who are not beneficiaries, but the court may declare that the gift is It is prudent to have each person entitled to an in- not void if satisfied the will-maker intended to terest in the estate and each person with an equal or make that gift (WESA, s. 43). When a beneficiary prior right to apply for letters of administration proof a specific gift under a will predeceases the will- vide written consent to the application, in order to maker, the gift to that beneficiary may lapse and fall eliminate the risk of competing applications and into residue or may devolve to the beneficiary’s minimize the risk of the court requiring the admin- next-of-kin (WESA, s. 46). istrator to provide a bond or other security.

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A committee may consent on behalf of a mentally from acting as a personal representative of the vic- incompetent person. Neither the Public Guardian tim (Dhaliwall v. Dhaliwall (1986), 6 B.C.L.R. (2d) and Trustee nor the guardian of an infant can con- 62 (S.C.); Re Fenotti Estate, 2014 BCSC 1533). sent on the infant’s behalf. The same prohibitions apply if a person never stands trial for murder but a court finds it is likely A consent must be in writing and, if it is signed by the person would have been convicted had the mat- an individual, should be witnessed by someone who ter proceeded to trial. does not have an interest in the estate. Although it is not required under Rule 25-3, the best practice is to 7. Survivorship file the consents along with the other documents filed when an application is made for a grant of let- The general rule regarding survivorship is outlined ters of administration. in WESA, s. 5 which provides that if two or more persons die at the same time or in circumstances A consent can be withdrawn up until the time an that make it uncertain which person survived the application is heard. others, unless a contrary intention appears in an in- In some situations, it is prudent to ensure that the strument, each person is presumed to have survived applicant is bondable before proceeding with the the others. WESA, s. 10 provides further that a per- application. Normally, no security for the son must survive by five days in order to receive a administration of an estate is required. However, gift under an instrument. the court may require a bond or other form of However, situations arise where this general rule is security if there is an infant or mentally incapable overridden by other statutory presumptions. For ex- beneficiary or on the application of another ample, ss. 83 and 130 of the Insurance Act, beneficiary (WESA, s. 128) (the factors and R.S.B.C. 2012, c. 1 provide that if the life insured procedure are outlined in §10.06(5)). An executor is and the beneficiary die at the same time or in appointed by the deceased and thus is not required circumstances in which the order of death is not to post security. The Public Guardian and Trustee, clear, the beneficiary is treated as having prede- the Official Administrator and trust companies are ceased the insured, unless a contract policy provides also exempt from this requirement. otherwise (WESA, s. 11). Division 11 of WESA provides that where a person died intestate or where there is no executor, the 8. Presumption of Death Public Guardian and Trustee may be granted ad- If a person is missing and reasonable grounds exist ministration. The Supreme Court has held that the for supposing that the person is dead, an application general discretion of the court is not overridden by can be made to the court for an order under s. 3 of the predecessor section of this Division (Re Roberts the Presumption of Death Act, R.S.B.C. 1996, Estate (1987), 26 E.T.R. 71 (B.C.S.C.)). c. 444, that the person is presumed to be dead, either for all purposes, or for those purposes 5. Other Grants of Administration specified in the order. The order constitutes proof of Special circumstances can give rise to special grants death. It enables the personal representative of the of administration that cause variations in the ordi- person presumed to be dead to administer the estate. nary powers of the administrator and the ordinary Determining the actual date of death is not a matter procedure. Special circumstances may include the of presumption; it is determined on the basis of the following: evidence presented (Re Schmit (1987), 12 B.C.L.R. (2d) 186 (C.A.)). Subject to s. 4 of the Presumption (a) an administrator dies leaving part of an estate of Death Act, any distribution of property made in unadministered; reliance on such an order is deemed to be a final (b) an estate is small (i.e. under a prescribed distribution. The property is deemed to be the amount); or property of the person to whom it has been distributed as against the person presumed to be (c) an estate needs interim administration until a dead (s. 5(1)). pending or commenced action against the estate has been concluded. Circumstances which the court will wish to consider before making such an order include: These special grants are described in §10.06(4). (a) the age and health of the missing person; 6. Murder (b) the circumstances in which the person went A person convicted of murder or manslaughter is missing; barred from inheriting any property under the vic- (c) whether the person has relatives whom the per- tim’s will or as an intestate heir of the victim, and son might be expected to contact;

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(d) the likelihood of such contacts being made; debts. This power is extended to real estate by and statute (WESA, s. 162). In this case, however, the power must be exercised jointly by all per- (e) what efforts have been made to locate the sonal representatives. It is unclear whether missing person. there is a power of sale if the sale of assets is See Re Burgess, 2004 BCSC 62; Re Kalinski Estate not required to pay debts and not authorized (1990), 42 C.C.L.I. 127 (B.C.S.C.); and Roderick v. under the will. Supreme Tent of Knights of the Maccabees (1903), (d) Payments for infants 2 O.W.R. 493. A Trustee may make payments for the mainte- 9. Other Duties and Powers of Executors and nance or education of a minor beneficiary out Administrators of the income of the trust property held contin- gently upon the minor attaining 19 or on any The statutory and common law powers of an execu- earlier event, such as marriage (Trustee Act, tor may be restricted or widened by the will. The s. 24). Payment may only be made out of the principal powers of personal representatives are capital property with a court order: Trustee briefly summarized below. Act, s. 25. Payment may be made to the guard- (a) Where there are two or more personal ian, but there is no obligation to do so. As well, representatives most wills provide the personal representative with authority to pay amounts from income or Where there are two or more personal repre- capital to a guardian on behalf of a minor. sentatives, acts done for purposes of the administration of the estate with respect to real (e) Defending actions in representative capacity estate require unanimity. However, acts done A personal representative may defend actions by one respecting personal property are brought against them in their representative deemed to be the acts of them all (that is, each capacity. If the action did not arise out of the of the personal representatives has joint and personal representative’s wrongful act, the per- entire authority over the whole of the personal sonal representative is entitled to a full indem- estate (see Williams, Mortimer and Sunnucks, nity out of the estate in respect of all expenses Executors, Administrators and Probate, incurred. 20th ed., 2013, at 955)). Use caution when advising the personal representative of this power A personal representative cannot maintain or to bind the others, for example, regarding the defend an action where the personal repre- possibility of a conflict of interest. sentative and the estate are on opposite sides. If such a conflict arises, the personal repre- Where the personal representatives become the sentative will either have to resign as personal trustees of a trust in a will, the rules regarding representative or discontinue their involvement trustees apply and unanimity is required in re- as a plaintiff in the action. spect of all trust property unless the trust instrument (for example, the will) provides to the However, WESA now allows a beneficiary to contrary. seek leave of the court to prosecute an action without the need to replace the personal repre- (b) Duty to convert unauthorized or wasting assets sentative first (WESA, s. 151). The granting of and investments leave is discretionary (Bunn v. Bunn Estate, Subject to the terms of the will, there is a duty 2016 BCSC 2146). to examine each asset and investment with a view to maintaining and preserving its value 10. Scope of Lawyer’s Retainer and, in general, to convert, in a reasonable and The lawyer must ascertain the scope of their timely fashion, assets that do not qualify as in- instructions. Is the lawyer only to obtain a grant of vestments for the estate (for example, wasting, probate or letters of administration, or is the lawyer speculative, unauthorized, or reversionary as- also to attend to transmission of assets, to make sets). Subject to the terms of the will, the pro- claims under insurance policies, to prepare income ceeds of converted assets must be invested in tax returns, and to perform other duties? It is the manner provided in ss. 15.1 to 15.6, and important to clarify which duties of the client as 17.1 of the Trustee Act, R.S.B.C. 1996, c. 464. personal representative, if any, are to be delegated (c) Power to sell assets to the lawyer. If the lawyer has been paid from the estate for services that the personal representative At common law, a personal representative has should have performed, the payment will be power to sell personal estate in order to pay deducted from the personal representative’s

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remuneration (Re Lloyd Estate (1954), 12 W.W.R. [§7.07] Guardians and Committees (N.S.) 445 (Man. C.A.)). If a minor is named sole executor under a will, the court It is prudent for a lawyer to set down in writing to must grant letters of administration with will annexed to the personal representative both the lawyer’s duties the minor’s guardian or, if the guardian does not apply, and the lawyer’s understanding of the scope of the to another person the court considers appropriate, includ- instructions. The retainer should advise the client of ing the Public Guardian and Trustee (WESA, s. 134). the right to have the lawyer’s bill reviewed under the Legal Professions Act. A committee, including the Public Guardian and Trus- tee, has the rights, powers and privileges that would be 11. Insolvent Estates exercisable by the patient as the personal representative of a deceased person, so the committee may obtain let- Bankruptcy and insolvency are in the exclusive leg- ters of administration of the deceased person’s estate islative jurisdiction of the federal government. Con- (Patients Property Act, s. 17). The committee of a pa- sequently, in an insolvent estate, the executor may tient who, but for mental incapacity, would be entitled to be ousted by the appointment of a trustee in bank- administer an estate, would then complete the admin- ruptcy at the instance of creditors. The personal rep- istration of the estate in their capacity as committee. resentative who undertakes to administer an insolvent estate under Division 12 of WESA therefore

runs the risk of losing the right to remuneration. The personal representative should be advised to observe the order of priorities for payment of debts laid down in WESA, s. 170, which is similar to s. 136 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3.

12. Estates of Indigenous People If the deceased was an Indigenous person, an officer appointed by the federal government may administer the person’s estate. If the deceased was a member of a Treaty First Nation, consult Division 3 of WESA dealing with the devolution of certain property.

[§7.06] Public Guardian and Trustee as Official Administrator

The death of persons whose estates the Public Guardian and Trustee might administer are often reported to the Public Guardian and Trustee’s office by coroners, police and hospitals. If the deceased has a “fixed place of abode” in British Columbia or died outside British Co- lumbia leaving British Columbia assets, and there is no other person willing and competent to administer the estate, the Public Guardian and Trustee acting in its role as Official Administrator may do so (WESA, s. 165). This may be advantageous where the net value of the estate is small, the estate is insolvent, or there are other problems in administering the estate. Relatives and other persons interested in estates of this kind should be advised of this option. The Public Guardian and Trustee charges fees which are paid from the estate. Section 167 of WESA provides that the Public Guardian and Trustee has certain authority to act as personal representative if it intends to apply for a grant.

Wills 71 The inventory should be kept current throughout the Chapter 8 administration of the estate by recording sales, distributions, investments, and other changes.

[§8.03] Assets and Liabilities

Assets and Liabilities: Valuation The inventory should include every asset and liability of 1 the deceased, although the final disclosure document and Inventory that is submitted to the probate registry need not include assets passing outside the will.

1. Property Passing in the Will [§8.01] Introduction The inventory must include all real and personal This chapter discusses, in general terms, the valuation of property that devolves to the personal representa- assets and liabilities and gives some guidelines on pre- tive, whether the deceased held the property benefi- paring an inventory. Preparing an inventory to be used cially or in a representative capacity. in the administration of an estate can be complicated. Please refer to Chapter 3, Parts III to V, of the British 2. Property Passing Outside the Will Columbia Probate and Estate Administration Practice Property that does not pass to the personal repre- Manual (Vancouver: CLEBC) for examples of an ac- sentative includes the following: cepted format for the inventory and for accurate descrip- tions of particular assets. (a) property of which the deceased was a joint tenant and that passes by law to the surviving joint tenant; [§8.02] Purpose of the Inventory (b) property that by contract or will passes di- The personal representative makes an inventory and val- rectly to a beneficiary other than a personal uation of the deceased’s assets and liabilities at the date representative; for example, insurance pay- of death. The inventory may be used by the personal able to an assignee for value or a named representative for several purposes, including these: beneficiary. Also included are the proceeds of a TFSA, pension plan, RRSP, or RRIF (a) to assist in preparing the Affidavit of Assets and payable to a named beneficiary (see Berkner Liabilities (often referred to as the “disclosure (Estate), 2017 BCSC 619, discussed below); document”), submitted with the application for a grant of probate or administration; (c) property that, although apparently belonging to the deceased, was the subject within the (b) to serve as a checklist to ensure that the assets deceased’s lifetime of division under the are gathered, administered, and distributed; Family Law Act or a community property (c) to comply with the duty to pay debts; regime; and (d) to file an income tax return to the date of death, (d) property held by the deceased as trustee. plus subsequent income tax returns until the es- The devolution of these forms of property is dis- tate is distributed; cussed in §9.02. (e) to assist in preparing the personal representa- Property that does not pass to the personal repre- tive’s accounts; sentative need not be accounted for by the personal (f) to consider the implications on the estate of representative. Disbursements for dealing with that claims for the variation of a will under Divi- property should be kept separate from those associ- sion 6 of Part 4 of WESA; and ated with the administration of the estate and should not appear in the personal representative’s (g) to assist in determining the solicitor’s fees and accounts. It may be necessary for the solicitor to be the personal representative’s remuneration. separately instructed and retained by persons other than the personal representative who have an interest in the property. 1 Updated by Hugh S. McLellan of McLellan Herbert in Febru- ary 2021, September 2019 and August 2017. Previously updated Note also that estate-planning vehicles may influ- by PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jenkins ence greatly what assets are included in the disclo- (2005 and 2006); Margaret H. Mason and Kirsten Jenkins sure statement. Certain assets may be disposed of in (2001); and Diana R. Reid (1995–2000). a secondary will that is not submitted for probate. Most commonly, the secondary will only covers the

Wills 72 will-maker’s interest in private company shares and [§8.05] Valuation shareholder’s loans, as s. 188 of the Business Cor- porations Act, S.B.C. 2002, c. 57, does not require Valuation is part of the process of preparing the invento- a grant of probate to transfer shares. This approach ry. The assets of an estate should be valued for several will save probate fees on the value of the assets reasons, including the following: passing pursuant to the secondary will that is not (a) to determine capital gains and losses for income submitted to probate (Berkner (Estate), 2017 BCSC tax purposes; 619). (b) to calculate foreign taxes arising as a result of Sections 122, 136 and 142 of WESA recognize mul- the death of the deceased; tiple wills may be made in BC. However, the executors in the two wills must be different persons, as (c) to resolve questions arising in the course of ad- the executor applying for probate must swear or af- ministration (for instance, regarding buy/sell firm that they have disclosed all assets they are agreements, the sale or distribution of assets, in- handling: WESA, s. 122 (1)(b) and SCCR 25-3(2). surance against fire and other perils, and determination of option prices); As well, the increased use of alter ego and joint partner trusts has resulted in many assets that (d) to comply with the requirement to disclose value would traditionally form part of an estate falling in the disclosure document; outside the estate. Accordingly, these assets are not (e) to calculate the amount of probate filing fees required to be included in the disclosure document, payable in an application for a grant; and nor are probate fees payable in respect of them. (f) to determine what property transfer tax, if any, is payable. 3. Liabilities This list is not exhaustive. A personal representative may be personally liable for the debts of the deceased to the extent of assets Valuation may be difficult and complex, depending on coming into the hands of the personal representa- the nature of the assets and the particular circumstances. tive. Therefore, it is extremely important that the For instance, the value of a business interest may be af- debts are properly listed and valued in the inventory fected by the terms of a partnership agreement, the arti- of assets and liabilities. Debts should include not cles of association, or a buy/sell agreement existing at only those immediately payable, but also deferred the date of death. debts, contingent liabilities, and guarantees out- If valuation is a problem, and if the estate is of standing. If the debt is or may be disputed, then it significant value, it may be prudent for the personal should be indicated that the validity of debt has not representative to employ a professional appraiser or, in a yet been determined. Particular care is necessary in case of company valuation, an accountant or other describing liabilities in an application for a grant of expert. Even in simple estates, a personal representative administration because consents from creditors may may be well advised to establish the asking price on a be required or the existence of creditors may affect sale by means of one or more appraisals by experts. For bonding requirements. example:

[§8.04] Form of Inventory (a) in a proposed distribution of personal goods to beneficiaries or charities, it may be advisable to have an auctioneer’s appraisal; and There are many acceptable formats for inventories, but the form used should be simple and easy to read. It is (b) if a house is going to be sold or distributed in also important to include in the inventory all assets pass- specie, it may be appropriate to get an inde- ing within and without the estate. pendent appraisal and valuation report from one or more real estate agents. The inventory is used primarily as an accounting record for the estate and the personal representative, and is not The general rule is that the relevant date for purposes of usually the document that will be submitted as a disclo- valuation is the date of death, although there may be sure document with the application for the grant (Form other dates on which valuation is required for tax P10 or P11). If, however, the inventory is complete and purposes. carefully prepared, it can be of great help in preparing the disclosure document.

Wills 73 [§8.06] Authorization to Obtain Information

One of the difficulties encountered at this stage, particularly where there is no executor applying for probate, is that third parties, such as banks, will sometimes refuse to provide the information necessary to complete the Affidavit of Assets and Liabilities (Form P10 or P11) needed for the estate grant application. The Supreme Court Civil Rules have addressed this problem by allowing a person to apply to the court registry for an Author- ization to obtain estate information. The applicant would submit all of the required documents for a normal grant application to the registry except for the Affidavit of Assets and Liabilities of the estate (see SCCR 25-4, and Form P18). SCCR 25-8 deals with the effect of the issuance of an Authorization to obtain estate information. If a third party refuses to provide the requested information within 30 days of delivery of the Authorization, the court may make orders compelling the production of the information and other orders it considers appropriate including costs. Once the applicant has obtained the necessary information and filed the Affidavit of Assets and Liabilities, the application for probate or administration may proceed. It is also good practice to have the executor client execute some simple authorizations allowing third parties to deal with the lawyer on behalf of the executor.

Wills

74 Holding legal title in joint tenancy is not always Chapter 9 conclusive proof that there is a joint tenancy in equity. The parties may intend to hold equitable title in a different manner—for example, as tenants in common or for some other person. It is important to Devolution of Assets1 make the necessary inquiries to determine ownership. Only when there is a joint tenancy in equity will the beneficial interest pass to the survivor.

[§9.01] Types of Assets For example, an elderly parent and an adult child may open a bank account in their joint names using the parent’s funds, with the intent that the child be This chapter divides assets into two categories: able to use the account to deal with the parent’s (a) assets that were property of the deceased and day-to-day expenses. As a result of the Supreme pass by will or on an intestacy to the personal Court of Canada decision in Pecore v. Pecore, 2007 representative; and SCC 17, there no longer is a presumption of ad- vancement in favour of an adult child (that is, the (b) assets that may or may not have been the proper- presumption the transfer was intended to be a gift). ty of the deceased but to which another person Instead, there is a presumption of a resulting trust. may become entitled either by operation of law In a resulting trust situation, legal title to the ac- (for example, joint tenancy), by statute (for ex- count passes to the child upon the parent’s death; ample, survivors’ benefits under the Canada however, equitable ownership of the account re- Pension Plan) or by contract (for example, in- mains in the parent’s estate. surance proceeds, RRSPs). As a result of Pecore, a parent who owns property It is important to distinguish the two types of property jointly with a child and who intends the child to be- because, generally speaking, only assets that pass to the come the sole owner of the property on the parent’s personal representative are subject to the claims of cred- death, should clearly express that intention in writ- itors or to actions regarding the will (for example, varia- ing to rebut the presumption of a resulting trust. tion of wills proceedings under Division 6 of Part 4 of WESA). A joint tenancy that appears to exist may in fact have been severed. Severance of a joint tenancy [§9.02] Assets Not Passing to the converts it into a tenancy in common. There are a Personal Representative number of ways of severing a joint tenancy. The three main ways are by express or implied agreement, by a transfer of property from a joint tenant 1. Joint Tenancies to themselves or to another person, and by a separa- In a tenancy in common, the share of the deceased tion under the Family Law Act, S.B.C. 2011, c. 25. tenant in common passes to the deceased’s estate. Also note that a joint owner must survive for at least In the case of a joint tenancy, the surviving joint five days after the death of the other joint owner, in tenant becomes the absolute owner of the property. order to receive the whole asset by right of With personal property, if there is no indication survivorship (WESA, s. 10(2)). that the parties own the property in shares, the common law presumes a joint tenancy. If the par- 2. Life Insurance Policies and Proceeds ties have taken shares, the presumption is of a ten- The proceeds of an insurance policy may pass by ancy in common. In the case of land, a tenancy in designation outside the will, rather than passing to common is presumed unless a contrary intention the personal representative (Insurance Act, appears in the instrument (Property Law Act, R.S.B.C. 2012, c. 1, ss. 59, 60, 65, 68). While the R.S.B.C. 1996, c. 377, s. 11). ownership of the policy may also pass outside the will pursuant to s. 68, ownership will generally pass through the will. In each case, proceeds payable to a designated beneficiary, other than the deceased insured’s estate, do not form part of the deceased’s estate and are not subject to claims of the 1 Updated by Hugh S. McLellan of McLellan Herbert in Febru- deceased’s creditors. ary 2021, September 2019 and August 2017. Previously revised by PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jenkins (2005 and 2006); and Margaret H. Mason (1995–2000, and with the assistance of Kirsten H. Jenkins in 2001). Reviewed in Janu- ary 2002 by Roger D. Lee for content relating to the Indian Act.

Wills 75 3. Pensions and Retirement Plans The Canada Pension Plan provides for three kinds of benefits: The owner of a retirement savings plan (RRSP) registered under the Income Tax Act, R.S.C. 1985, (a) death benefits that are payable to the per- c. 1 (5th Supp.) or a retirement income fund regis- sonal representative and become the proper- tered under that Act (RRIF) may designate a person ty of the estate; to receive a benefit under the plan upon the owner’s (b) survivor’s benefits that are payable to the death (WESA, Part 5). contributor’s spouse or common law spouse Such a designation: and do not form part of the estate; and (a) must be made in accordance with the re- (c) survivor’s benefits that are payable to chil- quirements of the plan; dren under the age of 18 or children over 18 and under 25 in full-time attendance at (b) may be made by written declaration or by school. These benefits do not form part of will, and, if by will, only where authorized the estate. by the plan; and (c) is revocable. 4. Imminent Death Donation If a valid designation is made, the benefit does not A person may, in expectation of their imminent form part of the estate (WESA, s. 95). death and conditionally upon it occurring, make a gift transferring the legal and beneficial ownership An employee who participates in an employee ben- of personal property to a donee. Such a gift is efit plan may designate a person to receive a benefit known as a donatio mortis causa, and such a gift payable under the plan upon the employee’s death does not form part of the donor’s estate. No gift (see WESA, s. 85). mortis causa of land is possible. Section 8 of the Pension Benefits Standards Act, The gift must be delivered to the donee or there S.B.C. 2012, c. 30 (the “PBSA”), requires every must be some indication made that title to the prop- pension plan to provide for benefits and erty has changed. entitlements on the death of a member or former member of the plan. Section 29(1) of the PBSA For a case on this issue, see Costiniuk v. Cripps Es- provides that an employee, at a minimum, may tate (Official Administrator of), 2000 BCSC 1372. become a member of the plan after the completion of two years of continuous employment with the 5. Powers of Appointment participating employer. Plans may have more A person (the “donee”) given property with the generous vesting provisions. power to appoint the property to whomever the do- The PBSA provides for both pre- and post- nee pleases (including to the donee themselves), is retirement death benefits. With respect to pre- said to have a “general power of appointment.” The retirement benefits, a form of pension is available property subject to the general power of appoint- to a surviving spouse who meets the definition in ment forms part of the donee’s estate. A “special the PBSA (includes same sex partners). If there is power of appointment” is restricted to appointing no surviving spouse, or the spouse executes a property to a particular class of persons that ex- spousal waiver, then a lump sum benefit will be cludes the donee. The property subject to a special payable to the deceased member’s designated bene- power of appointment does not form part of the do- ficiary or to the personal representative of the de- nee’s estate. If a will-maker has been given a gen- ceased member’s estate. eral power of appointment and exercises it by will, the property subject to the power forms part of the With respect to post-retirement benefits, the will-maker’s estate. On the other hand, property pension payable to a member must be a joint over which the will-maker exercises a special pow- pension payable during the joint lives of the former er of appointment in a will does not form part of the member and the spouse (if the member has one). estate. If the will-maker grants a power of appoint- After the death of either the member or the spouse, ment to a donee under a will, then the property the pension continues to be payable to the survivor forms part of the will-maker’s estate. for life. The joint pension for the survivor must not be decreased by more than 40%. Section 35 of the 6. Employment Benefits PBSA provides that the joint option must be chosen unless the spouse executes a spousal waiver. The The spouse of a deceased employee who was sub- waiver is a prescribed form and each pension plan ject to the Workers Compensation Act is entitled to will have a version of it. claim from the employer not more than three months unpaid salary or wages (WESA, ss. 175 to

Wills 76 180). Such wages do not form part of the employ- (a) a deceased who resided in British Columbia ee’s estate and are not liable for the satisfaction of but was married in a community of property debts. jurisdiction; (b) a non-resident deceased with assets in Brit- 7. Contractual and Other Obligations ish Columbia who lived in a community The deceased’s estate is subject to rights and obli- property jurisdiction before death; or gations under court orders and contracts entered in- (c) a deceased who resided in British Columbia to during the lifetime of the deceased, provided that and had property in a community property the obligations survive the death. Examples of the jurisdiction. kind of obligations that could survive death include support orders, marriage contracts, separation In such cases, it may be necessary to obtain legal agreements and buy-sell agreements. advice in the relevant jurisdiction to find out the rules on devolution. 8. Insolvent and Bankrupt Estates 13. Interests in Trusts If a receiving order is made against the deceased’s estate after death, the assets vest by operation of If the deceased was a trustee or a beneficiary under law in the trustee in bankruptcy; the personal repre- a trust, the terms of the trust should be reviewed. sentative has no further standing. The trust documents may indicate whether the deceased’s executor will replace the deceased as trus- 9. Statutory Benefits tee. If the deceased had a beneficial interest, the trust document may indicate whether the de- Statutory benefits that may become payable to the ceased’s estate will receive a benefit. spouse, children or other dependants, such as compensation under the Family Compensation Act, 14. Designated Beneficiary Investments R.S.B.C. 1996, c. 126, compensation for spouses under the Workers Compensation Act, R.S.B.C. Some types of investments, such as segregated 1996, c. 492 in fatal cases, and I.C.B.C. “no fault” funds and Tax-Free Savings Accounts, allow the death benefits, do not form part of the estate. owner of the investment product to specify a beneficiary of the investment product on the death of the 10. Voluntary Payments owner. An employer may make voluntary payments directly to a person in recognition of the deceased em- [§9.03] Assets Passing to the Personal ployee’s services. These payments do not form part Representative of the estate. At common law, personal property devolved at death 11. Family Property upon the personal representative, but real property devolved upon the heir. WESA, s. 162, provides that real The Family Law Act, S.B.C. 2011, c. 25, creates a property devolves to and vests in the personal tenancy in common in family property as defined in representative. s. 84 of the Act upon the separation of spouses. The portion that belongs to the deceased’s spouse does If there is a will appointing an executor, the devolution not form part of the deceased’s estate but a portion takes effect from the moment of death, subject to the of the surviving spouse’s assets may ultimately executor’s right to renounce. form part of the deceased’s estate once the property If a person dies intestate, their estate vests in the court division issues under the Family Law Act have been until an administrator is appointed. When the court ap- determined. points an administrator, the appointment relates back to the death (WESA, s. 135). The devolution of property on 12. Community of Property an intestacy is described in Chapter 1. The most frequently encountered community of property jurisdictions are Washington, California [§9.04] Conflict of Laws and Quebec. Assets that may appear to be part of the deceased’s estate may be subject to division If there is a grant of probate or letters of administration with the surviving spouse, or possibly a set distri- in British Columbia and some of the estate assets are bution will be imposed on the asset. Watch for situ- located outside of the province, the personal representa- ations such as the following: tive must obtain control of and administer those foreign assets.

Wills 77 1. Immovables where they are payable, except that if the deceased was resident in British Columbia and the insurance company Generally, immovable property (such as an interest is licensed to carry out business in British Columbia, the in land) passes pursuant to the law of the jurisdic- policy is situated in British Columbia. tion where the land is situated—the lex situs. It is necessary first to consult the foreign law to see if At common law, the location of bank accounts and simi- the British Columbia personal representative has an lar deposits is the place where the accounts are kept. The entitlement to that property. This may vary, de- location of simple contract debts is the deceased debt- pending on whether the personal representative is or’s residence at death. The location of stocks is gener- an executor or administrator. ally the place where they can be transferred at death (or if they can be transferred in more than one place, where When there is a will that is recognized in the for- the deceased would have been most likely to transfer eign jurisdiction, the British Columbia executor them). For an interesting decision on the common law will need either to get an ancillary grant or to reseal rules as they relate to the location of uncertificated secu- the British Columbia grant in the foreign jurisdic- rities, see Bernstein v. British Columbia, 2004 BCSC 70. tion in order to deal with the immovable assets in The location of interests in trusts is the place where they that jurisdiction. The law that applies to the appli- are being administered. The location of an interest in a cation and to the administration of the immovable business, trade or profession is the place where it is assets is the law of the foreign jurisdiction. principally carried on. When there is an intestacy in British Columbia, or a Canada Savings Bonds (and likely treasury bills) are will made in British Columbia that is not recog- “specialty debts,” that is, debts due from the Crown pur- nized in the foreign jurisdiction, the immovable as- suant to statute. Such securities are sited in the province sets in that jurisdiction will devolve according to where their existence is documented (Royal Trust Co. v. the law of that jurisdiction. In those circumstances, Attorney General of Alberta, [1930] 1 D.L.R. 868). This the personal representative in British Columbia will case was argued successfully such that Canada Savings have to apply under the law of that jurisdiction for Bonds held by the deceased at an institution outside an ancillary grant. British Columbia were “without” the province for the purpose of the probate filing tax applicable in British 2. Movables Columbia. Generally, movable property (all property that is Under the Probate Fee Act, S.B.C. 1999, c. 4, probate not immovable) passes under the law of the de- fees are based on the “value of the estate”, which in- ceased’s domicile. The foreign jurisdiction may or cludes: (a) real and tangible personal property of the may not require the personal representative in Brit- deceased situated in BC and (b) if the deceased was or- ish Columbia to do something in order to adminis- dinarily resident in BC immediately before death, the ter the movable asset in that jurisdiction (e.g. to ob- intangible personal property of the deceased, wherever tain an ancillary grant, to reseal a grant, to obtain a situated, that passes to the personal representative. The tax clearance). In some cases, a foreign financial Probate Fee Act permits the Lieutenant Governor in institution may allow the personal representative to Council to make a regulation defining “situated in Brit- gather in the foreign asset on the basis of the Brit- ish Columbia” for the purposes of levying the probate ish Columbia grant. Practice differs in different ju- fee. While awaiting the passing of regulations, the regis- risdictions and for different types of assets. If per- try has issued guidelines for personnel to follow. These sonal property relates to immovable property, the guidelines do not have the authority of regulations, and personal property may be governed by the law of in some instances may not comply with the common law the jurisdiction where the immovable property is location rules. located (WESA, s. 82). If there are assets on First Nations reserve land, there [§9.05] Location of Assets may be tax implications and other complications, especially if the asset is real property. The location (the “situs”) of an asset may be important in determining other matters besides its devolution. For example, an asset will generally be liable for any death duties or probate filing fees that apply in the jurisdiction in which it is located. At common law, the location of tangible personal property (bearer securities, debts under seal, bonds and debentures, and insurance policies under seal) is the place where they are physically located at death. The location of insurance policies that are not under seal is the place

Wills 78 Domicile is a question of mixed law and fact. An Chapter 10 individual who has mental and legal capacity can acquire a domicile of choice by residing in a jurisdiction with the intention of residing there permanently or indefinitely. Residence alone is not sufficient to create a domicile of choice; it must be accompanied by the Applications for Probate and intention to reside permanently or indefinitely in the 1 new jurisdiction. If the domicile of choice is abandoned Administration and no new domicile of choice arises, the domicile of origin revives. Section 28 of the Infants Act, R.S.B.C. 1996, c. 223 con- [§10.01] Introduction tains rules for determining the domicile of an infant. Typically, the domicile of origin of an infant is the dom- This chapter deals with the procedures and documents to icile of the parent(s) with whom the infant resides. obtain grants of probate and administration when the Section 1 and Part 6 of WESA give the Supreme Court matter is not contentious. This chapter focuses on jurisdiction for administering estates. Note that masters situations where the validity of the will is not in issue. have jurisdiction to hear all interlocutory applications Contentious probate matters are discussed in under the Supreme Court Civil Rules as well as certain Chapter 18. final orders, including orders in non-contentious matters This chapter deals only with grants for residents. See under SCCR, Part 25 (Rules 25-1 to 25-16). Chapter 8 of the British Columbia Probate and Estate Administration Practice Manual (Vancouver: CLEBC) [§10.03] Practice for procedures on grants for estates of non-residents where a foreign grant has been issued. Part 25 of the Supreme Court Civil Rules governs the This chapter uses the terminology and procedure man- procedure and documents required for administration dated by the Supreme Court Civil Rules (the “SCCR”). and probate of estates. WESA sets out the substantive procedures, and individual sections make references to [§10.02] Jurisdiction the Rules to provide details and forms. While WESA does codify much of the law and practice The first step is to determine whether the court has ju- that was previously found only in the jurisprudence, risdiction and which law will apply. The courts in Brit- there are still some situations that are not covered by ish Columbia assume jurisdiction if the deceased was WESA and Part 25 of the Supreme Court Civil Rules. domiciled in British Columbia or had assets in British When WESA, the SCCR or other enactments do not cov- Columbia at the date of death. The exception to this is if er a particular non-contentious matter, the court com- the deceased was an Indigenous person, registered as an monly refers to the practice and procedure described in Indian, in which case the estate may be probated through Tristram and Coote’s Probate Practice, 27th ed., 1989, the Indian Act, R.S.C. 1985, c. I-5. and MacDonell, Sheard and Hull on Probate Practice, In most circumstances, probate is applied for where the 5th ed. Toronto: Carswell, 2016. deceased was domiciled. The domicile of the deceased Students who work in this area should become familiar at the date of death determine several issues, including: with the British Columbia Probate and Estate Admin- (a) applicability of tax legislation; istration Practice Manual (Vancouver: CLEBC), Chap- ters 5 and 6. These chapters include some directions for (b) devolution of movables (typically personal document preparation. The comments in these chapters property); and help when dealing with applications where the standard (c) proceedings to vary wills under Division 6 of documents need to be modified. Part 4 of WESA. [§10.04] Place and Time of Application

1 Updated by Hugh S. McLellan of McLellan Herbert in February An application for a grant of probate or administration 2021, September 2019 and August 2017. Previously updated by may be made in any registry of the Supreme Court, re- PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jenkins gardless of the residence of the deceased or the personal (2005 and 2006); Peter W. Bogardus (2000); Peter W. Bogardus representative. Second and subsequent grants of probate and Mary B. Hamilton (1996); and Mary B. Hamilton (1995). or administration are done by amendment or revocation Reviewed in January 2002 by Roger D. Lee for content relating to of the original grant and must be made in the registry the Indian Act. where the original grant was issued (SCCR 25-5).

Wills 79 [§10.05] Probate Applications necessary for the applicant to set out the proposed distribution. 1. Documents Required for a Typical Probate Assets of the deceased that do not pass to the Application personal representative do not need to be For the purposes of this section, a “typical” probate shown on the disclosure document. application is one in which the executor named in (f) Affidavit of Delivery (Form P9) of notice in the will is making the application and the deceased Form P1 given under WESA, s. 121, and was domiciled in British Columbia. SCCR 25-2 with a copy of the notice attached These documents are required for a typical applica- as an exhibit. tion, as set out in SCCR 25-3: (g) Cheque for probate filing fees. (a) Submission for Estate Grant (Form P2). This Some additional documents that will be required form sets out the type of grant being sought, with certain types of applications are as follows: information about the deceased, information about the applicant, the documents filed with (h) When, for example, a beneficiary cannot be the Submission, and further details depending located or dies subsequent to the deceased’s on whether the application is for probate, ad- death but prior to the application for the grant, ministration, administration with will annexed an order pursuant to SCCR 25-2(14) dispens- or in relation to a foreign grant. ing with notice. (b) Certificate of wills notice search. Both the (i) When, for example, the attestation clause in certificate and Form P2 must set out all names the will is incomplete or missing altogether, of the will-maker used in the will and any ad- an affidavit of execution of the will (SCCR ditional names or aliases in which interests in 25-3(2)(b)(i)(B) and the appropriate affidavits real property are registered. The applicant referred to in Form P4, para. 6(a)). must file a certificate of wills notice search, To ensure that the probate registry accepts an ap- even if the results of the search are negative. plication, it is important to include in each docu- (c) Affidavit of Applicant. The affidavit is in ment all the information that is required by the reg- Form P3 for straightforward situations and istry, and to use the prescribed forms. Form P4, P5, P6, or P7, for other applications. The affidavit requires a number of statements, 2. Other Affidavits May Be Required including that a diligent search for a Additional affidavits in support of an application testamentary document of the deceased has for probate may be required, notably those referred been made and the will is the last known will to in Form P4, such as the following: of the deceased. (a) an affidavit to explain missing attachments to (d) Original will, any codicils, and any documents a will or codicil (Form P4, para. 7(c)); that have been incorporated into the will by reference. These are submitted separately with (b) an affidavit to explain alterations to a will or the application (do not undo the staples on an codicil made before or after execution original will for photocopying or any other (Form P4, para. 7(a)); reason, or staple the will to any document). (c) an affidavit to explain erasures and oblitera- (e) An Affidavit of Assets and Liabilities tions made to a will or codicil before or after (Form P10) attaching as an exhibit a State- execution (Form P4, para. 7(b)); ment of Assets, Liabilities and Distribution (Missing attachments, alterations, and erasures (the “disclosure document”) disclosing: can affect the validity of the will, and lawyers (i) all assets and liabilities of the deceased, who undertake any work in the estates area are regardless of their nature, location or urged to review the relevant subrules of value, which pass to the applicant as the SCCR, Part 25 and the provisions of WESA, deceased’s personal representative Divisions 1, 4 and 5 of Part 4); (WESA, s. 122); and (d) an affidavit of execution (Form P4, para. 6(a)), (ii) all property in which the deceased had a sworn by one or more of the subscribing beneficial interest, not merely those witnesses, or by a person present at the assets in which the deceased had both a execution, or by a person setting out the legal and beneficial interest. Note circumstances of execution. The purpose of although this form refers to the such an affidavit is to raise a presumption of “Distribution” in the title, it is not proper execution in order to show that the will

Wills 80 was executed in accordance with the 4. Probate Fees requirements set out in Division 1 of Part 4 of Probate filing fees must be paid to the court registry WESA, in these circumstances: before a grant will be issued. These fees can be (i) there is no attestation clause; fairly substantial, depending on the value of the estate. It is important to determine, in advance, how (ii) the attestation clause does not adequately the fees will be paid. In most cases, the financial or clearly set out that the will or codicil institution where the deceased had their bank ac- has been executed in accordance with counts will release the appropriate amount. Upon WESA; or the registrar providing a statement confirming the (iii) there is some doubt about the due execu- amount required to be paid, the financial institution tion of the will (for example, the will- (assuming it is holding sufficient funds to the credit maker printed their name or only signed of the deceased) may issue a draft, payable to the with initials); Ministry of Finance, for the amount. Alternatively, the executor or one of the beneficiaries may be pre- (e) if the attestation clause does not deal with the pared to lend the money to the estate to enable the special circumstances noted below, an affida- grant to be issued. vit (Form P4, para. 6(c)) to show that the will was read over, or otherwise to establish the Section 1 of the Probate Fee Act, S.B.C. 1999, c. 4 will-maker’s knowledge of the contents of the provides that probate fees are payable on the gross will and how the will was executed: value, as deposed to in the Statement of Assets, Li- abilities and Distribution, of all of the following (i) when the will-maker was blind or illit- that pass to the personal representative at the date erate or did not understand English; or of death: (ii) when the will-maker signed by a mark or (a) the real and tangible personal property of directed another person to sign on the the deceased situated in British will-maker’s behalf; Columbia, and (f) an affidavit to establish the date when there is (b) if the deceased was ordinarily resident in doubt as to the date on which a will was exe- British Columbia immediately before the cuted (Form P4, para. 6(d)), or doubt as to date of death, the intangible personal when the deceased died. property of the deceased, wherever situated. 3. Procedure In other words, if the deceased was “ordinarily res- Pursuant to WESA s. 129(3) and SCCR 25-4(1), ap- ident in British Columbia immediately before the plication for most grants, if unopposed and compli- date of death,” all of the deceased’s assets, except ant with the Rules, including applications for a for real and tangible personal property physically grant of letters of administration, need not be spo- located outside of British Columbia, will be subject ken to if the documents filed in support of the ap- to probate fees. plication are in order; in that case the Registrar issues the grant in Form P19 upon payment of the Practitioners have criticized the inclusion of intan- probate fees. gible personal property outside of BC (e.g. securities without certificates transferable at a location If the matter does not fall in the above category, the outside of BC) in the calculation of probate fees registrar will issue a notice identifying why the ap- because under it the same assets can be subject to plication has been rejected (SCCR 25-4(4)). In probate fees in more than one province, and unlike some cases, the applicant may be able to correct the some provinces, BC has no upper limit on probate application or supply additional material to satisfy fees despite the fact the work of the probate registry the registrar. If not, then the matter must be dealt is similar whether an estate is worth $100,000 or with by the court under SCCR 25-9. The applicant $100,000,000. must file a requisition, a draft order, the material supplied by the registry (i.e. the notice of rejection) A court filing fee of $200 is payable for commenc- and affidavit or other evidence supporting the ap- ing the application for the grant. No filing fee is plication. The court may proceed by issuing a desk payable if the value of the estate does not exceed order, direct that the matter be spoken to in cham- $25,000 (Supreme Court Civil Rules, Appendix C, bers, or direct that an application be made to prove Schedule 1, Item 1). the will in solemn form. If the court approves the For estates with a value of more than $25,000, the application, the registrar will issue the grant. following additional fees are payable under the Probate Fee Act:

Wills 81  $6 for each $1,000 or part of $1,000 of estate (iii) persons entitled on an intestacy or a par- value in excess of $25,000, up to $50,000; plus tial intestacy, even if there is a will and no apparent intestacy;  $14 for each $1,000 or part of estate value in excess of $50,000. (iv) if there is no will, to creditors of the deceased whose claims exceed $10,000; No probate fee is payable under the Probate Fee Act if the estate’s value does not exceed $25,000. (v) if the deceased was a Nisga’a member or a member of a treaty first nation, the For an example of how these fees are calculated, if Nisga’a or treaty first nation; an estate has a gross value of $124,200, the total fee payable will be: (vi) to any person the court orders should get notice; and  Court Filing Fee $200.00 (vii) to any person that served a citation on  Additional Fee the applicant. (a) (50,000–25,000) ÷ 1,000 x $6 $150.00 Generally, it is prudent to resolve any doubt as (b) (125,000–50,000) ÷ 1,000 x $14 $1,050.00 to whether someone should be given notice under SCCR 25-2 in favour of giving notice,  Total $1,408.00 even if the will-maker has been out of touch Generally, probate fees will not be payable on as- for a long time or it appears that a gift will sets that were situated on reserve lands, if owned probably fail, or if the identity of the benefi- by a registered Indian at the time of death (the Indi- ciary is unclear from the will but the benefi- an Act, R.S.C. 1985, c. I-5). ciary is arguably intended to be included. As well, because a “spouse” includes persons liv- 5. Notice Required Under WESA ing in a marriage-like relationship and since spouses are entitled to notice, anyone who Section 121 of WESA requires that notice of an ap- could be considered a spouse should be given plication for a grant must be provided to specified notice, even if a court has not yet formally de- parties who are or may be beneficially interested in termined that person’s status as a spouse. Sim- the estate as set out in the Rules. Section 121 ap- ilarly, if there is any doubt if a spouse was plies to nearly every application for a grant, includ- separated, notice should be given. (See WESA, ing a grant of probate or letters of administration. s. 2, for the definition of a “spouse” and when The notice must be provided at least 21 days prior persons cease to be spouses.) to the application for probate (SCCR 25-2(1)). The Public Guardian and Trustee is not required to pro- If there is a survivorship clause in the will and vide the notice (SCCR 25-2(15)). Notice is not re- the survivorship period is reasonably short, or quired if the will has been proven in solemn form in the five day survivorship rule in s. 10 of an application for that purpose and the required WESA applies, it may be advisable for the ap- persons were served with the proof in solemn form plicant to wait until its expiry. Otherwise it application (SCCR 25-2(16)). Failure to give the would be necessary to send notices to two dif- notice required by s. 121 may be grounds for hav- ferent sets of beneficiaries based upon wheth- ing a grant set aside, and may also affect the limita- er or not the event contemplated in the survi- tion period for bringing a proceeding to vary wills vorship clause occurs. under WESA Division 6 of Part 4 (see Desbiens v. The court, on application, has the power to Smith Estate, 2008 BCSC 696 and Shaw v. Rein- vary the class of persons entitled to notice and hart, 2004 BCSC 588). to dispense with the requirement of notice (a) Entitlement to Notice (SCCR 25-2(14)). For example, the court may require notice to be given to beneficiaries Under SCCR 25-2(2), notice must be given to: under a prior will of the deceased, so those (i) executors and alternate executors named persons may then qualify to file a notice of in the will and any person that has a pri- dispute under Rule 25-10. or or equal right to make an application (b) Methods of Giving Notice for a grant; SCCR 25-2(1) requires that the notice re- (ii) beneficiaries under the will, including quired under s. 121 of WESA be “delivered” to both residual and contingent each person entitled to it. Delivery may be by beneficiaries; personal delivery, ordinary mail, email, or other electronic means to the address provided by the person for that purpose. Delivery of the

Wills 82 notice occurs, if the form of notice is sent by applicant must deliver the notice to the ordinary mail, on the date of mailing, and if personal representative of the deceased the form of notice is sent by email or other person but if the personal representative is electronic means, on the date it is transmitted, not known, the applicant must apply for but delivery by email or electronic means only directions and the court may order that occurs if there is a written acknowledgment of delivery is dispensed with or provide receipt (SCCR 25-2(5) to (7)). There is no re- other directions for delivery. quirement to prove receipt of a notice that has (iv) Missing persons been mailed. However, before mailing, the executor must make reasonable efforts to verify If the whereabouts of a person entitled to that the address is current, even when the will- notice are unknown, the applicant must maker has long been out of touch, and if it is apply to court under the general provision not, make an effort to trace the current address for an order varying the class of person (Desbiens v. Smith Estate, 2008 BCSC 696). entitled to notice or dispensing in whole or in part with notice (SCCR 25-2(14)). Delivery of the notice to a person other than To obtain such an order, the personal the person ordinarily entitled to delivery may representative must disclose in an be required in certain situations: affidavit what efforts have been made to (i) Minors (SCCR 25-2(8) and (9)) locate the missing person. The extent of the efforts that must be made depends on Where a beneficiary who is entitled to no- the circumstances. tice is or may be a minor, notice must be given as follows: (v) Unborn and unascertained contingent beneficiaries  if the minor resides with all of the minor’s parents, to all parents; The Probate Registry appears to require that notices be sent to the Public Guardian  if the above does not apply, to the and Trustee on behalf of unborn and minor’s parent or guardian responsi- unascertained contingent beneficiaries, ble for financial decisions; although the authority for this practice is  if the above does not apply, to the unclear. address(es) where the minor resides; When notice is delivered to the Public and Guardian and Trustee, contact information  to the Public Guardian and Trustee. for every other person entitled to notice must accompany it (SCCR 25-2(13)). However, notice is not required to be sent to the Public Guardian and Trustee if the Also, if a notice of application for a grant applicant is executor or alternate executor was delivered to the Public Guardian and and the minor is not a spouse or child of Trustee, the court must not issue a grant the deceased and the deceased’s will cre- until the written comments of the Public ates a trust for the minor and there is a Guardian and Trustee are provided, unless trustee (SCCR 25-2(9)). the court otherwise orders (WESA, s. 124). (ii) Persons with a mental disorder (SCCR (c) Formal requirements 25-2(10) and (11)) SCCR 25-2(3) specifies that the notice be giv- Where a person who is entitled to notice is en in Form P1. If there is a will, codicil, or or may be mentally incompetent or has a other testamentary document, a copy of it committee (or the equivalent of a commit- must accompany the notice. In addition to tee appointed outside of BC), the notice identifying information, the form of notice al- must be given both to the committee so provides recipients with some information where there is one, unless the committee on their rights in relation to challenging the is also the applicant, and to the Public grant, making spousal claims, seeking to vary Guardian and Trustee. If there is no com- the will, seeking legal advice, applying for se- mittee or extraprovincial equivalent, de- curity for administration, obtaining an ac- livery of the form of notice to the person counting, as well as information statements is also required. that a grant may be made after 21 days and no further notice may be given to the person. (iii) Deceased persons (SCCR 25-2(12)) If there is a will or a foreign grant, a copy of If a beneficiary survives a will-maker but the testamentary instrument and foreign grant dies before the grant is applied for, an

Wills 83 (if there is one) must also be delivered (SCCR (b) If the will does not deal with a specific 25-2(1)(b)). situation but names more than one executor, one or more of the executors If a notice must be sent to the Public Guardian can apply for a grant of probate stating and Trustee (for example, whenever a minor is why the remaining executor cannot apply entitled to notice), the notice must be accom- (e.g. deceased) or reserving the right of panied by copies of all documents filed with that person to apply at a later date for a the court in respect of the application (SCCR grant (e.g. just unavailable) (SCCR 25-3(11)), together with a cheque for the fee 25-4(8)). to review the documents. (c) If the will does not deal with a specific SCCR 25-3(2)(f) requires an Affidavit of De- situation and does not name another ex- livery in Form P9 be filed with the application ecutor, then a person may apply for ad- for an estate grant. The person that actually ministration with will annexed. does the delivery (e.g., a staff member of the applicant’s law firm) must swear the affidavit. Although the Submission for Estate Grant More than one Affidavit of Delivery can be (Form P2) and the several forms of Affidavit of filed if appropriate. Applicant (Forms P3, P4, P5, P6, and P7) allow for these situations, additional affidavits might be While the Affidavit of Delivery confirms no- required. Also note that SCCR 22-3(1) allows tice was sent to the named persons, it is the prescribed forms to be varied as the circumstances form of Submission for Estate Grant require. (Form P2) that sets out the names of the deceased’s spouse, children, beneficiaries, intes- Events taking place after the grant may also affect tate heirs, and citors to be provided with the the identity of the personal representative. In some notice. The Affidavit of Applicant (Form P3, situations, the executor may continue; in other cas- P4, P5, P6, or P7) includes a statement that es, another person may obtain a grant. The follow- the affiant believes the P2 Submission to be ing are examples of special situations arising after correct and complete. the grant has issued. The form of notice does not include a (a) Surviving Executor sentence referring to the rights of a spouse If two or more executors prove the will with respect to a spousal home as defined in and one of them dies, and no alternative s. 1 of WESA, even though s. 27(1) of WESA executor was named, the surviving execu- requires the applicant to give the spouse such tor(s) will continue unless the will re- notice if a spousal home is passing on an quires a minimum number of executors intestacy or, if the deceased left a will, is not greater than the number surviving. disposed of by the will. In those circumstances, a separate notice to the spouse (b) Chain of Executorship informing the spouse of the right to acquire If the sole or last surviving executor dies the spousal home must be given. There is no before completing the administration of form specified for this notice. the estate, and no alternate was named, 6. Variations of Grant — Executor Cannot Act the executor of that deceased executor will become the executor of the original Events may have taken place since the execution of will-maker once the deceased executor’s the will that make it impossible for the executor will has been proved (WESA, s. 145). This named in the will to apply for the grant. For exam- rule is referred to as a “chain of executor- ple, the executor may predecease the will-maker, ship.” It applies only if the executor renounce, be disqualified, or be missing. An indi- named in the will has been granted pro- vidual may be disqualified from making an applica- bate of the will before their own death, tion for several reasons, including infancy, incom- and each will in the chain has been pro- petence, ceasing to be a spouse (WESA, s. 56), con- bated. flict of interest and criminal conviction. (c) Second Grant There are three different kinds of situations: If a grant has issued, and the sole execu- (a) If the will deals with a specific situation tor dies, wishes to be discharged or is and names an alternate executor, that unwilling or unable to act, and an alter- alternate executor can apply for a grant of nate was named to succeed the executor, probate. a “second grant” may issue.

Wills 84 (d) Failure of Executorship (b) Proof of a Copy of a Will If the sole or last surviving executor dies If an original will or codicil has been lost, leaving no will, wishes to be discharged, mislaid, destroyed or is not available, the or is unable or unwilling to act before the applicant should use Form P4 to address the estate has been fully administered, an problem. The registrar may require the matter application may be made for a grant of to be dealt with by application to the court letters of administration de bonis non under SCCR 25-9. with will annexed to a new personal If the original will was last known to be in the representative. possession of the will-maker and it cannot be (e) Double Probate found, then in order to probate the will, the executor must rebut the presumption that the An executor who has reserved the right to will-maker destroyed it with the intention of apply for a grant may, at any time after revoking it. the initial grant and before the administration of the estate is completed, either re- (c) Proof of a Copy of a Will Retained by an Of- nounce or prove the will by applying for a ficial in another Jurisdiction grant. The registry will issue an addition- On an application for an ancillary grant, when al grant. No additional fee is required. a grant of probate or the equivalent was issued Where a personal representative has died, SCCR in a foreign jurisdiction, making the original 25-14(1.2) governs the procedure to replace the will unavailable, court-certified copies of the personal representative. In other situations, the ap- foreign grant and the will are required (SCCR plicant must apply to the court to amend the grant 25-3(3)(b)). (SCCR 25-5(3)). The application for an amended (d) Cessate Grant (Limited in Duration) grant must be made at the registry where the original grant was issued using the original probate file If an original grant is limited for a specific pe- number. If the applicant was also the person to riod of time or until the happening of a certain whom the original grant was issued, then the appli- event (such as, for example, the executor cant must deliver the original grant and all certified named in the will attaining the age of majori- copies when filing of the application record. If the ty) then, upon the expiration of that time or applicant was not the person to whom the original the happening of the event, the original grant grant was issued, notice of the application must be will cease to have any effect and a second given to that person, and that person must deliver grant, referred to as a cessate grant, is made the original grant to the probate registry at least one (WESA, s. 134). It appears that an application day before the hearing of the application. to court under SCCR 25-5(3) may be required to revoke or amend the initial grant. 7. Special Forms of Probate (e) Grant Save and Except Caeterorum (Limited Some examples of special forms of probate follow. as to Powers) The several forms of Affidavit of Applicant (Forms A will-maker may appoint one executor for a P3, P4, P5, P6, and P7) allow for these forms of special purpose in respect of a specific portion probate, but additional affidavits might be required. of the estate (for example, as the executor of a Also note that SCCR 22-3(1) allows prescribed specific property or fund), and another execu- forms to be varied as the circumstances require. tor for all other purposes. (a) Executor According to the Tenor of a Will If the two executors apply for a grant at the When a person is not expressly named in the same time, a single grant issues in which the will as an executor but is directed by the will powers of each executor are distinguished. If to perform some duties which an executor the general executor applies for a grant first, a would typically perform, that person may be grant will issue to the general executor “save able to apply to become an executor according and except” that portion of the estate in to the tenor of the will. For example, the will respect of which the limited executor is names as executor, a partner in a specified law appointed. firm. The registrar might require the matter to If the limited executor applies for a grant first, be dealt with by application to the court under a grant will issue to the limited executor SCCR 25-9. stating the specific purpose or part of the estate over which that executor has authority. The general executor then takes probate

Wills 85 “caeterorum” (i.e. of the balance of the Additionally, the following documents may be re- estate). quired for certain types of applications: (f) Grant Limited as to Subject Matter (h) If applicable, an order of the court, made on application, that varies the class of persons If the executor will only receive some of the entitled to notice and dispenses with the re- assets passing to the personal representative, quirement of notice (SCCR 25-2(14)). then the executor’s powers to administer the estate are limited to those assets. For example, (i) Consents of all persons having a prior or equal the deceased may have one will in respect of right to apply for letters of administration to property situate in British Columbia, naming the appointment of the administrator (with or one person as executor, and another will in without bond). Such consents are not required respect of property situate in another country, but the best practice is to obtain them and to naming another person as executor. file them with the application. Reference should be made to WESA, s. 130, to [§10.06] Administration Applications determine priority. A spouse has the highest priority and may nominate a person to be ad- 1. Documents for Typical Administration ministrator. This nominated person also takes Application priority over the deceased’s children. The children follow the spouse in priority and the For the purposes of this section, a “typical” applica- child nominated by the majority of the chil- tion for letters of administration means the de- dren has next priority, followed by another ceased died intestate, an intestate successor is mak- person nominated by the majority of the chil- ing the application, there are no infants or mentally dren. After this comes a child that does not disordered persons beneficially interested in the es- have the consent of a majority of children. tate, and all other persons beneficially interested This is followed by the deceased’s next of kin have consented to the appointment of the adminis- having the consent of a majority of the intes- trator without bond. tate successors, followed by the deceased’s These documents are required for such an next of kin not having the consent of a majori- application: ty of the intestate successors. Finally, the court may appoint any other person the court (a) Submission for Estate Grant in Form P2. determines is appropriate, including the Public (b) Certificate of wills notice search. Guardian and Trustee, with consent. (c) Affidavit of Applicant for Grant of Admin- For direction on preparing documents for a grant of istration Without Will Annexed (Form P5). administration, consult the British Columbia Pro- Among other things, in the Affidavit the ap- bate and Estate Administration Practice Manual plicant must swear to having made a diligent (Vancouver: CLEBC) §6.5 to §6.25. Prepare each search and believing that the deceased died document in accordance with the guidelines to en- without having left any will, codicil, or testa- sure that the court registry accepts the application. mentary document. Supreme Court Civil Rule 25-3(14) requires the applicant to search in all 2. Procedure places that could reasonably be considered a The procedure for applying for a grant of letters of place where a testamentary document may be administration is the same as the procedure for ap- found, including where the deceased usually plying for a grant of probate of a will (see kept documents. §10.05(3)) as is the payment of probate fees (see (d) Affidavit of Assets and Liabilities (Form §10.05(4)). P10). A Statement of Assets, Liabilities and The applicant must give notice to various persons Distribution (commonly referred to as the as required by WESA and the Supreme Court Civil “disclosure document”), is exhibited to this Rules in order to complete the Affidavit of Delivery affidavit. Although the title of the exhibit (see §10.05(5)). refers to distribution, it is not required that the applicant set out the proposed distribution. 3. Intestate Successor Not Consenting to Application (e) Affidavit of Delivery (Form P9) (SCCR 25-2). If there are intestate successors who have a prior or (f) Notice in Probate Form P1, attached as an ex- equal right to apply for the grant and who have not hibit to the Affidavit of Delivery. consented, the applicant should apply to the court (g) Cheque for probate fees. for the estate grant under SCCR 25-9 and, in accordance with SCCR 4-3, serve the documents for

Wills 86 the application on those not consenting. The usual the right to distribute the estate and is subject time limits for service allowed under the Supreme to the control of the court (WESA, s. 103). Court Civil Rules for an application under SCCR (e) Administration by Attorney 8-1 must be observed. When a person entitled to administration re- 4. Other Grants of Administration sides outside BC, probate or administration with will annexed may be granted to that per- The documents and procedures are similar for all son’s attorney acting under a power of attor- forms of administration, except for small estates. ney, limited to the deceased’s estate located in Additional affidavits might be required, depending British Columbia (WESA, s. 139). on the situation. SCCR 22-3(1) allows prescribed forms to be varied as the circumstances require. (f) Administration de Bonis Non (a) Small Estate (WESA, Division 2 of Part 6) When an administrator dies leaving part of the estate unadministered, a grant in respect of the This part of WESA has not been proclaimed unadministered estate will be issued to a new yet. If it is, it would apply to estates having a personal representative to enable the admin- value to be set by Regulation (anticipated to istration to be completed. The new grant is be up to $50,000). An executor or administra- called administration de bonis non. tor would file a “small estate declaration” in a prescribed form. No security need be posted 5. Security for Grant of Administration and the personal representative need not provide formal accounts. Under s. 128 of WESA, an administrator is not required to provide security for acting as administra- (b) Administration With Will Annexed tor, unless there is a mentally incapable beneficiary When a person dies with a will but there is no without a nominee (i.e. a court-appointed commit- executor willing and able to act, someone tee, an attorney or a representative for financial and must apply for a grant of administration with legal affairs) or a minor beneficiary, or if the court, will annexed. The procedure in this situation on application by a person interested in the estate, is similar to an application for a grant of pro- requires it. If security is required, the applicant bate as the standard forms (P1, P2, P3, P9 must apply to court. The court may define the re- etc.) have boxes to tick where the application quired security or restrict the administrator’s pow- is for administration with will annexed. Sec- ers (WESA, s. 128(1.1)). tion 131 of WESA establishes the priority of A trust company or credit union may not be re- who may be appointed the administrator with quired to post a bond for the administration of an will annexed as follows: first, a beneficiary estate (Financial Institutions Act, R.S.B.C. 1996, who has the consent of the beneficiaries hav- c. 141, s. 73(4)). ing a majority interest in the estate; second, a beneficiary that does not have the consent of If the court orders that the applicant post a bond as the beneficiaries with a majority interest in the security, liability under the bond continues until the estate; third, any other person, including the administrator has fully accounted to the beneficiar- Public Guardian and Trustee, with consent. ies and the bond has been cancelled. (c) Administration Ad Colligenda Bona Before the grant of administration is issued, the bond must be prepared, executed by the administra- If there is a delay in the appointment of an tor and sureties, if any, and filed with the registry, administrator and it is necessary to appoint together with the affidavit of any sureties if they are someone to collect the assets and protect the individuals. The bond is filed by way of requisition. estate, the court may appoint an administrator ad colligenda bona and give the administrator When bonding companies are involved, the bond whatever powers the court deems necessary. premiums are charged against the estate and are usually payable annually. There may be a fee. (d) Administration Pendente Lite When the administration of the estate is complete, When an action touching the validity of a will an application must be made to deliver the bond for or for obtaining, recalling, or revoking a pro- cancellation. bate or grant of administration is pending or has been commenced, the court may appoint If a notice of application for a grant was delivered an administrator pendente lite. The adminis- to the Public Guardian and Trustee, the court must trator pendente lite has all of the rights and not issue a grant until the written comments of the powers of a general administrator other than Public Guardian and Trustee are provided, unless the court otherwise orders (WESA, s. 124).

Wills

87 wording of a will to accord with what it determines to Chapter 11 have in fact been the will-maker’s intention. In the exercise of its construction jurisdiction, the court interprets or construes the contents of the testamentary documents that have been approved by the court in the exercise of its probate jurisdiction. The court of con- Other Applications in the Course struction can only interpret the words that validly consti- of Administration1 tute the will, as determined by the court of probate. Therefore, if there was a problem with a will, such as the mistaken inclusion of certain language, it was wise to bring an application for rectification to clarify the [§11.01] Introduction issue before proceeding to probate. Otherwise, the relief available would be restricted to the more limited juris- This chapter is a general review of applications other diction of a court of construction to interpret the word- than the conventional proceedings for grants of probate ing contained in the will. However, WESA s. 59 specifi- or letters of administration. cally allows an application for rectification to be made by a court of probate or a court of construction within This chapter uses the terminology and procedure man- 180 days of a grant of probate being issued. dated by the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the “SCCR”). [§11.03] Probate Jurisdiction: Rectification of Refer specifically to the Supreme Court Civil Rules, Will Part 25 (Estates) and Rule 8-1 (Applications and setting down for hearing). Refer to Chapter 9 of the British Co- 1. Addition of Words lumbia Probate and Estate Administration Practice Manual (Vancouver: CLEBC) for further information on The traditional jurisdiction of the court to rectify at this topic. the time of a grant of probate did not extend to adding words. The wording of WESA s. 59 is broad These applications are generally not available for the enough to allow the court to rectify the will by add- will of an Indigenous person, unless the federal governing as well as deleting words (s. 59(1)). ment consents under s. 44 of the Indian Act, R.S.C. 1985, c. I-5 to transfer the matter to the provincial supe- 2. Application of WESA s. 59 rior court. Remember, however, if transferred to provincial jurisdiction, there may be consequences such as A person may apply to the court for rectification of payment of probate fees or enforcing orders relating to a will under s. 59 of WESA if the will fails to give land on reserve. For more information, see the British effect to the will-maker’s intention because of: Columbia Probate and Estate Practice Manual (Van- (a) an error arising from an accidental slip or couver: CLEBC), Chapter 21. omission; (b) a misunderstanding of the will-maker’s [§11.02] Rectification and Construction of instructions; or Wills (c) a failure to carry out the will-maker’s Traditionally, the Supreme Court of British Columbia instructions (s. 59(1)). sat as either a court of probate or a court of construction. The section expands the relief beyond the situation Once probate of a will has been granted, the court has that would apply if the will-maker read the will, or jurisdiction to interpret the will. if its contents were brought to the will-maker’s at- In its exercise of the probate jurisdiction, the court tention. In that case, there was a presumption that certifies that the will is valid and that the personal the will-maker knew and approved of the language representative named in the grant is entitled to in the will. administer the estate. The court also traditionally had a limited power, confined to deleting words, to rectify the 3. Procedure If there is an existing probate proceeding, the application is brought by notice of application in 1 Updated by Hugh S. McLellan of McLellan Herbert in Febru- ary 2021, September 2019 and August 2017. Previously revised Form P42. If there is no existing probate by PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jenkins proceeding, the application is brought by (2005 and 2006); and John F. Coupar (1995–2002). Reviewed requisition in Form P43 (SCCR 25-14(2)(d) and (e) in January 2002 by Roger D. Lee for content relating to the In- or (f)). dian Act.

Wills 88 Section 59 of WESA provides that the rectification description in the will may be taken to apply to application must be made prior to the grant of both. probate being issued or within 180 days of the grant If, however, there is some doubt as to whether all of probate being issued, unless the court extends conceivable potential beneficiaries have been iden- that date. Therefore a personal representative tified, some of the beneficiaries are minors or men- would not want to distribute the estate for at least tally incompetent, or if it appears imprudent to rely 180 days after the grant is issued. In any event, on an indemnification by the parties to the ar- pursuant to WESA s. 155, distribution is not rangement, it may be necessary to obtain court ap- allowed for 210 days following the issuance of the proval of the arrangement. grant, without a court order or the consent of all named beneficiaries and all persons entitled to Section 40 of the Infants Act, R.S.B.C. 1996, make a wills variation claim. Even if all of the c. 223, provides for the making of an agreement by beneficiaries at the time consent to early the guardian of an infant subject to the approval of distribution, a rectification order might also change the Public Guardian and Trustee for amounts under the beneficiaries, so there may be a risk that all $10,000, and for court approval in other cases. beneficiaries have not consented. Since a With respect to mentally incompetent beneficiaries, rectification order could possibly be made after 180 unless there is a committee or attorney or a days following the grant of probate, s. 59 also representative appointed under a Representation provides that the personal representative is not Agreement covering financial and legal matters for liable if a distribution takes place after 180 days the incompetent beneficiary, no one has jurisdiction and before getting notice of an application to to bind the incompetent beneficiary to any rectify the will. When distribution has occurred in particular distribution and a court application will those circumstances, however, a person may still be required. recover any part of the estate from a beneficiary. The section also provides that extrinsic evidence 2. Ascertaining the Will-Maker’s Intent including that of the will-maker’s intentions is In construing a will, the court attempts to ascertain admissible. the will-maker’s intent when that intent is not clear on the face of the will or when, even though the [§11.04] Construction Jurisdiction: language appears to be clear, problems emerge at Interpreting a Will the time the facts are ascertained when preparing for distribution. 1. General Uncertainty may result from ambiguity or mistake. The terms “interpretation” and “construction” are It can arise from causes such as poor use of lan- used interchangeably. Both refer to the court’s in- guage, clerical errors, a misunderstanding of the terpretation or construction of the contents of a tes- will-maker’s instructions, a failure to carry out the tamentary document that the court has approved in will-maker’s instructions and a failure by the will- the exercise of its probate jurisdiction. maker to appreciate the effect of the words used. An application for construction is made in a sepa- The court, in its exercise of jurisdiction as a court rate proceeding after probate has been applied for of construction, can ignore words and has a limited and granted. power to add or substitute words. However, the court can only add or change words if, from reading It is not always necessary to bring on an application the will, it is satisfied that a mistake has been made for construction of a will in order to protect an ex- and it is clear what the words are that the will- ecutor who is making a distribution in uncertain maker omitted. circumstances. The executor may proceed with distribution when all those having interest or potential 3. Judicial Approaches interest: The case law shows that there are two general ap- (a) are ascertained; proaches to the construction of wills. The two ap- (b) are sui juris; proaches are: (c) consent to a particular distribution (which (a) The Literal Construction of Meaning (that may be reached by compromise or reflected is, the objective approach) in a deed of arrangement); and In this approach, determination of the will- (d) indemnify the executor for that distribution. maker’s intention is based on the words in the will itself. Extrinsic evidence of An example of a typical compromise is the division circumstances known to the will-maker at of a legacy between two charities when the

Wills 89 the time they made the will (that is, the personal representative has an interest in the “armchair” evidence) is only examined if estate (for example, if the personal representative is the words of the will have a latent ambiguity also a beneficiary), it may be necessary for the when the words are applied to the facts. personal representative to retain separate counsel. (b) The Circumstantial Construction of the Notice of the application must be served on all Language of the Will (that is, the subjective persons whose interests may be affected by the approach) order. Interested parties might include unascertained persons as well as those who have a In this approach, determination of the will- vested future or contingent interest in the subject maker’s intention is made by admitting the matter of the application, which might require “armchair” evidence at once, and interpret- serving intestate successors. It may also be ing the language of the will and its sentence necessary to serve the Public Guardian and Trustee structure in the light of that evidence. if minors or unborn beneficiaries are involved The strong trend of Canadian and BC courts is to (Infants Act, s. 49). favour the subjective approach (see Re Thiemer Es- tate, 2012 BCSC 629). [§11.05] Curing Deficiencies 4. Rules of Construction In an application for probate (see Chapter 10), the pro- WESA should be reviewed at the outset to deter- bate registrar will usually recognize instances of non- mine whether any statutory provisions dealing with compliance under WESA, and either require further evi- the construction of wills are determinative of the dence, as in the case of an unattested alteration, or reject matter such as ss. 41, 42, 44, 45, 46, 47 48, 50 and the application completely as, for example, when only 51. It should be kept in mind, however, that many one witness has signed the document. of these sections are subject to “a contrary intention If a purported will does not satisfy the formal require- appearing in the will,” and a court application may ments under WESA, s. 58 gives the court the discretion still be necessary. to “cure” the formal deficiencies. For example, if one There are also common law rules of construction witness initialled all pages but forgot to sign the last which may assist when interpreting a will. page of a document that would otherwise qualify as a will, the court could order it to be effective as the de- Some examples of common law rules of construc- ceased’s will. As well, other documents, such as election are as follows: tronic wills, may be held to be valid wills. (a) technical terms are given their technical The court must first determine that a “record, document meanings in the absence of contrary or writing or marking on a will or document” represents intention; the testamentary intentions of the deceased (s. 58(2)). A (b) if possible, the court will avoid construing a “record” includes data that is recorded or stored elec- will in such a way that it creates an tronically, can be read by a person, and is capable of intestacy; and reproduction in visible form (s. 58(1)). The key issue to determine is whether the record, document, etc. records (c) when particular words are followed by gen- a deliberate or fixed and final intention as to the disposal eral words, the latter may be restricted in of the deceased’s property on death. If the record, doc- meaning by the former (the ejusdem generis ument, etc. represents the deceased’s testamentary inten- rule). tions, even if it does not satisfy the formal requirements of WESA, the court may, as the circumstances require, 5. Procedure order that it take effect as though it had been made as An application for construction is brought by the deceased’s will or part of it, a revocation, alteration, petition or requisition (SCCR 2-1(2)(c)). Under or revival of the will, or as the deceased’s testamentary SCCR 22-1, the matter is heard in chambers. intention (WESA, s. 58(3)). Although the circumstances the court will consider will be unique in each case, they The personal representative usually brings the could include presence of the deceased’s signature, application, but a beneficially interested party other handwriting of the deceased, witness signatures, revoca- than the personal representative can bring on an tion of previous wills, funeral arrangements, specific application for construction if the personal bequests, and the title of the document. (See George v. representative is asked to do so but refuses. Daily, [1997] M.J. No. 51 (Man. C.A.); Estate of Young, In the course of this procedure, the personal 2015 BCSC 182; Re Beck Estate, 2015 BCSC 676; Lane representative’s function is normally limited to Estate, 2015 BCSC 2162; and Re Hadley Estate, 2017 ensuring that matters are properly placed before the BCCA 311.) court, including all relevant evidence. However, if

Wills 90 The court may also use s. 58 to reinstate words in a will including costs incurred in s. 86 proceedings. However, that have been made illegible, if the alteration was not when common sense and business prudence should have made in compliance with WESA and there is evidence to dictated the proper course of action, the personal repre- establish what the original words were (s. 58(4)). sentative may be denied their own costs and penalized with the costs of the other parties to the proceeding. An application under WESA s. 58 is made in accordance with SCCR 25-14(2)(c). If there is an existing probate proceeding, the application is brought using a notice of [§11.07] Dispute Resolution application in probate form P42. If there is no existing probate proceeding, the order may be sought by requisi- 1. Disputes Among Executors and Trustees tion in probate form P43. Disputes may arise among executors during the Section 58 cannot be used to uphold a will that is invalid administration of an estate, or among trustees sub- for substantive reasons such as lack of testamentary ca- sequently in the execution of the trusts of the will. pacity or undue influence. Since, in most cases, executors must act unanimously unless the will otherwise provides, a meth- [§11.06] Application for Advice and od of resolving such disputes is necessary. One Directions method is to have a well-drawn “majority rule” clause in the will, which may exonerate a dissent- An application may be brought under s. 86 of the Trus- ing trustee. tee Act, R.S.B.C. 1996, c. 464, for the “opinion, advice The court has jurisdiction to intervene in the exer- or direction of the court on a question respecting the cise by trustees of their discretion if: management or administration of the trust property or the assets of a will-maker or intestate.” A trustee, execu- (a) such discretion is exercised in bad faith; tor, or administrator is, by s. 87 of the Trustee Act, (b) there is a failure to consider exercising such deemed to have discharged their duty by acting on the discretion; or advice given by the court. WESA s. 143 expressly states that s. 86 of the Trustee Act applies to a personal repre- (c) there is a deadlock between the trustees as sentative. to the exercise of their discretion. The scope of s. 86 is not as broad as it appears to be. However, the court should only intervene when Many applications brought under this section ought failure to do so would be “manifestly prejudicial” more correctly to be brought under a different head, par- to the interest of the beneficiaries (Re Blow (1977), ticularly those that require interpretation of the will. 2 E.T.R. 209 (Ont. H.C.)). Applications under s. 86 have been found to be appro- The court will not substitute its discretion for that priate in the following circumstances: of trustees who are acting unanimously and properly under their powers. It may step in to compel exe- (a) when guidance was needed as to the proper cution of the trusts of the will in the case of a dead- disposition of interest on a reserve of income lock between trustees. that was being held toward the executor’s compensation; The court will not intervene when the trustees are in agreement to sell an estate asset but are not in (b) when direction was needed on whether to exer- agreement as to the price because price is a less im- cise a statutory power to compromise an action; portant matter than the decision whether to sell (Re and Wright (1976), 14 O.R. (2d) 698 (H.C.)). (c) in construing the extent of a discretion or power given to trustees. 2. Removing an Executor or Trustee If there is a dispute between the parties, a need for ex- Misconduct on the part of a trustee is not a neces- tensive evidence, or a blatant desire to shirk a discre- sary prerequisite to the court removing a trustee tionary decision, a s. 86 application is probably inappro- “when the continued administration of the trust priate, although where the effect of a decision is signifi- with due regard for the interests of [the beneficiar- cant, the court might provide directions (Re Toigo Es- ies] has by virtue of the situation arising between tate, 2018 BCSC 936). the trustees become impossible or improbable” (Re Consiglio Trusts (No. 1), [1973] 3 O.R. 326 at 328 The application is usually brought by petition under (C.A.)). s. 86 of the Trustee Act. The BC Supreme Court removed one trustee in In general, the personal representative has a right of full Watson v. Strong, 2012 BCSC 1274 where the dis- indemnity for all costs the personal representative sention and friction between the trustee and a properly incurred in the due administration of the trust,

Wills 91 beneficiary was hampering the proper administra- personal representative who has priority over oth- tion of the estate. ers, prior to a representation grant being issued to the executor or personal representative. The overriding principle is that a trustee must act honestly and exercise care in managing the trust in accordance with the terms of the trust, as a prudent [§11.08] Other Applications businessperson would. The courts have consistently held that the trustee’s exercise of the discretion 1. Giving Trustees New Powers must be proper and that a trustee must actually con- A trustee has only the powers given by law and by sider the situation and make a decision in order to the terms of the will, and the courts have only a truly exercise the discretion. very limited inherent jurisdiction to enlarge these The court will grant an application for removal of a powers. This inherent jurisdiction has been sup- personal representative if the personal representa- plemented by the Trustee Act and the Trust and Set- tive’s duties are in conflict with their personal in- tlement Variation Act, R.S.B.C. 1996, c. 463. terests, estate assets have been endangered by the (a) Inherent Jurisdiction personal representative’s conduct, or the personal representative has benefitted at the expense of the The court will exercise its inherent jurisdic- estate. tion in limited circumstances. It will not re- write the trust, but will support the will- The court will remove a trustee for a breach of trust maker’s basic purpose when it has been in failing to maintain an even hand between the life overtaken by an unforeseen event that tenant and the remaindermen. would otherwise severely prejudice the ben- In Watson v. Strong, 2014 BCSC 754, another eficiaries. decision involving parties who sought removal of (b) Trustee Act trustee, the Court cited principles from The Estate of Sally Toby Mintz, 2007 BCSC 1922 and Conroy Under the Trustee Act, the court has the v. Stokes, 1952 CanLII 227 (B.C.C.A.) in power to approve the following specific determining that the court will remove a trustee if applications: there is evidence the trustee has endangered trust (i) Repairs property or shown “a want of honesty or of proper capacity to execute the duties, or a want of Under s. 11 of the Trustee Act, a trustee reasonable fidelity.” may apply to expend money for the purpose of “repair or improvement of the Mere disagreement between the trustee and benefi- land, or for the erection on the land of a ciaries will not usually result in the removal of a building” (or addition or improvement). trustee; see Conroy v. Stokes, 1952 CanLII 227 The court must be satisfied that the re- (B.C.C.A.). Other bases on which the courts have pairs or improvements are necessary or removed personal representatives include bankrupt- expedient to prevent deterioration of the cy, conviction of a felony, taking up permanent res- value of the land or to increase its pro- idence outside the jurisdiction, incapacity, and ductive power. breach of trust in the personal representative’s own favour. (ii) Investments The court’s jurisdiction to remove a trustee is based Sections 15.1 to 15.6 of the Trustee Act on s. 30 of the Trustee Act and its inherent jurisdic- give trustees unlimited powers of in- tion. The court’s jurisdiction to remove a personal vestment as long as the investment is in representative is based on s. 158 of WESA, which a form of property or security in which a sets out a number of specific, but non-exhaustive, prudent investor might invest (the “pru- grounds for removal of a personal representative. If dent investor” rule). A will-maker can the person sought to be removed is both a personal restrict or limit the trustee’s powers to representative and a trustee, applications must be deal with funds held in trust, and may made under both WESA and the Trustee Act. An specify in a will the type of investments application to remove a trustee would be made un- the trustee may make for the estate, and der SCCR 16-1, but SCCR 25-14(1)(d) governs the prohibit the trustee from making others. application procedure within the existing probate (iii) Sale of an infant’s property proceeding for removing a personal representative. When the income from the property Similar considerations apply if a person having an held for an infant is insufficient for the interest in an estate applies under WESA s. 158 and infant’s maintenance and education, a SCCR 25-14(1)(f) to pass over a named executor or trustee may apply under s. 25 of the

Wills 92 Trustee Act for an order authorizing the because a person who may be interested in the dis- sale of any portion of the property so tribution cannot be located. that the trustee may apply the proceeds of sale for or towards the maintenance [§11.09] General Supervisory Jurisdiction of and education of the infant. the Court (c) Trust and Settlement Variation Act Even the broadest privative clause, such as one empow- Under s. 1 of the Trust and Settlement Vari- ering the trustee to make binding decisions at the trus- ation Act, the court has jurisdiction to en- tee’s absolute discretion, cannot completely oust the large the powers of the trustee. The court jurisdiction of the court to monitor the performance of a considers whether the benefit to be obtained trust or the administration of an estate. In Mardesic v. is one “that a prudent adult motivated by in- Vukovich Estate, 1988 CanLII 3125 (B.C.S.C.) the BC telligent self-interest and sustained consid- Supreme Court held that it had jurisdiction to oust a eration of the expectancies and risks and the trustee both under the Trustee Act and the inherent ju- proposal made, would be likely to accept” risdiction of the court. The BC Court of Appeal agreed (Russ v. British Columbia (Public Trustee) in Miles v. Vince, 2014 BCCA 289. (1994), 89 B.C.L.R. (2d) 35 (C.A.)). If there are minor or mentally incapable beneficiar- Section 31 of the Trustee Act gives the BC Supreme ies, notice of the application must be pro- Court the express power to appoint new trustees in vided to the Public Guardian and Trustee. addition to or as substitution for others. The Court may approve the variation on behalf of the minor or incapable beneficiaries.

2. Cy-près If a trust for a charity or a gift to a charity discloses a general charitable intention, it will not fail for uncertainty or impossibility of performance, but the trust property or the gift will be applied for other charitable purposes cy-près, that is, as nearly as possible to the original purpose that cannot be carried out. By virtue of the Attorney General’s parens patriae jurisdiction over charities, the Attorney General is a necessary party to an application to court for a cy-près order in which the court is asked to choose a replacement charity.

3. Distribution Under Direction of Court Occasionally, a personal representative may not be able to determine if a beneficiary survived the deceased or if members of a class of beneficiaries survived the deceased. For example, if the intestate heirs of a deceased included all of her uncles and aunts, records to prove the date of death of all of the members of this class may not be available. Section 39 of the Trustee Act allows the personal representative to apply by petition for an order that the personal representative is permitted to distribute the estate, taking into consideration only the claims that the personal representative has been able to ascertain; and that the personal representative is not liable for any claims that the personal representative had no notice of at the time of distribution. The court may order that notice be given to persons who have an interest in the distribution. However, often the reason the s. 39 application is required is

Wills 93 of the issue of a representation grant with Chapter 12 the consent of all of the following: (a) all beneficiaries who have an interest in the estate; Transmission and Transfer of (b) all persons who may commence a proceeding under Division 6 Assets1 [Variation of Wills] of Part 4 [Wills] in relation to the estate. (1.2) The personal representative of a de- [§12.01] Introduction ceased person who died without a will may distribute the estate of the deceased This chapter deals with the procedures and documents person within the 210 days following the required to transmit assets from the name of the de- date of the issue of a representation grant ceased into the name of the personal representative or, if with the consent of all intestate successors applicable, into the name of the surviving joint tenant, entitled to a share of the estate. [Emphasis and transfer (distribute) assets from the personal repre- added.] sentative to the beneficiaries or heirs. The personal representative may distribute the estate of the deceased person without the required [§12.02] Executor’s Year consents if the personal representative complies with s. 155(1.3) by setting aside the required An executor has traditionally been allowed one year amounts to compensate potential beneficiaries, in- from the will-maker’s death to gather in the assets and testate successors, or claimants. The personal rep- settle the affairs of the estate. This is commonly known resentative is liable for loss or damage arising from as the executor’s year, and an executor cannot be com- a distribution of the estate under s. 155(1.3), unless pelled to pay a legacy before the expiry of the one-year the personal representative has set aside the re- period. Further, except where specifically provided in a quired amounts. will, a legacy carries interest only after one year from The court will likely order any distribution made the will-maker’s death. The rate of interest on a legacy within the 210-day period and contrary to s. 155 be is 5% (Interest Act, R.S.C. 1985, c. I-15, s. 3) unless repaid by the executor or that other security be otherwise provided in a will. posted by the executor: see Stevens v. Wood Estate, 2013 BCSC 2380. [§12.03] Legislation Affecting Transfer of 2. Wills Variation Under WESA Assets Under s. 60 of Division 6 of Part 4 of WESA, a 1. Delay of Distribution Under WESA spouse or child may commence a proceeding to vary a will that does not adequately provide for the Section 155 of WESA provides (in part): spouse or child’s proper maintenance and support 155 (1) Subject to this section, the personal (see Chapter 19). The proceeding must be brought representative of a deceased person must within 180 days from the date of the issue of pro- not distribute the estate of the deceased bate of the will, otherwise the court has no authori- person within the 210 days following the ty to hear the action (WESA, s. 61(1)). date of the issue of a representation grant Similarly, a copy of the initiating pleading must be except by order of the court. served on the personal representative within (1.1) The personal representative of a de- 30 days of the expiry of the 180-day period (WESA, ceased person who died with a will may s. 61(1)(b)). The court may extend the time for ser- distribute the estate of the deceased per- vice in appropriate circumstances (Rodgers v Rodg- son within the 210 days following the date ers Estate, 2017 BCSC 518). If a wills variation proceeding is commenced, a distribution may only occur with the consent of the 1 Updated by Hugh S. McLellan of McLellan Herbert in Febru- court (WESA, s. 155(2)). If real property is trans- ary 2021, September 2019 and August 2017. Previously updated ferred to a beneficiary within the 210-day period, by PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jenkins title to the property cannot be registered in the Land (2005 and 2006); Noreen Brox (1997–2001); Marie-Louise Fast Title Office without either the approval of the court (1996); and Owen Dolan, QC, and Noreen Brox (1995). Re- or consents of the beneficiaries entitled to consent. viewed in January 2002 by Roger D. Lee for content relating to the Indian Act.

Wills 94 The registration is subject to the liability of being date of death. A final tax clearance certificate may charged by an order under Division 6 (s. 69(2)). be obtained on final distribution. It can take many months to obtain a tax clearance certificate from At the end of the 210-day period, if the personal the Canada Revenue Agency. The lawyer should representative does not know whether or not a wills also advise the executor client about these risks and variation proceeding has been commenced, it is about the protection afforded by the beneficiaries good practice to conduct a search of court registries providing an indemnity to the executor at the time in the province because the court may extend the of the interim distribution. period for service without the knowledge of the personal representative. The search may not be jus- 4. Intestacies tified depending on the size of the estate if other inquiries can be made. Also, land title searches can (a) Delay in Distribution be made to ascertain the existence of a certificate of The same provision regarding the period of pending litigation, but the filing of a certificate of time before an estate can be distributed applies pending litigation against estate real property in where there is a grant of administration with no such a proceeding is optional (WESA, s. 61(5)). The will. Section 155 of WESA requires that the lawyer should explain the matter to the client and personal representative must not distribute the seek instructions. estate until after 210 days following the date of In all cases, the solicitor for the personal repre- issue of the grant, subject to the exceptions in sentative should advise a person entitled to apply s. 155. for a wills variation to seek independent legal ad- (b) Advances to Children vice before signing a waiver or consent to distribution within the 210-day period. The concept of “hotchpot” is based on the legal presumption that a will-maker who leaves a gift The 210-day bar against the transfer of real proper- to a child in the will, and then after the making ty contained in WESA applies only to a transfer to a of the will gives the child a sum of money, beneficiary, not to a sale by the personal repre- does not intend to give the child’s portion to sentative, although the filing of a certificate of them twice. This presumption is rebuttable. pending litigation by a wills variation claimant may Wills may contain a “hotchpot” clause either preclude a sale. The sale proceeds remain, however, making the presumption expressly applicable subject to the 210-day restriction on distribution to or expressly negating the presumption. the beneficiaries (WESA, s. 155). The Estate Administration Act used to provide See Chapter 19 for more on the variation of wills. a hotchpot provision for intestate estates, but 3. Income Tax Act this was not carried over in WESA. If a personal representative transfers estate assets (c) Common Law Spouses and Multiple Spouses before having received a certificate from the Cana- Section 2 of WESA provides that two persons da Revenue Agency certifying that all taxes, inter- are spouses of each other if (a) they were mar- est, or penalties that have been assessed under the ried to each other, or (b) they had lived with Act and are chargeable against the assets of the es- each other in a marriage-like relationship for at tate have been paid (a “clearance certificate”), the least two years. personal representative is personally liable for the unpaid taxes, interest, and penalties (Income Tax If the deceased was survived by a spouse and Act, R.S.C. 1985, c. 1 (5th Supp.), ss. 159(2) and the estate includes a spousal home, the surviv- (3)). ing spouse has rights with respect to the spousal home under Part 3, Division 2 of WESA. The To avoid personal liability, the personal representa- personal representative must not dispose of the tive should either postpone distribution until after spousal home within the 180 days after the date receiving the clearance certificate, or reserve from the grant is issued, unless the personal repre- the distribution sufficient estate assets to cover the sentative has the spouse’s written consent. charges. In the latter case, the lawyer should advise There is an exception to this rule when the es- the personal representative to obtain advice and tate does not have sufficient assets to pay its written confirmation from the personal representa- debts without selling the home (WESA, s. 28). tive’s tax adviser as to the amount of the reserve required to cover unpaid taxes, interest, and penal- If two or more persons are entitled as a spouse, ties. It may be advisable for the personal repre- they split the spousal share in an intestate es- sentative to postpone interim distribution and cal- tate in the proportions they agree upon, or fail- culation of the reserve amount until the representa- ing agreement, as determined by the court tive has received a tax clearance certificate to the (WESA, s. 22(1)).

Wills 95 [§12.04] Transmission and Transfer Procedures Land Owner Transparency Act, S.B.C. c. 23, requires the disclosure of the names, addresses and 1. General Social Insurance Numbers of all beneficiaries named in a will when real property is transmitted to The legislation, procedures, and documents re- an executor. quired to transmit various assets of the deceased to the surviving joint tenant, the personal representa- If the deceased was an Indigenous person who had tive and the beneficiaries (if any) of the estate are real property located on reserve, there is a com- described in the British Columbia Probate and Es- pletely different process to follow, as set out in the tate Administration Practice Manual (Vancouver: Indian Act, R.S.C. 1985, c. I-5 (see British Colum- CLEBC). bia Probate and Estate Administration Practice Manual (Vancouver: CLEBC)). Generally, subject to the statutory restrictions noted above, when the grant is issued, the process of The Property Transfer Tax Act, R.S.B.C. 1996, transmission and transfer can begin, although trans- c. 378 imposes a tax on all land transfers unless the fer to beneficiaries may be delayed until the per- transfer comes within one of the exemptions listed sonal representative has obtained a clearance certif- in s. 14. Among the exemptions are: icate from the Canada Revenue Agency, obtained (a) a transfer by operation of law to the surviv- approval of the personal representative’s accounts ing joint tenant (s. 14(3)(m)); and published notices to creditors (see §13.06). (b) a transfer to a person in that person’s capac- When preparing the documents for transmission ity as personal representative, if the land and transfer, if there is any doubt as to the require- transferred is part of the deceased’s estate ments, contact the appropriate agency, corporation, (s. 14(3)(q)); and or office (for example, a transfer agent for stocks or bonds, the Land Title Office, banks, etc.). (c) a transfer from a trustee of a deceased’s estate to a beneficiary who is a “related indi- Transmission or transfer of assets frequently re- vidual” (that is, related to the deceased) if quires filing of copies of court documents. If copies the land transferred is a family farm, a prin- have not been obtained at the time of application cipal residence, or a qualifying recreational for the grant, the procedure for obtaining them is as residence (s. (14)(3)(c)). follows: “Related individual,” “parent,” “spouse,” “child,” (a) To obtain a court-certified copy of the grant, “family farm,” “principal residence,” and “recrea- submit a request to the registry (the registry tional residence” are all defined terms (ss. 1(1), prefers to make its own photocopies). The fee 14(1)). Only one recreational residence may be is $40 for the first ten pages and $6 for each claimed for exemption purposes in respect of the page thereafter. deceased’s estate (s. 14(5)). (b) To obtain a court-certified copy of the real The surviving joint tenant, not the deceased’s per- property portion of the Statement of Assets, Li- sonal representative, must arrange for transmission abilities and Distribution (the “disclosure doc- of their interest and bear the legal fees and costs of ument”), submit a request to the registry. The transmission. fee is $40 for the first ten pages and $6 for each page thereafter. 3. Personal Property For tables summarizing the necessary documents, (a) Safety Deposit Box see the British Columbia Probate and Estate Ad- After the contents of a safety deposit box have ministration Practice Manual (Vancouver: been listed, the safety deposit box lease can be CLEBC). transferred. It is the lease, not the contents, that is transferred. A transfer to the surviving joint 2. Real Property tenant of the safety deposit box is effected by Sections 260 to 270 of the Land Title Act, R.S.B.C. providing the financial institution with the orig- 1996, c. 250 govern the transmission and transfer of inal or a notarially certified copy of the death interests in real property. There are other sections certificate. (Note that some banks may not al- of the Land Title Act, as well as sections in the low a surviving joint tenant to close out a safe- Strata Property Act, R.S.B.C. 1996, c. 43, the Trus- ty deposit box without producing a grant in re- tee Act, R.S.B.C. 1996, c. 464 and Division 10 of spect of the deceased joint tenant). A transfer Part 6 of WESA that are relevant to interests in land. to the personal representative is effected by The practice authorized in the Land Title Office for providing a notarially certified copy of the estate matters is set out in the Land Title Practice grant, with appropriate instructions. Manual (Vancouver: CLEBC). As of 2020, the

Wills 96 (b) Accounts With Financial Institutions for Canada Savings Bonds and other bonds issued by the Bank of Canada are somewhat dif- To transmit a joint account to the surviving ferent than for other bonds. As a safety precau- joint tenant, the financial institution will re- tion against losing the certificates, it is advisa- quire the original or a notarially certified copy ble to use separate bond powers of attorney to of the death certificate. endorse the debenture or bond certificates, ra- To transmit an account to the personal repre- ther than having the client take the certificates sentative, the financial institution will require a to the financial institution for signature and notarially or court-certified copy of the grant (it guarantee. Transfer documents are not required may also require a signature card and new ac- for bearer bonds and debentures (which are count agreements). Once the account is in the transferred by delivery) except perhaps a notar- name of the personal representative, if it is then ially certified copy of the grant for the account to be transferred to the beneficiary, a letter of (broker) identification and authority purposes. direction to the financial institution should suf- fice. (f) Shares (c) Insurance, RRSPs and RRIFs Documents required for the transmission of shares are set out in the British Columbia Pro- If there is an insurance declaration or bate and Estate Administration Practice Man- RRSP/RRIF beneficiary designation in the will, ual (Vancouver: CLEBC). Sections 115 to 119 the insurance company or plan administrator of the Business Corporations Act, S.B.C. 2002, should be notified and provided with a notarial- c. 57, and section 51(7) of the Canada Business ly certified copy of the will. In some cases, the Corporations Act, R.S.C. 1985, c. C-44, set out insurance company or plan administrator may the requirements for share transfers. Note that require a notarially certified copy of the grant companies whose shares are not traded on a to validate the will. Since a designation of a recognized stock exchange may, by their arti- beneficiary under a RRSP or RRIF can only be cles, restrict the transfer of shares. A share- made in accordance with the terms of the plan holders’ agreement may also restrict the (Part 5 of WESA), it will be necessary to con- transfer of shares. The lawyer should check firm that the plan permits designation of a ben- with a non-trading company as to the require- eficiary by will. It should also be confirmed ments for transfer and whether there are any re- that the deceased did not file a change of bene- strictions on transfer. Again, as a safety precau- ficiaries with the insurer or plan administrator tion against losing the certificates, it is advisa- after signing the will. ble to use a separate stock power of attorney to If there is no declaration or beneficiary endorse the share certificates rather than take designation in the will, the lawyer should the certificates for endorsement and guarantee. contact the insurance company or plan Transfer documents are not required for shares administrator to see what documents are in street form. required. If there is a named beneficiary, the lawyer must get instructions from that person (g) Motor Vehicles in order for that person to obtain payment. If Transfers of motor vehicles are governed by the estate is the beneficiary, a notarially or Motor Vehicle Act, R.S.B.C. 1996, c. 318, court-certified copy of the grant will be ss. 17 and 18; Insurance (Vehicle) Act, required. R.S.B.C. 1996, c. 231; and Social Service Tax (d) Pensions Act, R.S.B.C. 1996, c. 431. The comments regarding RRSPs and RRIFs (h) Furniture and Personal Possessions apply to pensions except that where a designation has been made in a pension plan pursuant Transfer documents are not normally required to the terms of that plan, the designation cannot to transfer furniture and personal possessions, be affected in any way by a will executed after but the personal representative may require a making the designation (Part 5 of WESA). receipt. (e) Bonds and Debentures (i) Debts Due to the Deceased Documents required for the transmission and Bills of exchange (including promissory notes) transfer of bonds and debentures are set out in should be endorsed, without recourse, in favour the British Columbia Probate and Estate of the transferee. For any debt other than a bill Administration Practice Manual (Vancouver: of exchange or a mortgage of real property, the CLEBC). Note that the transfer requirements personal representative should execute an

Wills 97 assignment and send notice to the debtor (Law and Equity Act, R.S.B.C. 1996, c. 253, s. 36). (j) Other Property Chapter 10 of the British Columbia Probate and Estate Administration Practice Manual (Vancouver: CLEBC) outlines procedures for the transmission of various assets including mining claims, annuities, mobile homes, ves- sels, aircrafts, and assets in foreign jurisdictions. (k) Nisga’a Cultural Property If cultural property of a Nisga’a citizen is in issue, there may be a dispute as to whether it can pass by the will (see Division 3 of Part 2 of WESA).

Wills

98 representative to deal with on behalf of Chapter 13 the estate. The creditor who brings an action against the personal representative pleads as the cause of action the liability contracted by 1 the deceased before death, in the same Creditors manner as if the deceased were still alive, but names as defendant the personal representative (SCCR 20-3(10)). Judgment on such a claim establishes the status of [§13.01] Introduction the claimant as a creditor of the deceased. The assets of the estate are liable for pay- This chapter introduces the lawyer to advising the per- ment. The judgment is not a personal lia- sonal representative with respect to creditors’ claims. bility of the personal representative, unless the personal representative made a For further discussion of this topic, see Chapter 11 of representation that the estate had suffi- the British Columbia Probate and Estate Administration cient funds to pay the debt but this repre- Practice Manual (Vancouver: CLEBC). sentation turned out to be inaccurate.

[§13.02] General (ii) Liabilities incurred in respect of death The personal representative likely will pay 1. General Duties of the Representative Relating the reasonable costs of funerary and in- to Creditors’ Claims terment expenses for the deceased. The personal representative is entitled to be The personal representative has the following gen- indemnified out of the assets of the estate eral duties: for these expenses. (a) to ascertain the liabilities of the estate and to (iii) Liabilities incurred in administering the retain sufficient assets to pay those liabili- estate ties before distributing the balance of the estate among the beneficiaries; The personal representative likely will incur liabilities while administering the es- (b) to perform all contracts made by the de- tate. The personal representative is enti- ceased and enforceable against the de- tled to be indemnified out of the assets of ceased’s estate; and the estate for proper testamentary or ad- (c) to pay the liabilities with due diligence as is ministration expenses. appropriate to the assets and, so far as the (b) Claims Based on Improper Performance of beneficiaries are concerned, in accordance Duties with the terms of the will. A creditor may bring an action against the per- 2. Types of Creditors’ Claims sonal representative for the improper performance of the personal representative’s duties. (a) Liabilities (i) Breach of trust As in any civil case, creditors in an estate administration case may be classified as secured, If the personal representative is obligated preferred, or unsecured. Claims may arise in under the terms of a trust, express or im- three ways. plied, to pay a liability, but fails to make the payment, the personal representative is (i) Liabilities incurred by the deceased personally liable to the creditor for breach Liabilities that were incurred by the de- of trust. For example, if a will directs the ceased and were enforceable against the executor to pay a specific debt or to pay deceased immediately prior to death just debts, funeral expenses, and burial become the responsibility of the personal expenses, and the executor fails to do so, this is a breach of trust. 1 Reviewed by Hugh S. McLellan of McLellan Herbert in Febru- ary 2021. Previously updated by Hugh S. McLellan (2017 and 2019); PLTC (2016); Hugh S. McLellan (2014); Kirsten H. Jen- kins (2005 and 2006); and Linda J. Yardley (1997–2002). Re- viewed in January 2002, by Roger D. Lee for content relating to the Indian Act).

Wills 99 (ii) Devastavit (Mismanagement) (c) a claim against the deceased that was threat- ened or contemplated but not admitted by If the personal representative fails to ad- the deceased or the personal representative. minister the estate with due diligence, then the personal representative is person- Examples of continuing liabilities include the ally liable to creditors or beneficiaries following: who sustain a loss as a result. (a) liability under a separation agreement or court order to pay spousal or child support; 3. Defences to Creditors’ Claims (b) a lease under which the deceased is a lessee The personal representative is entitled to deny the in occupation; liabilities on any ground the deceased could have used if the deceased was still alive. (c) liability of the deceased on a mortgage (depending on the terms of the mortgage); and The personal representative can also plead as a complete or partial defence that, even if the date-of- (d) guarantees (at common law, death of a sure- death creditor’s claim is held to be valid, the ty does not of itself terminate the surety’s deceased had no (or insufficient) assets at the date liability under a continuing guarantee for of death, or that the personal representative has advances made afterwards by the creditor to duly administered the estate and no longer has any the principal debtor. The creditor must have (or sufficient) assets. This plea is known as plene notice, actual or constructive, of death in administravit (if there are no assets) or plene order for the estate to avoid liability for administravit praeter (if there are insufficient such advances. The terms of the contract of assets). guarantee may vary the common law rule. The personal representative should therefore In addition, s. 96 of the Trustee Act, R.S.B.C. 1996, examine the terms of any guarantees to de- c. 464 empowers the court to relieve the personal termine whether there is a legal right to ter- representative from personal liability arising out of minate liability for future advances. Failure breach of trust or devastavit. The court must con- to do so will amount to devastavit). clude that the trustee acted honestly and reasonably and ought fairly to be excused for the breach and 2. Unenforceable or Statute-Barred for failing to obtain directions from the court. The leading Canadian case is Fales v. Canada Perma- A claim that is unenforceable (e.g. a guarantee not nent Trust Company, [1977] 2 S.C.R. 302 at 319, in writing or an illegal contract) or barred by the 1976 CanLII 14 (S.C.C.), where the following ques- statute of limitations should not be admitted or paid tions were considered relevant: by the personal representative. (a) Was the personal representative paid for In some cases, the limitation period may not end for their services? years after the deceased’s death, which could delay the administration of the estate. A personal repre- (b) Was the personal representative a one-time sentative can initiate a 180-day limitation period for volunteer or a professional estate a disputed claim by serving notice on a creditor un- administrator? der s. 146 of WESA. (c) Was the breach of duty merely technical or was it a minor error in judgment? 3. Family Creditors Often, a relative or household member who pro- [§13.03] Liabilities of the Deceased vides domestic services to the deceased will assert a claim under a contract with the deceased. That 1. Contingent or Continuing creditor must prove that a contract existed. For example, the creditor may have to satisfy the court The personal representative must provide for all li- that the claim is an honest one and rebut the pre- abilities, including those that are contingent and sumption that service was rendered out of affection continuing, before distributing the estate. Examples or familial duty rather than in consideration of a of contingent liabilities include the following: contractual promise. A relative or household mem- (a) a personal guarantee made by the deceased ber who is unable to establish an enforceable con- that is outstanding at the time of death; tract may still be able to recover on the basis of an implied contract, quantum meruit or unjust (b) a pending lawsuit against the deceased in enrichment. which the deceased had disputed liability; and

Wills 100 4. Pledges contrary being shown. If the legacy is less than the debt, the presumption does not apply and An outstanding commitment by the deceased to there is no partial satisfaction. For the pre- make a gift or donation is unenforceable and must sumption to apply, the debt must exist when the be dishonoured by the personal representative un- will is made. less it is under seal or supported by such consideration as to make the commitment a contract. For a Where this presumption applies, the personal case on enforceability of pledges see Brantford representative must pay the legacy but not the General Hospital Foundation v. Marquis Estate, debt. Where the presumption does not apply, [2004] O.J. No. 1705 (C.A.), affirming (2003), 67 the personal representative must pay both the O.R. (3d) 432 (Sup. C.J.), where a charitable organ- debt and the legacy. ization unsuccessfully attempted to enforce pay- Subject to a contrary intention appearing in the ment of the balance of a one million dollar pledge will or otherwise, s. 53(3) of WESA abrogates that the deceased had made but had only paid the common law presumption that a debt owed partially. by the will-maker is satisfied by a legacy to the creditor equal to or greater than the debt, so 5. Spousal and Child Support that the legacy takes effect and the debt contin- If the deceased was, immediately prior to death, li- ues to be a claim against the estate. able for payments to an estranged spouse or child (b) Debtor a Beneficiary under a separation agreement or a court order, any arrears outstanding immediately prior to death will A bequest by a creditor to a debtor does not be a debt payable out of the estate. The personal give rise to a presumption that satisfaction was representative will also have to determine whether intended. However, if it appears that the will- the estate is liable for ongoing support in respect of maker intended satisfaction, the debtor is enti- the period following death. If so, the estranged tled to receive the gift and the debt obligation spouse or child will rank as an ordinary creditor of is extinguished. Such intention may be ex- the estate for the future installments, and the per- pressed in the will, implied in the will, or prov- sonal representative will be obliged to provide for en by evidence from other sources. that claim before distribution to beneficiaries. Fail- (c) Creditor an Executor ure to do so will render the personal representative personally liable to the claimant for devastavit. A personal representative who is also a creditor of the deceased is entitled to retain out of the The general rule was that liability to pay support is estate full payment of any debt that was owing a personal obligation that does not survive the to the personal representative by the deceased. death of the payor, so each case was determined by interpretation of the separation agreement or court However, if a defence exists against the credi- order. Pursuant to s. 171(1) of the Family Law Act tor/personal representative that would be valid S.B.C. 2011, c. 25, a deceased’s estate may be lia- as against a creditor at arm’s length, the per- ble for child or spousal support. The personal rep- sonal representative must reject their own resentative may also apply to suspend, terminate or claim. change a support order (s. 171(2)). If the original (d) Debtor an Executor support order or agreement was silent as to what happens after the payor dies, an application may be Appointment of a debtor as executor extin- made by a person receiving support to have the guishes the debt but leaves the executor liable support continue and be a debt of the estate to account as if the debt had been collected. (s. 171(3)). As there does not appear to be a limitation period for a person to seek this order, the per- [§13.04] Liabilities Relating to the Death: sonal representative ought to consider using the Funeral Expenses Notice in WESA s. 146 to take advantage of the 180-day statutory limitation period for claims The personal representative named in the will bears pri- against an estate (see §13.06(3)). mary responsibility and financial liability for the disposition of the remains (see §7.04(1)). There is no similar 6. Creditor or Debtor a Beneficiary or Executor provision for an administrator, but in reality, an adminis- (a) Creditor a Beneficiary trator would rarely be appointed before the time of the funeral. At common law, if a debtor bequeaths to a creditor a legacy equal to or greater than the In any event, the personal representative should decide debt, the legacy is presumed to have been in- which expenses are funeral expenses, then decide what tended to satisfy the debt, subject to the is a reasonable amount for each expense in the circum-

Wills 101 stances by, taking into account the size of the estate, the [§13.06] Administering the Liabilities deceased’s station in life, and similar factors. The person who instructs the funeral director is personally liable 1. Instructions and Retainer to pay all expenses incurred but is entitled to recover The initial meeting between the personal reasonable expenses from the estate. representative and lawyer usually includes a listing If contention is foreseeable, the personal representative of all of the deceased’s liabilities and the liabilities should be advised to seek approval, however informal, relating to death (see Chapters 7 and 8). The lawyer of the residuary beneficiaries (and perhaps senior should ask the personal representative to bring to creditors) or an indemnity from next of kin who are ea- that meeting as much information as is then ger to arrange a ceremony more costly than what might available. be considered reasonable. 2. Searches and Inquiries

[§13.05] Liabilities Incurred by the Personal It is important that the personal representative be Representative diligent in attempting to identify all of the deceased’s liabilities as well as keeping track of the personal representative’s own costs relating to the A personal representative likely will incur, and is enti- death and the administration of the estate. There are tled to incur, liabilities while administering the estate. various methods that the personal representative A personal representative is personally liable on con- and the lawyer should use. Each should share the tracts that the personal representative makes to carry out results of their inquiries with the other. the responsibilities of the position. For example, the per- (a) Lawyer’s Inquiries sonal representative is personally liable for the full amount of their lawyer’s proper account, even if the as- Inquiries made by the lawyer are best han- sets of the estate are insufficient to provide the personal dled by letter unless personal attendance is representative full indemnity. considered necessary or advisable. The personal representative is entitled to be indemnified (b) Searches out of the assets of the estate for proper testamentary or In certain circumstances it may be appropri- administration expenses. The indemnity takes priority ate to search registries of record for liabili- over all liabilities of the deceased except funeral ex- ties, such as the Personal Property Registry penses and in rem claims by secured creditors. (for car loans and evidence of a company’s In anticipation of the indemnity, the personal representa- indebtedness or personally guaranteed cor- tive usually pays liabilities incurred during administra- porate liabilities) and the court registry (for tion out of the assets of the estate. Nevertheless, the per- pending lawsuits, maintenance orders, and sonal representative must account for each such payment outstanding judgments). to the satisfaction of all residuary beneficiaries or, on a (c) Advertising for Claimants formal passing of accounts, to the court. Under s. 154 of WESA, the personal repre- Although personally liable for new business debts, the sentative may publish a notice in the BC personal representative is entitled to indemnity out of Gazette requesting claimants against the es- the assets of the estate provided that the personal repre- tate to send their claims to the personal rep- sentative was authorized (i.e. directed or empowered by resentative before a specified deadline, be- instrument or law) to carry on the business. ing not less than 30 days from the date of Issues of liability and indemnity similar to those in busi- publication. If notice of a claim is so given, ness situations may arise in non-business situations. For and the personal representative distributes example, the deceased may have been engaged in a per- the estate after the deadline, the claim is not sonal project (e.g. construction of a home or a boat) that enforceable against the personal representa- was incomplete at the time of their death. The personal tive unless: representative must decide whether to finish the project (i) the personal representative had actual or and dispose of the finished product or to find a buyer on constructive notice of the claim (that is, an as-is basis. the advertisement does not free the per- Lawyers advising personal representatives must be par- sonal representative from responsibility ticularly careful in the advice they give in this area. It is to make all searches and inquiries that often wise to seek the consent of the beneficiaries to would normally be made in order to de- such ventures. termine the liabilities of the deceased); or

Wills 102 (ii) the claim in question is not for a 4. Compromise of Claims liability of the deceased (for example, a Often, the terms of a will give the executor the claim by lawful next of kin that the will authority to compromise claims against the naming the executor is invalid due to deceased or the estate. Otherwise, WESA s. 142 testamentary incapacity). impliedly authorizes a personal representative to A date-of-death creditor who claims after compromise a claim against the deceased. The risk the advertised deadline, but before the claim involved in compromising a claim is that, on is statute-barred, can still enforce the claim: approval or passing of accounts, a beneficiary may object to the payment as being entirely unnecessary (i) against the assets of the estate if they or more than is necessary. In anticipation of a are still held by the personal dispute, the personal representative’s lawyer should representative; record the advice given regarding the validity of the (ii) if the estate was, or would by the claim claim, the projected costs of contesting the claim, have been rendered, insolvent by suing and the projected delay in distribution that would the other creditors to refund ratably the result if the claim were litigated. In some cases, a amount each received in excess of the personal representative may try to obtain consent to rateable payment that would have been the compromise from the affected beneficiaries. In payable if the claim had been known to other cases, it is prudent to seek a court order the personal representative; or approving a settlement. (iii) if barred against the personal repre- 5. Payment of Liabilities sentative by the advertising procedure, by suing the overpaid beneficiaries or (a) Power to Sell Assets intestate successors. An executor’s authority to sell is usually a trust Under s. 8 of the Indian Estates Regulation, for sale or a power of sale expressly set out in C.R.C., c. 954, the superintendent must give the will. A personal representative also has notice to creditors, heirs and other claimants statutory authority to raise money to fund pay- to file claims against the deceased or the es- ment of lawful claims of creditors pursuant to tate with the superintendent. To be allowed, the general power to manage the deceased’s as- the superintendent must receive a claim sets (WESA, s. 142). within eight weeks of giving the notice un- (b) Assets Charged With Payment less the Minister otherwise orders. WESA s. 47 provides that, subject to a contrary 3. Proof of Claims intention appearing in the will, a security interest taken in land or tangible personal property WESA s. 142 provides that a personal representative used to acquire, improve or preserve the asset has the same authority over estate assets as the de- registered under the Land Title Act or the Per- ceased would have if alive. This authority includes sonal Property Security Act follows the gift of dealing with the deceased’s debts. Therefore, a per- that asset into the hands of the beneficiary. sonal representative may pay or allow any liability Therefore the beneficiary is primarily liable to or claim on any evidence the personal representa- pay the debt that goes with the asset. This does tive thinks sufficient, and the personal representa- not limit creditor’s rights, as the secured party tive must act in a reasonable and prudent manner can still seek payment out of other property of and with the fidelity expected of a trustee. the deceased. Where the personal representative does not admit a If the secured party obtains payment from other claim, WESA s. 146 provides a method for limiting assets, the personal representative should be the time in which the creditor or other claimant can advised to seek a covenant from the beneficiary bring an action to enforce the claim to 180 days af- to assume and pay the debt and to indemnify ter giving notice, if part or all of the debt is due at the estate. If this is not possible, an adjustment the time of the notice, or to 180 days after the debt may have to be made in the estate accounts or or a part of it falls due. If the claimant does not an action may have to be commenced against commence an action within that period, the claim is the beneficiary to recover the debt. forever barred. Section 146(2) sets out the requirements for the form of notice. Although WESA s. 47(4) provides that the beneficiary’s liability for the debt is subject to a The 180-day limitation period does not apply to a contrary intention appearing in the will, a gen- claim against the estate by a beneficiary or intestate eral direction in a will for payment of liabilities successor, or to a wills variation claim or proceed- does not signify a contrary intention. ing under Division 6 of Part 4 of WESA (s. 146(5)).

Wills 103 (c) Time for Payment Both interest-bearing and non-interest-bearing liabilities should be paid as soon as reasonably possible. There is no fixed rule that such liabilities must be paid within one year (Tankard, Re, [1942] Ch. 69).

6. Distribution Under Direction of Court Section 39 of the Trustee Act allows the personal representative to apply by petition for an order that the personal representative is permitted to distribute the estate, taking into consideration only the claims that the personal representative has been able to ascertain; and that the personal representative is not liable for any claims that the personal representative had no notice of at the time of distribution. If the court makes an order under s. 39, the order protects the personal representative against claims to share in the estate. It does not prevent creditors from pursuing the beneficiaries.

7. Insolvent Estates If the estate’s liabilities exceed its assets, it can be handled as an insolvent estate either under WESA Division 12 of Part 6 or under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. Under WESA, the personal representative administers the estate. Under the Bankruptcy and Insolvency Act, a trustee in bankruptcy administers the estate. However, if the Bankruptcy and Insolvency Act is applied (for example, if a receiving order is made at the instance of a creditor), the federal statute will apply and the provincial statute will be pre-empted. Lawyers should be cautious in advising clients to undertake the administration of insolvent estates as there is a specified hierarchy of priority of payments from the estate and personal liability can attach to the personal representative (and perhaps passed on to the lawyer) if the hierarchy is not strictly followed.

Wills 104 December 15. Further, if the deceased’s will Chapter 14 contains a “spousal trust” as described in Chapter 14, §14.03, the due date is extended to 18 months from death, but interest on any unpaid tax accrues from the date the return would have been due had there been no such Tax Consequences Resulting from trust (s. 70(7)(a)). 1 Payment of the tax for the year of death is due the Death of a Taxpayer April 30 of the following year if death occurs before November 1. If the date of death is after October 31, tax is payable 6 months after the This chapter provides a basic overview of the tax date of death. consequences arising upon the death of a taxpayer. Although it highlights areas of concern commonly In certain cases, as indicated below, the legal encountered by practitioners, it should not be relied on representative may elect to file more than one as a comprehensive analysis of all tax matters arising income tax return for the year of death. The upon death. When you encounter actual problems in advantage of spreading the income of the de- practice, refer to the provisions of the Income Tax Act, ceased in the year of death over several returns R.S.C. 1985, c. 1 (5th Supp.). is that certain personal tax deductions and credits may be duplicated and lower marginal tax Different tax consequences may or may not arise upon rates may be achieved (Interpretation Bulletin the death of an Indigenous person who was registered IT-326R2 and s. 114.2). (or was entitled to be) under the Indian Act, R.S.C. 1985, c. I-5; the consequences will vary depending upon A separate return may be filed, upon an elec- the deceased’s particular circumstances. A discussion of tion by the legal representative, if the taxpayer tax consequences relevant to particular circumstances is operated a business as a proprietorship or was a beyond the scope of this chapter; seek expert tax advice. member of a partnership having a fiscal year other than a calendar year. The election is applicable in respect of the amount of income that [§14.01] Duties of Executors, Administrators the deceased, as a member of a partnership or and Trustees the proprietor of a business, would be deemed under the Act to have received from the part- 1. Returns nership or business during the period before the (a) What and When to File date of death and after the end of the last fiscal period of the partnership or business. In the The legal representative of the deceased has a case of a partnership, this election will only be responsibility to file a terminal income tax re- applicable when the death of the partner causes turn for the deceased. Death is a taxable event the fiscal period of the partnership to end and the obligations of the deceased to pay taxes (s. 150(4) and Interpretation Bulletin and file returns become the responsibility of IT-278R2, para. 2). the personal representative. Death creates a year end for tax purposes and the fiscal period The legal representative may also elect to file a covered by the terminal return extends from separate return if the deceased taxpayer was an January 1 of the year of death up to and includ- income beneficiary of a testamentary trust ing the date of the deceased’s death. The ter- which had a taxation year other than a calendar minal return is the ordinary T-1 return for the year. This return includes only income of the year of death and generally must be filed by the deceased from the trust which arose after the later of six months from the date of the de- end of the last taxation year of the trust and be- ceased’s death or April 30 of the year follow- fore the date of death of the taxpayer ing death. (s. 104(23)(d)). If the deceased or the deceased’s spouse was The above-noted separate returns must be filed carrying on business, the due date is June 15 of by the later of April 30 of the year following the year following death or 6 months after the death or six months following the date of date of death if the date of death was after death.

1 Finally, an election may be made to file a Updated by Denese Espeut-Post of Avery Law Office in Sep- separate return in respect of the value of tember 2019 and December 2018. Previously reviewed by PLTC in January 2016. Prepared for PLTC by Frank W. Quo Vadis in “rights or things” owed to the taxpayer at the March 1988, and revised annually by the author until April time of death (s. 70(2)). Generally, “rights or 2004. things” include items of income which have

Wills 105 been earned prior to death, are unpaid but business location. The entire gain realized on payable at the time of death and would have this type of property is included in income as been included in the deceased’s income when business income, not a capital gain. Again, received. Examples of “rights or things” are there is no deemed disposition when such land matured uncashed bond coupons, dividends is transferred to a spouse or spousal trust which have been declared but are not yet paid (s. 70(5.2)(d)). at the time of death, and unpaid salaries Principal Residence relating to pay periods ending before the date of death. A “rights or things” return must be The principal residence of a deceased taxpayer filed by the later of one year from the is deemed to be disposed of immediately before deceased’s date of death and 90 days after the death for its fair market value. No gain or loss mailing of any Notice of Assessment in respect may arise, however, if the principal residence of tax assessed on income of the deceased for exemption applies (ss. 40(2)(b) and 40(4)). the year of death (s. 70(2) and Interpretation Personal Use Property Bulletin IT-212R3). Personal use property, property used by the de- (b) Taxation of Property Held at Death ceased for personal use and enjoyment, is capi- Non-Depreciable Capital Property (s. 70(5)(a)) tal property subject to capital gains. However, a $1,000 minimum rule applies: property pur- Non-depreciable capital property (for example, chased for less than $1,000 is deemed to have land or shares that are not inventory or the sub- cost $1,000. The proceeds of sale are deemed ject of an adventure in the nature of trade) is to have been the greater of $1,000 and the ac- deemed to have been disposed of at its fair tual cost. Losses from personal use property are market value immediately before the time of deemed to be nil. the deceased’s death. Accordingly, subject to specific exceptions, all accrued gains and loss- Other Properties es on non-depreciable capital property of the Sections 70(5.1) and 70(5.2) contain additional deceased up to the time of death are realized. provisions concerning any eligible capital Transfers of non-depreciable capital property property (for example, goodwill and intellectu- to a spouse or spousal trust, and transfers of al property rights) or resource property of the non-depreciable farm property to a child, are deceased taxpayer. Consult these provisions specific exceptions which partially or totally when the taxpayer holds these types of proper- abrogate the general rule of deemed realization ty at the time of death. of accrued gains and losses (ss. 70(6), 70(9) to (9.8)). Joint Tenancies Depreciable Capital Property (s. 70(5)(a)) The Canada Revenue Agency considers any property held in a joint tenancy to be held 50% Depreciable capital property will be deemed to by each joint tenant and subject to a deemed have been disposed of by the taxpayer at its fair disposition on death. While probate fees can be market value immediately before death. This avoided by holding property as joint tenants, deemed disposition may produce recapture of the same is not true of income tax unless a capital cost allowance previously claimed and spousal rollover applies. capital gains or could result in the realization of a terminal loss. Once again, there are specif- (c) Deductions ic exceptions to the deemed realization rules Capital Losses (s. 111(2)) when depreciable capital property is transferred to a spouse or spousal trust or depreciable farm If the deceased’s allowable capital losses (that property is transferred to a child (ss. 70(6), is, 50% of their capital losses) for the year of 70(9) and (9.1)). death exceed the deceased’s taxable capital gains (that is, 50% of their capital gains) for Land Inventory (s. 70(5.2)(c)) that year, any such excess may be deducted Any land which is part of an inventory of a against the deceased’s income from other business owned by the deceased taxpayer is sources (for example, employment or business deemed to have been disposed of immediately source income). This is an exception to the before death for proceeds equal to its fair usual rule that capital losses of a taxpayer may market value at that time. Land inventory only be deducted against capital gains. If the includes properties held for resale or on net capital losses are not completely utilized in speculation as opposed to land held for the the year of death, any excess may be carried production of rental income or for use as a back to the year preceding the year of death

Wills 106 and applied against the taxpayer’s income in When amounts receivable are not transferred to that year. a spouse or spousal trust, it is not possible to defer the recognition of sale proceeds and such An additional limitation on the utilization of proceeds must be included in income in the these net capital losses in either of these two year of death even though they are not actually years is that the loss that can be used against payable until later years. other sources of income is reduced by the amount of the capital gains deduction 2. Clearance Certificates previously claimed by the taxpayer (s. 110.6). A clearance certificate certifies that all tax, Canada Charitable Donations Pension Plan contributions, unemployment insur- The deduction tax credit that can be claimed ance premiums, interest and penalties payable by for a deceased taxpayer in the terminal return the deceased have either been paid or have been se- in respect of charitable donations is limited to cured to the satisfaction of the Minister. A legal the lower of the eligible gift amounts and 100% representative is required to obtain a clearance cer- of the decedent’s net income for the year of tificate in respect of the deceased’s obligations un- death (s. 118.1). der the Act before distributing any property under the legal representative’s control (s. 159(2)). Pro- If however the charitable donation cannot be vided all returns have been filed and all tax, interest deducted in the year of death due to insuffi- and penalties have been paid, the Canada Revenue cient income, the charitable donation may be Agency will issue a certificate for final distribution carried back to the taxation year immediately of all property in the estate. If the legal representa- prior to death and used to offset up to 100% of tive distributes the assets of the estate without ob- the decedent’s income in that year. taining an income tax clearance certificate, the le- (d) Personal Exemptions gal representative is personally liable for any tax, interest or penalty that remains payable (s. 159(3)). In the terminal returns of a deceased taxpayer, Personal liability is limited to the value of the prop- full personal tax credits may be claimed erty that was actually distributed. regardless of when the taxpayer died during the year. Additionally, if an election has been made Provided acceptable security is furnished to the to file separate returns for each business, trust Minister, the legal representative may file an elec- or “rights or things” income, a limited number tion to pay tax arising on death by installments of personal tax credits set out in s. 118 may (s. 159(5)). A maximum of ten equal consecutive also be deducted on those returns (s. 118.93). annual payments are allowed, with interest payable from the day the tax would otherwise have been (e) Reserves payable on the balance of tax outstanding. Not all A reserve for tax purposes is, in simplistic sources of income may be paid by installment but terms, an amount which is kept back or “re- “rights or things” included in the deceased’s in- served” from the income reported by a taxpay- come, recapture or capital cost allowance in excess er. Reserves are only permitted under the Act of terminal losses, capital gains in excess of capital in limited circumstances. For example, upon losses and income in excess of expenses from the disposition of a capital property, a taxpayer deemed dispositions of resource property and land faces a potential immediate inclusion in in- inventory qualify for this treatment. come. When the full amount of the proceeds of A clearance certificate protects a personal disposition is not immediately due, however, representative from personal liability, but does not an amount may be deducted, in some circum- prevent an audit, assessment or reassessment. If the stances, as a reserve for proceeds not yet due. estate is reassessed, the Minister may take steps to No reserve is allowed as a deduction in the seize assets distributed to the beneficiaries. taxpayer’s terminal year except when an amount receivable is transferred due to the tax- [§14.02] Beneficiaries payer’s death to the taxpayer’s spouse or spousal trust and the appropriate election is 1. General made (ss. 72(1) and (2)). When an election is made by the personal representative and the The general rule for estates administered in Canada spouse or spousal trust, a reserve may be and paid to Canadian beneficiaries is that the inher- claimed if it could have been claimed by the ited amount is not taxable in the hands of the bene- deceased taxpayer had the deceased taxpayer ficiary. This applies to those assets owned by the survived. deceased at the date of death.

Wills 107 The taxation of income earned by an estate can be “refund of premiums” is defined as an allowable quite complex, and will be impacted by the type of portion of an amount paid from a RRSP before its testamentary trust established. A trust is a separate maturity (for example, upon the annuitant attaining taxpayer and is treated as a conduit for income paid the age of 71) to a spouse of the annuitant as a con- or payable to a beneficiary. All income generated sequence of the annuitant’s death, or any amount by the testamentary trust will be taxed either in the paid out of the RRSP to a child or grandchild of the trust or the hands of the beneficiary. Beneficiaries annuitant who was, at the time the annuitant died, must include in their income any portion of the es- financially dependent on the annuitant for support tate income that is paid or payable to them in the (s. 146(1)). year, with certain exceptions for amounts paid to a When a spouse, child or grandchild is not named as beneficiary but designated by the estate a beneficiary but the refund of premiums is allocat- (ss. 104(13.1) and (13.2)). ed to the beneficiary through the will or intestacy, In general, an amount is deemed under the Act to the refund may be jointly designated by the person- be payable by the estate if it is actually paid to the al representative and the beneficiary as the income beneficiary or if the beneficiary is entitled to en- of the beneficiary to be taxed in the hands of the force payment of the amount (s. 104(24)). In order beneficiary as a refund of premiums and not the in- to prevent double taxation on such income, the es- come of the deceased (s. 146(8.1)). tate is allowed to deduct from its income the Where a spouse is a beneficiary of an unmatured amounts that are taxable to the beneficiary. If the RRSP, or a financially dependent child or grand- beneficiary is taxed on an amount that is payable child is a beneficiary of a matured or unmatured but not yet received, there is no additional tax when RRSP, the proceeds qualify as a refund of premi- the amount is actually received. ums and the personal representative may reduce the The Act contains provisions that permit certain amount included in the final return amount paid the types of income to the estate to retain their beneficiary. This is a discretionary election that can character when they are “flowed through” to the be made by the personal representative without the beneficiaries. This conduit principle applies to such consent of the beneficiary. However, the beneficiar- income as dividends from taxable Canadian ies may then transfer the refund of premiums into corporations, non-taxable dividends, taxable capital their own RRSP, RRIF or annuity and defer any gains and certain types of foreign income immediate tax liability on that amount. This rollo- (ss. 104(19) to (22)). If there were no “flow ver of premiums is not available to adult financially through” provisions, then these sources of income dependent children or grandchildren, unless they would lose their original character in the estate and are dependent due to physical or mental infirmity would be received by the beneficiary as ordinary (s. 60(1)). income. A notable exception to the “flow through” provisions is losses, as losses realized by the estate 3. Death Benefits cannot be flowed through to the beneficiaries. Death benefits are included in income and taxable Personal representatives should consider the to the recipient (s. 56(1)(a)(iii)). Death benefits are, significant changes made to income tax rules in general, defined to mean the aggregate of regarding income splitting for individuals resident amounts received by a “taxpayer” in a taxation year in Canada, effective January 1, 2019. These upon or after the death of an employee in recogni- changes may affect income allocation. The changes tion of the employee’s service in an office or em- broaden the application of the tax on split income ployment. When the surviving spouse of the em- (“TOSI”) and limit the ability to sprinkle income to ployee receives death benefits, no benefit is lower-income family members. Amounts paid by a brought into the spouse’s income to the extent the trust or a private corporation to an individual will death benefit received is less than $10,000 be reviewed to determine if the income qualifies as (s. 248(1)). an “excluded amount” or “split income”; “split If the death benefit is shared between the surviving income” will be subject to TOSI and taxed at the spouse and a person other than the spouse, there highest marginal rate for that tax year. will be a reduction to the benefit received by the non-spouse by certain amounts based upon any 2. RRSPs death benefits received by the surviving spouse of the employee in prior years. The general rule is that the full value of the deceased’s RRSP or RRIF is fully included in the final return of the deceased. However, if the plan qualifies as a “refund of premiums” then the amount may be deducted from the final return. A

Wills 108 [§14.03] Exceptions to the General Rules (v) the property must vest indefeasibly in the Outlined Above spouse, common-law partner, spousal trust or common-law partner trust within 1. Spouses and Spousal Trusts 36 months of the taxpayer’s death or within such longer period as the Minister con- (a) Result When Capital Property of Deceased siders reasonable. Passes to a Spouse or Spousal Trust (c) Electing out of the Rollover As noted earlier, the rules regarding the deemed realization of capital gains and It is possible for the legal representative to recapture on death are modified when capital elect not to have the rollover provisions apply property owned by the deceased passes to a when capital property is transferred to a spouse spouse or a spousal trust (s. 70(6)). In these or spousal trust (s. 70(6.2)). Such an election circumstances, the Act provides for a would be beneficial when the deceased had “rollover” of the cost base of the capital loss carryforwards, which could be used to off- property from the deceased to the spouse or a set any gains having accrued on the property of spousal trust. The result is that tax on capital the deceased. When the election is made, the gains and recapture is deferred until the adjusted cost base of the capital property ac- surviving spouse disposes of the property. The quired by the spouse or spousal trust is “rollover” of the cost base is automatic in such “stepped up” for the purposes of determining situations and there is no requirement for an future gains realized by the spouse or spousal election to be filed. However, as outlined trust. below, it is possible for the legal representative (d) Land Inventory of the deceased to elect not to have these rollover provisions apply to one or more capital Land that was held as inventory by the de- properties of the deceased. ceased may also be rolled over to a spouse or spousal trust (s. 70(5.2)(d)). The requirements (b) Conditions Necessary for Rollover to Apply for this automatic rollover are the same as out- The requirements necessary for the spousal lined with respect to capital property. “rollover” provisions to apply are as follows: (e) Reserves (i) the deceased must have been resident in When property subject to a reserve is trans- Canada immediately before death; ferred to a spouse or spousal trust on the death (ii) if the recipient is a spouse or common-law of the taxpayer, the legal representative and the partner, the recipient must have also been spouse or spousal trust may jointly elect to resident in Canada immediately before the claim a reserve in the terminal return of the de- deceased’s death; ceased (s. 72(2)). The amount of the reserve claimed is then included in the income of (iii) the property must have been transferred as spouse or spousal trust in the first taxation year a result of the deceased’s death (for ex- ending after the death of the taxpayer. The ample by will, intestacy, joint tenancy, spouse or spousal trust may then, in turn, claim etc.); a reserve to the extent the taxpayer could have (iv) if the recipient is a trust created by the de- claimed it had the taxpayer survived. ceased’s will: 2. Farm Property  the trust must be resident in Cana- da immediately after the property (a) Result vests in it, In addition to the spouse or spousal trust, a  the spouse or common-law partner rollover with respect to specified farm property must be entitled to receive all of is allowed to a farmer’s child, either directly or the trust’s income during the through a spouse trust (ss. 70(9) and (9.1)). The spouse’s or common-law partner’s Act also provides for the rollover of interests in lifetime, family farm partnerships and shares in family farm corporations (ss. 70(9.2) and (9.3)).  no person other than the spouse or common-law partner may receive The definition of “child” includes child, grand- or obtain use of any of the capital child, and great-grandchild, as well as a person or income of the trust during the who, at any time before attaining the age of 21, spouse’s or common-law partner’s was wholly dependent on the taxpayer for sup- lifetime; and port and of whom the taxpayer had, at that

Wills 109 time, the custody and control (s. 70(10)(a)). The specified farm property rollover is also available to the parents of a taxpayer when the personal representative has so elected (s. 70(9.6)). (b) Conditions Necessary for Rollover If a taxpayer’s land in Canada or depreciable property in Canada of a prescribed class (i) is transferred or distributed on or after the taxpayer’s death and as a consequence of death to the taxpayer’s child; and (ii) can be shown within 36 months of death, or such longer period as the Minister considers reasonable in the circumstances, to have vested indefeasibly in the child; and if (iii) the property was used immediately before the taxpayer’s death by the taxpayer, the taxpayer’s spouse or common-law partner, or any of the taxpayer’s children in the business of farming on a continuous basis; and (iv) the child was resident in Canada, immediately before the taxpayer’s death, then the property is deemed to have been disposed of by the taxpayer and acquired by the child at its adjusted cost base or undepreciated capital cost, as the case may be, to the taxpayer immediately before death (s. 70(9)). If property which would otherwise qualify for the farm property rollover to a child has passed to a spousal trust on death, a rollover of the property from the spousal trust to a child of the taxpayer in whom it vests indefeasibly will result, provided the property is transferred on the death of the beneficiary spouse and as a consequence of the death (s. 70(9.1)). In addition, the other conditions necessary for a rollover to occur, as mentioned above, must be met.

Wills 110 Construction Ltd. v. Bird Construction Co., 2018 SCC Chapter 15 8). However, while a court may order the disclosure of trust documents to a beneficiary as part of the court’s inherent jurisdiction to supervise the administration of trusts, 1 a beneficiary is not entitled as of right to disclosure of a Accounts trust document (Schmidt v. Rosewood Trust Ltd. (Isle of Man), [2003] UKPC 26; see also D.M.M. v. R.J.M., 2005 BCSC 207; but see Pirani v. Pirani, 2020 BCSC 974, where the court ordered disclosure of various doc- [§15.01] Introduction uments because of the trustee’s fiduciary duty to the beneficiaries). One of the hallmarks of the fiduciary duty imposed on the personal representative is the duty to account to [§15.03] Requirement to Pass Accounts persons who have a beneficial interest in the estate and to creditors of the estate. While this duty arises at The Trustee Act, R.S.B.C. 1996, c. 464 includes common law, the exact procedure and method of passing provisions requiring a personal representative to pass accounts is derived from common law principles, a few accounts. statutory references, and general custom and practice. A complete analysis of this topic can be found in Section 99(1) Chapter 16 of the British Columbia Probate and Estate The personal representative must pass the first accounts Administration Practice Manual (Vancouver: CLEBC). within two years from the date of the grant of probate or letters of administration, and thereafter as instructed by [§15.02] Duty to Account the court, unless all beneficiaries consent or the court orders otherwise. The personal representative owes a duty to account to Section 99(2) the beneficiaries of the estate (including income and capital beneficiaries, whether vested or contingent), leg- Any person beneficially interested in the estate may atees (that is, recipients of specific bequests), unpaid require a personal representative to pass accounts creditors of the deceased, successor trustees, and other annually within one month from the anniversary of the persons who have an interest in the deceased’s assets. grant or the personal representative’s appointment. The common law requires a personal representative to Section 99(3) keep proper books and be ready at all times to account, If the personal representative fails to comply with although this responsibility does not mean that a com- ss. 99(1) or (2), or if the accounts are incomplete or in- plete set of accounts must be maintained on a constant accurate, the personal representative may be required to basis or that a formal passing of accounts will necessari- attend before the court to show cause why the accounts ly ever be required. have not been passed. The personal representative must give to anyone to The delay and expense of passing accounts formally be- whom they owe a duty to account such information as fore the court can be avoided by obtaining approval of that party reasonably requires. Therefore, the residuary the accounts by all persons to whom the duty to account beneficiary would be entitled to a full and complete is owed (Re Mitchell Estate (1997), 46 B.C.L.R. (3d) summary of estate assets whereas a legatee would be 383 (C.A.)). This consensual procedure is not available entitled only to information showing whether their lega- if approval is withheld or is not otherwise available (for cy will be paid. example, if a beneficiary is unascertained, cannot be The personal representative owes a duty to provide the found or is suffering from a disability, or where there beneficiaries of an estate with information about the es- are infant beneficiaries). tate and the progress of the estate administration. If a will contains a term which requires the personal repre- [§15.04] The Accounts sentative to withhold information from a beneficiary, that term is likely invalid (Spelay (Litigation Guardian The Supreme Court Civil Rules set out a detailed proce- of) v. Spelay, 2007 SKQB 408; see also Valard dure under which personal representatives can pass their accounts and seek compensation (Lau v. Char, 2015 1 Updated by Hugh S. McLellan of McLellan Herbert in March BCSC 623). Rule 25-13 sets out the form that a personal 2021. Previously revised by Denese Espeut-Post (2018 and representative’s accounts should take and Rule 25-14 2019); PLTC (2014 and 2016); Kirsten H. Jenkins (2005 and sets out the procedure for applications. 2006); and Margaret H. Mason (1996–2000).

Wills 111 A statement of account affidavit in Form P40 must in- When advising personal representatives or trustees who clude the following: have questions regarding tax matters, or who require tax advice in executing professional duties, recommend that (a) a description of the assets and liabilities of the they consult an appropriate advisor. estate as at the later of the following:

(i) The date of the deceased’s death; and [§15.06] Approval of Accounts (ii) The last day of the period covered by the most recent accounting passed or As mentioned previously, generally it is preferable to approved and consented to in writing by have all those to whom the duty to account is owed all beneficiaries; approve the accounts. If approval is probable, all those entitled to a full accounting should be sent the accounts (b) a description, in chronological order, of all capi- together with a suitable form of release and consent to tal transactions that occurred since the date set the accounts, including any remuneration being sought out in paragraph (a); by the personal representative, as well as a waiver of a (c) a description, in chronological order, of all informal passing of accounts before the court. In the case come transactions that occurred since the appli- of specific or pecuniary legatees, acknowledgments of cable date set out in paragraph (a); receipt of the gift or releases should be obtained in exchange for their legacies, but no obligation arises to (d) a description of the assets and liabilities of the provide accounts unless the legacies have not been fully estate as at the last day of the period covered by satisfied. the accounts to be passed; A personal representative should provide all necessary (e) a calculation of the remuneration, if any, information to a beneficiary before that beneficiary claimed by the applicant for i) the applicant; and signs a release and consent, to avoid the possibility of a ii) any current or previous personal representa- court requiring a formal passing of accounts because the tive or trustee for whom a claim for remunera- beneficiary was not apprised of all facts before signing a tion has not yet been made; and release (Leckie v. Mitchell, 1997 CanLII 2288 (f) a description of all distributions made and any (B.C.C.A.)). distributions anticipated to be made out of the If a beneficiary is incompetent and a committee has been estate; and appointed, the committee has the power to approve (g) any other details or information the court may accounts (Patients Property Act, s. 15(1)). require or the applicant considers relevant. If a beneficiary is a minor, accounts must be formally To prepare a proper set of accounts, it is necessary to approved before the court by the personal representative. maintain detailed records of all transactions. The per- A guardian cannot approve accounts on behalf of a sonal representative must be able to produce proper minor and the Public Guardian and Trustee will not do vouchers for all receipts and payments and to provide so either. However, it may be possible to have the full explanations for the administration of trust assets. accounts approved by the court on a summary basis. Without full receipts or full explanations, the personal If consent cannot be obtained and accounts must be representative may be personally liable for expenses. formally approved, the personal representative or a The preparation of accounts will be simplified if all person interested in the estate may apply under Rule 25- funds are consolidated into a single estate bank account 13 of the Supreme Court Civil Rules for a formal and if the personal representative maintains complete passing of accounts. The process is initiated by filing the notes in the form of a diary recording all steps taken, affidavits prescribed by that Rule, as follows: including the exercise of all discretionary powers. (a) the affidavit in support of application to pass [§15.05] Tax Considerations accounts (Form P38); and (b) the statement of account affidavit (Form P40), It is important to note that accounting statements pre- along with a notice of application in the existing pared for tax purposes may have significant differences court file. to those prepared for trust purposes. For example, certain types of property that would normally be considered If there is no existing court proceeding, the process may capital assets for trust purposes are not capital properties be initiated by requisition under Rule 25-14(1). for purposes of the Income Tax Act, R.S.C. 1985, c. 1 The personal representative is generally entitled to be (5th Supp.). Similarly, the payment of a stock dividend indemnified by the estate for the costs of the passing of may be treated as a capital receipt for trust purposes but accounts (MacLean v. MacLean, 2009 BCSC 292; Re as an income receipt for tax purposes. Hillis Estate, 2015 BCSC 208), unless there was some conduct on the part of the personal representative that is

Wills 112 reprehensible and deserving of rebuke (Bigras v. Bigras Estate, 2011 BCSC 950 at para. 64). Beneficiaries generally obtain their costs for participating in the passing of accounts process (Re Chute Estate, 2014 BCSC 344 at para. 102). However, if the beneficiary’s objections to the accounts are not reasonable, the beneficiary may have to pay costs (Re Haworth Estate, 2015 BCSC 1530).

[§15.07] Discharge of Personal Representative

A personal representative may be discharged from their duties informally or by application to court. A personal representative is informally discharged once they have: (a) paid and settled all debts and claims; (b) distributed the estate to the beneficiaries; (c) provided accounts to all those to whom the duty to account is owed; (d) obtained releases from the persons to whom the duty to account is owed; (e) advertised for creditors, if necessary; (f) obtained a clearance certificate for distribution under the Income Tax Act; and (g) where an administration bond has been posted, obtained an order for its cancellation.

If the personal representative wishes to be formally discharged by application to the court, the personal representative must apply under s. 157 of WESA. One of the advantages of obtaining a formal discharge is that a court order discharging the personal representative releases the personal representative from all claims in respect of the administration, except those arising from “undisclosed acts or omissions” (WESA s. 157(5)). An order made under s. 157 of WESA does not discharge or remove a personal representative as a trustee or release the person from liability for acts or omissions made as a trustee (s. 157(6)). In practice, many personal representatives do not seek a discharge. This would allow the un- discharged personal representative to deal with assets that come to the estate in the future (such as from unex- pected inheritances).

Wills

113 Chapter 16 [§16.03] Amount of Remuneration If remuneration is fixed by the terms of the will or by an agreement, the personal representative will be limited to Remuneration of Personal claiming the remuneration so specified or agreed to. 1 If the amount of remuneration is not fixed by the will or Representatives and Trustees by agreement, s. 88 sets an upper limit on the amount of remuneration to: [§16.01] Introduction (a) 5% of the gross aggregate value of the capital of the estate (gross aggregate value is the realized Three principal issues arise when considering the remu- value of the original assets of the estate, without neration of personal representatives and trustees: enti- deduction of the value of any charges against the tlement, amount and procedure. For further discussion of assets or liabilities of the estate, and the value at these issues, refer to Chapter 17 of the British Columbia the date of distribution of any original assets dis- Probate and Estate Administration Practice Manual tributed in specie to the beneficiaries) (s. 88(1)); (Vancouver: CLEBC). (b) 5% of the income earned during the administration (s. 88(1)); and [§16.02] Entitlement to Remuneration (c) an annual “care and management fee” of 0.4% of the average market value of the assets At common law, a personal representative is not allowed (s. 88(3)). to profit from their office, unless authorized by the terms of the will or trust. However, this rule has been relaxed It is important to realize that s. 88 imposes a ceiling on by statute. Section 88 of the Trustee Act, R.S.B.C. 1996, the maximum remuneration which can be claimed. In an c. 464 provides for remuneration to a personal repre- estate of average complexity, the personal representative sentative based on the gross aggregate value of the es- will generally be entitled to fees of 5% of the income tate, including capital and income, and also provides for and fees in a range of 2-4% of the capital, as well as the an annual care and management fee. The provision is care and management fee. A court or registrar reviewing applicable in the absence of any remuneration provisions a personal representative’s claim for remuneration de- in the will, or on an intestacy. termines the amount taking into account the s. 88 ceiling and the following criteria derived from case authorities: Often, the will outlines the remuneration to which the personal representative is entitled and in such circum- (a) the magnitude of the estate; stances, s. 88 is inapplicable and the will governs. It is (b) the care and responsibility involved; important to carefully review the terms of the will when the personal representative is also a beneficiary because (c) the time occupied in the administration; there is a rebuttable presumption at common law that if a (d) the skill and ability displayed; and legacy, other than a residuary bequest, is made in favour of a personal representative, that legacy is intended to be (e) the success achieved in the final result. in lieu of remuneration. The will may expressly provide When there are two or more personal representatives, the that the personal representative can take both the legacy total remuneration is determined in the same manner as and the remuneration. if there had been one personal representative. In the case When the will sets out the remuneration and the personal of co-trustees or sequential trustees, the total remunera- representative was one of the witnesses to the will, the tion will be no more than the maximum amount allowed provision is void (s. 43, WESA) unless the court orders by statute. If the two personal representatives cannot otherwise. If it is void, section 88 of the Trustee Act will agree on the split between themselves, this can be de- still apply. termined by the court or registrar. In addition, a personal representative’s entitlement to When a personal representative retains someone (for remuneration may be fixed by an agreement between the example, a lawyer or trust company) to do administra- testator and the personal representative, or an agreement tion work that should have been done by the personal between the personal representative and the estate representative, the resulting fees should be borne by the beneficiaries. personal representative and not charged against the estate as a disbursement of the personal representative.

1 Updated by Hugh S. McLellan of McLellan Herbert in March With respect to the annual “care and management fee”, 2021. Previously updated by Denese Espeut-Post (2018 and the case of Re Pedlar (1982), 34 B.C.L.R. 185 (S.C.) 2019); PLTC (January 2016); Kirsten H. Jenkins and Raphael sets out the following principles: Tachie (2014); Kirsten H. Jenkins (2005 and 2006); and Gary J. Wilson (1995 and 1996).

Wills 114 (a) the care and management fee allowed under A personal representative may retain a professional to s. 88(3) is an allowance for remuneration in ad- prepare the accounts (except when the estate is small and dition to the allowance under s. 88(1); simple or the personal representative has the experience (b) some of the factors that should be taken into and competence to prepare the accounts) and to prepare consideration in determining what, if any, fees income tax returns. should be allowed are as follows: A personal representative may be required to establish (i) the value of the assets being administered, the reasonableness of the expenses they have incurred while administering the estate. If any expenses are de- (ii) the nature of the estate assets being termined not to be reasonable on a passing of accounts, administered, the personal representative will not be indemnified for (iii) the degree of responsibility imposed upon those expenses from the estate, or if already paid, be re- the trustee including the length or duration quired to reimburse the estate. of the trust, If the estate is insolvent, the personal representative may (iv) the time expended by the trustee in the care still be personally liable for the costs. and management of the estate, (v) the degree of ability exhibited by the [§16.05] Procedure and Payment trustee, (vi) the success or failure of the trustee, and Remuneration of the amount claimed by the personal representative may be fixed by the approval of the estate (vii) whether or not some extraordinary services beneficiaries. If the approval of all the beneficiaries who has been rendered by the trustee; have a vested or contingent interest in the residue of the (c) the trustee should give the court a general sum- estate (it is from the residue of the estate that the remu- mary of both the estate and the trustee’s ser- neration is usually paid) cannot be obtained (i.e. because vices, including information on the factors some beneficiaries are minors, are mentally incompetent, above; or are unascertained), the remuneration must be fixed by (d) the court has discretion to determine the amount court order obtained on application under s. 89 of the of the annual care and management fee, up to a Trustee Act or on a passing of accounts under Supreme maximum of 0.4%; Court Civil Rule 25-13(1). (e) the average market value of the estate is calcu- Supreme Court Civil Rule 25-13(1) provides that the lated by determining the market value of the as- personal representative or a person interested in the es- sets at the commencement of the twelve month tate can initiate a passing of accounts by filing an appli- period, adding the market value at the end of cation. An application for remuneration may be brought that period, and dividing by two; separately or together with an application to pass accounts. If the applicant is someone other than the per- (f) the usual practice is to charge the care and man- sonal representative, the applicant must file an affidavit agement fee two-thirds to capital and one-third explaining why an accounting is required (SCCR to income; and 25-13(6)(b)). (g) the application for the care and management fee need not be made within the period for which it Unless the court on application otherwise orders, the is claimed. costs of fixing the remuneration of a personal representative, either on a s. 89 application or a passing of accounts, shall be assessed as special costs and paid from [§16.04] Expenses the estate (SCCR 25-13 and 14-1(6); Re Kanee Estate (1991), 41 E.T.R. 263 (B.C.S.C.); and Szpradowski In addition to remuneration, a personal representative is (Guardian ad litem) v. Szpradowski Estate (1992), 4 entitled to recover out-of-pocket expenses that were C.P.C. (3d) 21 (S.C.)). properly and reasonably incurred in the administration of the estate. Personal representatives often take remuneration in advance of formally being rewarded remuneration. While A personal representative may employ a lawyer and pay the terms of a will may authorize pretaking, there is no the lawyer’s bill for fees and disbursements from the statutory authority permitting pretaking; pretaking under estate provided the legal services were necessary and s. 88 of the Trustee Act is improper and constitutes a proper with regard to the administration of the estate. breach of trust. If a personal representative pretakes re- However, services that the personal representative muneration, the personal representative may be required should have performed while administering the estate to repay that remuneration to the estate with interest. The and charges for services rendered in advising the person- personal representative may also enter into an agreement al representative on their right to remuneration cannot be with the beneficiaries to allow pretaking if all beneficiar- charged against the estate. ies of the estate or trust are ascertained and sui juris.

Wills 115 Remuneration is treated as a lien against the estate. If the estate is insolvent, subject to the rights of secured creditors, remuneration has priority of payment after reasonable funeral and testamentary expenses. Remuneration paid to a personal representative or a trustee is taxable as income in their hands. The personal representative or trustee may have statutory remittance obligations in relation to the remuneration received, depending upon the quantum of remunerations as well as the relationship between the deceased and the personal representative.

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116 unless a “charging clause” in the will authorizes such a Chapter 17 payment or unless all the beneficiaries are sui juris and otherwise consent. This rule derives from the general rule under fiduciary law that a fiduciary, such as a Lawyer’s Remuneration1 personal representative, cannot personally benefit from their position as fiduciary (that is, by claiming fees for acting in the capacity of estate lawyer). [§17.01] Introduction This is an example of a charging clause: Any executor or trustee of my Will who is a lawyer The following summary reviews issues relating to a shall be entitled to charge and be paid all usual profes- lawyer’s remuneration for services rendered in sional fees for all legal services provided by them, or connection with probate and estate administration. by their firm, in connection with the probate of my Specifically, these issues relate to entitlement, nature of Will and any codicil to it and the administration of my work for which legal fees may be claimed, the estate and the trusts of my Will, in addition to any re- mechanics of rendering a bill and, if necessary, having muneration for acting as an executor and trustee. that bill formally assessed. A charging clause in a will is considered a legacy, so if Rule 14-1(3) of the Supreme Court Civil Rules sets out the lawyer is an attesting witness to the will, the charg- the criteria that are considered for fees charged for legal ing clause is void by operation of s. 43 of WESA. How- work in the administration of estates. ever, under s. 43(4) of WESA a court can declare that such a gift is not void if the court is satisfied that the [§17.02] Entitlement to Remuneration will-maker intended to make the gift to the lawyer even though the lawyer acted as a witness. Despite this, if all When a lawyer is retained to provide legal services in beneficiaries are sui juris, the beneficiaries may agree to the administration of an estate, the lawyer’s client is the the lawyer being paid for legal services from the estate. personal representative and not the estate. Accordingly, the personal representative is personally liable for the In the absence of a charging clause, the lawyer who is a lawyer’s fees, but is entitled to be indemnified from the personal representative may engage the services of the estate for those lawyer’s fees, provided that the legal lawyer’s partners, and the fees for their services may be costs have been reasonably and properly incurred and do paid from the estate, provided the lawyer who is the per- not relate to work that the personal representative should sonal representative does not share in or otherwise bene- have performed themselves (i.e. work within the compe- fit from the fees (Re Lohn Estate (1994), 98 B.C.L.R. tence of a layperson). In this case, the lawyer’s payment (2d) 26). should be deducted from the personal representative’s remuneration. The personal representative’s personal [§17.03] Lawyer’s Services liability exists even if the assets of the estate are insufficient to fully indemnify the personal representative for A lawyer’s range of services could include any or all of legal fees properly charged. the following: The legal costs incurred by the personal representative 1. Services Relating to Non-Estate Assets may be approved by the residuary beneficiaries; otherwise, a determination of whether the expenses were rea- These services could include life insurance being sonably and property incurred will be made when the paid to a named beneficiary or joint property being personal representative passes their accounts (Braich transmitted to the surviving joint tenant. In such a Estate, 2017 BCSC 1140 at paras. 51 and 62). If there is case, the lawyer’s fees for these services are not a a shortfall between the lawyer’s account and what a proper expense for which the personal representa- court determines to be appropriate legal costs to be paid tive may claim indemnification from the estate be- by the estate, the personal representative will be person- cause the estate obtains no benefit from these ser- ally liable for the difference (Braich Estate and Feth (Es- vices. tate of), 2014 BCSC 970 at para. 65). A personal representative is not to be indemnified When the lawyer also acts in the capacity of personal from the estate for legal costs where the lawyer acts representative, the lawyer cannot be paid for legal for the personal representative as a beneficiary of services rendered in the administration of the estate the estate, rather than in their capacity as the personal representative. See Re Wilcox Estate, 2005 BCSC 83 where the court held the executor- 1 Updated by Hugh S. McLellan of McLellan Herbert in March beneficiary could not seek indemnity for legal costs 2021. Previously updated by Denese Espeut-Post (2018 and associated with a wills variation proceeding as the 2019); PLTC (2016); Kirsten H. Jenkins and Raphael Tachie (2014); Kirsten H. Jenkins (2005 and 2006); and Gary J. Wilson legal services were rendered on behalf of the (1995 and 1996). personal representative as a beneficiary rather than

Wills 117 as a personal representative. See also Doucette v. review of the legal account under the Legal Professions Clarke, 2008 BCSC 506, for a discussion of the role Act. Alternatively, the lawyer may agree to reduce the of executors in wills variation proceedings. account to the moderated amount. The procedure for reviewing a lawyer’s bill is set out 2. Responsibilities of the Personal Representative under s. 70 of the Legal Profession Act, S.B.C. 1998, Such services might include locating the will, c. 9 and Rule 14-1 of the Supreme Court Civil Rules. arranging the funeral, ascertaining the names and Residual beneficiaries may insist that a lawyer’s bill be addresses of beneficiaries and creditors, collecting reviewed if the personal representative seeks to be in- assets, paying off debts, distributing assets and demnified for the bill out of the estate. rendering accounts. Fees paid to the lawyer for As noted earlier, the reasonableness of a lawyer’s fee is doing work that the personal representative could determined by criteria set out in Supreme Court Civil have done should be borne by the personal Rule 14-1(3). These criteria are as follows: representative and not charged against the estate as a disbursement of the personal representative. (a) the complexity of the proceeding and the difficulty or novelty of the issues involved; A lawyer may charge fees for this type of work either on a time basis (at the lawyer’s hourly rate), (b) the skill, specialized knowledge and responsibil- or as a portion of the fee to which the personal ity required of the lawyer; representative would be entitled if the personal (c) the amount involved in the proceeding; representative had done the work. The personal representative should bear the fees for this type of (d) the time reasonably expended in conducting the work. In practice, the estate pays the lawyer’s bill proceedings; and the portion of the bill that relates to work of the (e) the conduct of any party that tended to shorten, personal representative is taken into account or set or to unnecessarily lengthen the duration of the off against the personal representative’s proceeding; remuneration. (f) the importance of the proceeding to the party 3. Legal Services whose bill has been assessed and the result obtained; and These include reviewing the will and advising on its provisions, advertising for creditors, searching the (g) the benefit to the party whose bill is being as- title of assets, preparing all documentation neces- sessed of the services rendered by the lawyer. sary to obtain probate or letters of administration, In addition to fees claimed on an assessment, the transmitting and transferring assets, and passing ac- registrar will also allow a reasonable amount for counts. Reasonably and properly incurred fees for expenses and disbursements necessarily or properly legal services are payable from the estate. incurred (Supreme Court Civil Rule 14-1(5)). [§17.04] Assessment of Account [§17.05] Further Reading In preparing their account, the lawyer should distinguish work that relates to the personal representative’s respon- A detailed discussion of lawyer remuneration is found in sibilities from true legal services, so the personal repre- Chapter 18 of British Columbia Probate and Estate sentative can be indemnified solely for legal costs Administration Practice Manual (Vancouver: CLEBC). properly incurred. Alternatively, a lawyer can prepare two separate bills. Accounts are usually in the form of lump sum bills that contain a description of the nature of the services and the matters performed which would permit a client to ascertain the reasonableness of the charges incurred. As part of a formal passing of accounts, the registrar conducting the hearing may “moderate” the legal account if it is put in issue by a beneficiary. However, even if the registrar moderates the legal account and thereby reduces the amount to be paid by the estate, a personal representative may still be personally responsible for the full amount of the legal account. A lawyer advising a personal representative should inform the personal representative that they can avoid this situation by seeking a

Wills 118 A person who is not entitled to notice of an Chapter 18 application under Rule 25-2 may file a notice of dispute if they obtain a court order permitting the filing by showing that, unless they are included in Probate Proceedings1 the class of persons entitled to notice, they or another person or the estate would be prejudiced (SCCR 25-2(14)). See also Re Dow Estate, 2015 BCSC 292 (Master). [§18.01] Introduction A notice of dispute, once filed, prevents the issu- This chapter discusses various probate procedures and ance of an estate grant and the resealing of a foreign actions. It is divided into two parts: grant (SCCR 25-10(8)). (a) before grant: notice of disputes, citations, curing A person entitled to file a notice of dispute may on- of deficiencies and proof in solemn form; and ly do so once (SCCR 25-10(2)). A notice of dispute may be amended once without leave of the court. (b) after grant: citations, curing of deficiencies and Any further amendments require a court order revocation of grant. (SCCR 25-10(4), using SCCR 6-1(2) and (3)). This chapter uses the terminology and procedure man- A notice of dispute must be in Form P29. The per- dated by the Supreme Court Civil Rules (“SCCR”). son filing the notice of dispute (the “disputant”) Be aware that if there is a dispute over the will or estate must declare in the notice of dispute the address for of an Indigenous person, a completely different regime service of the disputant, which address for service governed by the Indian Act, R.S.C. 1985, c. I-5 may ap- must be an accessible address that complies with ply. For more detail, see the British Columbia Probate SCCR 4-1, and must disclose that the disputant is a and Estate Administration Practice Manual (Vancouver: person to whom documents have been or are to be CLEBC), Chapter 21. delivered under SCCR 25-2(2), and the grounds on which notice of dispute is filed (SCCR 25-10(3)). [§18.02] Actions and Procedures Before the The court may renew a notice of dispute before or Grant after it expires (SCCR 25-(6)). A disputant must give notice of an application to renew a notice of 1. Notice of Dispute dispute to an applicant for the an estate grant or re- Section 106 of the Wills Estates and Succession sealing, any other person who has filed a notice of Act, S.B.C. 2009, c. 13 (“WESA”) allows a person dispute, and any other person to whom the court di- to oppose the issuance of a representation grant in rects notice to be given (SCCR 25-10(7)). accordance with the SCCR. A disputant may file a withdrawal of notice of dis- The purpose of the notice of dispute is to oppose the pute in Form P30 (SCCR 25-10(9)). issuance of the grant by the court. For example, a A person who intends to apply for an estate grant or notice of dispute may be filed by the disputant on for the resealing of a foreign grant, or who claims the grounds that the will being submitted for pro- an interest in an estate with respect to which a no- bate is invalid, incomplete or the applicant for the tice of dispute has been filed, may apply, on notice grant is not the proper person. to the disputant, for an order removing the notice of A person who is entitled to notice of an application dispute (SCCR 25-10(10)). The court may remove a for an estate grant or resealing of a foreign grant notice of dispute if it determines that the filing is under Rule 25-2 may file a notice of dispute after not in the best interests of the estate (SCCR death, but before the earlier of i) the issuance of an 25-10(11)). The phrase, “in the best interests of the authorization to obtain estate information or estate” will likely need judicial interpretation. resealing information and ii) the issuance of an A notice of dispute expires after one year from the estate grant, an authorization or resealing a foreign date of filing unless: grant. An estate grant includes a grant of probate, a grant of administration, and ancillary grant of (a) the court renews it; probate or administration (SCCR 25-1(1)). (b) the notice is withdrawn;

(c) the will is proved in solemn form; or 1 Updated by Deidre J. Herbert of McLellan Herbert in March (d) the court orders the notice of dispute 2021. Previously updated by Denese Espeut-Post (2018 and 2019); PLTC (2016); Kirsten H. Jenkins and Raphael Tachie removed (SCCR 25-10(12)). (2014); Kirsten H. Jenkins (2005 and 2006); and Jane D. Dardi (1997–2001). Reviewed in January 2002 by Roger D. Lee for content relating to the Indian Act. Wills 119 When the deceased has a will, if the intended appli- tation or within any longer period allowed by the cant for an estate grant or person claiming an inter- court (SCCR 25-11(5)). est in the estate cannot convince the disputant to When there is a deemed renunciation of the right to withdraw the notice or persuade the court to remove apply for probate, a citor or another person interest- it, then they will have to apply to prove the will in ed in the estate, may apply for a grant of probate or solemn form. a grant of administration with will annexed in place of the person named as executor; an order curing 2. Citations to Apply for Probate deficiencies in the testamentary document; an order When the person named as an executor in a testa- that the testamentary document is a will proved in mentary document fails to apply for probate, any solemn form; or the issuance of a subpoena for the person interested in the estate may serve a citation filing of the testamentary document if in the pos- in Form P32 on the executor to require the executor session of the cited person. (SCCR 25-11(6)). to apply for a grant of probate in relation to the testamentary document (SCCR 25-11(1)). The citation 3. Subpoena for Testamentary Document or must identify the testament document in question. Grant Each alternate executor must also be served if an Under SCCR 25-12, a person may apply by event occurs that entitles the alternate executor to requisition (Form P35), supported by affidavit, for a assume the office of an executor (SCCR 25-11(2)). subpoena (Form P37) requiring a person to deliver A person who is served with a citation must within to the registry one or more of the following: 14 days of service, do one of the following: (a) a testamentary document; (a) if the person has been issued a grant of (b) an authorization to obtain estate or reseal- probate, then serve a copy of the grant to ing information; the citor by ordinary service (SCCR 25-11(4)(a)); (c) an estate, foreign or resealed foreign grant; and (b) if the person has yet to be issued a grant of probate: (d) a certified or notarial copy of such a document. (i) and has filed a submission for estate grant, then serve a copy of the filed Before applying, the applicant must have asked the submission for estate grant to the citor person to whom the subpoena is to be addressed to by ordinary service (SCCR provide the document sought. If the registrar is sat- 25-11(4)(b)(i)); isfied that the document is required for a matter under SCCR Part 25 (“Estates”), and that the person (ii) and has not filed a submission for cited has failed to comply with the applicant’s re- estate grant, but has delivered a notice quest for production, the registrar may issue the of intended application for an estate subpoena. The person cited in the subpoena must, grant in accordance with 25-2(1) that within 14 days of service of the subpoena (the time the cited person intends to pursue, then limit set in Form P37), deliver to the registrar the the notice of intended application and document or an affidavit indicating that the docu- other documents must be served on the ment is not in the person’s possession or control citor by ordinary service (SCCR and what knowledge the person has respecting the 25-11(4)(b)(ii)); document. (iii) or has not taken any step in relation to If the person cited in the subpoena and personally the estate, then serve on the citor by served with it fails to comply, the court may issue a ordinary service, an answer in warrant for the person’s arrest (SCCR 25-12(6)). Form P33 stating the cited person will apply for a grant of probate or refuses A person served with a subpoena issued under to apply for a grant of probate (SCCR SCCR 25-12 may apply to have it set aside on 25-11(4)(b)(iii)). grounds that it is unnecessary or that compliance would work a hardship on the person (SCCR A cited person is deemed to have renounced their 25-12(8)). executorship in relation to the testamentary document if they (a) serve an answer stating that they re- 4. WESA, s. 123 fuse to apply for a grant of probate; (b) do not comply with the service requirements set out in SCCR Section 123(1) of WESA provides that the court 25-11(4); or (c) do not obtain a grant of probate may order a person having control or possession of within six months after the date of service of the ci- the following to produce and bring all or any of them to the court or to a place directed by the court:

Wills 120 (a) a testamentary instrument or purported The court, if so satisfied, may order that the record testamentary instrument, including a record or document is fully effective as the deceased’s as defined in s. 58(1) (court order curing (a) will; deficiencies); (b) revocation, alteration or revival of a will; or (b) a document relating to an estate; (c) testamentary intention. (c) property belonging to an estate; and Section 58 of WESA does not mandate a minimum (d) a representation grant. level of compliance with testamentary formalities. The court may also order that a person who is rea- The main issue in such an application is whether the sonably believed to have knowledge of the docu- record, document, writing or marking was intended ments or property referred to above attend for ex- to have testamentary effect. See Re Young Estate, amination (WESA, s. 123(2)). 2015 BCSC 182 for a description of factors considered in assessing testamentary intent. The burden of WESA s. 123 has a broader, less specific, ambit proof in establishing that a non-compliant document than SCCR 25-12. If the subpoena process under reflects the deceased’s testamentary intentions is a SCCR 25-12 cannot be used to produce a docu- balance of probabilities. The approach in Re Young ment, or if production of estate property is Estate was cited with approval by the BC Court of sought, applying under WESA s. 123 pursuant to Appeal in Re Hadley Estate, 2017 BCCA 311. SCCR Part 8 or SCCR 25-14(1) may succeed. In Re Mace Estate, 2018 BCSC 1284, a testamen- 5. Curing Deficiencies in the Execution, Alteration, tary document that did not comply with the formali- Revocation or Revival of a Will ties was found to embody the maker’s fixed and final intention. In Horton v. Bruce, 2017 BCSC 712, If there are deficiencies in a will or other document a draft will signed by the will-maker was held to be representing the deceased’s testamentary intentions valid for the sole purpose of admitting its revoca- or the intention of the deceased to revoke, alter or tion clause. Section 58 was also used to cure docu- revive a will or testamentary disposition, a person ments in Re Jacobson Estate, 2020 BCSC 1280 and may seek an order under s. 58 of WESA to cure the in Rempel Estate V. Dudley, 2020 BCSC 1766. deficiencies and have the document declared effective as a will, revocation, alteration or revival of the Cases in which drafts or documents were not admit- will or testamentary disposition (see §11.05 for a ted include Re Herod Estate, 2017 BCSC 318 and fuller analysis). Re Bailey Estate, 2016 BCSC 1226. See also Re Quinn Estate, 2018 BCSC 365, in which a “pour- This section gives the court the power to cure for- over” clause which attempted to give the residue of mal defects in the execution, revocation, alteration the will-maker’s estate to a revocable and amenda- or revival of a will. The scope of this dispensation ble inter vivos family trust was not saved by s. 58 power is quite broad, in that it applies to a “record”: because this clause would have permitted the de- that includes data recorded or stored electronically, ceased’s will to be amended without complying can be read by a person and is capable of reproduc- with WESA. This decision was upheld in Quinn Es- tion in visible form. If such a record meets the re- tate v. Rydland, 2019 BCCA 91. See also Waslen- quirements of s. 58 of WESA, an electronic docu- chuk Estate, 2020 BCSC 1929. ment will be considered a valid will or a revocation, alteration or revival of a will. 6. Proof in Solemn Form Such an application is brought pursuant to SCCR When there is a dispute or the potential for a dispute 25-14(2)(c) either by a notice of application or a as to the validity of a will, the will should be proved requisition. in solemn form as opposed to common form. Pro- A court can exercise the power to cure deficiencies bate in common form issues upon the application of if it determines that a record, document, writing or the executor and is supported by affidavit evidence. marking on a will or document represents one of Proof in common form does not conclusively de- these things: termine the will to be the deceased’s last will. (a) the deceased’s testamentary intentions; Proof in solemn form, on the other hand, requires proof of the will in a hearing or trial, after which the (b) the deceased’s intention to revoke, alter or court pronounces for the force and validity of the revive a will or testamentary disposition; or will in solemn form (SCCR 25-1(5)). Notice must (c) the deceased’s intention to revoke, alter or be given to all interested parties. The court must be revive a testamentary disposition contained satisfied, upon the evidence, that the will-maker in a document other than a will. knew and approved of the contents of the will and had testamentary capacity, and also that the will

Wills 121 was properly executed. A will may be proved in (a) a later will is discovered; or solemn form by notice of application if there is an (b) the grant pronouncing for the force and va- existing proceeding within which it is appropriate to lidity of the will was obtained by fraud. seek that order under SCCR 25-14(4). If there is no proceeding that exists at the time, a will may be An action for revocation of administration could be proved in solemn form by commencing a proceed- commenced after a grant of letters of administration ing by petition under SCCR 16-1. has issued in two situations: A grant of probate of a will proved in common form (a) when it is alleged that administration was can subsequently be revoked if, for example, the granted to a person who does not have suffi- will is shown to be invalid. It might be invalid if it cient entitlement to the grant; and was not properly signed or contains another formal (b) on discovery of a will. defect, or because the will-maker lacked testamentary capacity or was the victim of undue influence, A grant of probate or of letters of administration among other reasons. When a will has been proved may be revoked when a grant properly made has in solemn form, it generally is protected by the doc- subsequently become ineffective or when the grant, trine of res judicata from attack in subsequent legal if allowed to subsist, would prevent the proper ad- proceedings. That means the grant cannot be later ministration of the estate. These circumstances set aside, unless it is shown that it was obtained by arise, for example, as follows: fraud, or a later will is found. A will proved in (a) a grantee has disappeared leaving the estate common form is not so protected. unadministered; or The executor under the will, or any person taking a (b) a grant has issued by mistake after the benefit under the will, has standing to commence a grantee, having applied for the grant, died proceeding. However, if a person’s only interest is before it was sealed by the court. to invalidate the will, the person is unlikely to commence a proceeding for proof in solemn form The person applying for revocation of an estate of a will; there are other procedures available. grant must satisfy the following conditions (SCCR 25-5(5)): [§18.03] Actions and Procedures After the Grant (a) If the person applying for the revocation is the person to whom the grant was issued, concurrently with filing the notice of appli- A grant of probate or letters of administration may have cation, that person must provide the regis- to be replaced if the grantee dies, goes missing, or be- try with the original of the document and comes incapacitated, or if facts come to light that indi- all certified and notarial copies of it. The cate that the earlier grant was made in error. When person must also not act under the grant un- events after the grant make it impossible to complete the til the application is decided. administration, the solution may take the form of an action for revocation of grant or, if the grantee has died, an (b) If the person applying for the revocation is application for a grant to complete an unadministered not the person to whom the estate grant was estate, formerly known as “administration de bonis non” issued, the person who has possession or (see Chapter 10, §10.06(4)(f)). If the problem is that the control of that document must file it within original grant was in error, an action for revocation of seven days after being served with the no- grant is probably inevitable. tice of application for the revocation. That person must not act under the estate grant 1. Revocation Applications without leave of the registrar until the application is decided. One relatively common contentious matter arising out of events after a grant is a beneficiary’s allega- The registrar has the discretion to grant leave to the tion that the grantee is guilty of misconduct in the person to whom the estate grant was issued to act administration of the estate. Usually the most ap- under the grant before the revocation application is propriate course is for the beneficiary to apply to decided if the registrar is satisfied that the harm that the court to have the grantee removed as trustee and will occur if leave is granted is less than the harm to have a judicial trustee appointed under s. 97 of that will occur if leave is not granted the Trustee Act, S.B.C. 1996, c. 464. (SCCR 25-5(6)(b)). In order to apply for leave, the person must file a requisition in Form 17 and affi- When the existing grant was obtained after proof in davit or other evidence in support of the request solemn form, an action for revocation of grant is (SCCR 25-5(6)(a)). only available in restricted circumstances, including the following: If revoked, that authority to act passes as if the person had never been appointed executor (WESA,

Wills 122 s. 141). A former personal representative must give a new personal representative all property and records relating to the estate and administration in their possession or control within 30 days of the order of substitution, and sign all documents necessary for the administration of the estate. A failure to sign any document will not affect vesting of the estate in the new personal representative (WESA, s. 161).

2. Rectification Under s. 59 of WESA, if a will fails to give effect to the will-maker’s intention because of an accidental slip or omission, a misunderstanding of the instructions or a failure to carry out the instructions, the court may rectify the will no later than 180 days after the representation grant is issued unless the court grants leave to make an application after that date (see §11.02 and §11.03). An application under s. 59 of WESA for rectification can occur either before the representation grant is issued while the court sits as a court of probate, or after the grant is issued while the court sits as a court of construction. See Conner Estate v. Worthing, 2020 BCSC 150. This section applies to a will that must be a valid will. A purported testamentary document that does not comply with the formalities of WESA would need to be addressed under an application under s. 58 for curing deficiencies, not s. 59 for rectification. If a personal representative distributes an estate after 180 days have passed from the issuance of the representation grant, and part of that estate is later impacted by a rectification order, and the personal representative reasonably relied on the will and did not receive notice of the rectification application before distributing, the personal representative will not be liable (WESA, s. 59(4)). However, if the rectification finds that a person is entitled to a part of the estate that was distributed to another beneficiary, the person entitled under the rectification may still recover any part of the estate that was distributed by the personal representative to other beneficiaries (WESA, s. 59(5)).

Wills

123 Chapter 19 [§19.02] Jurisdiction A number of conditions must be satisfied before the court has jurisdiction to make an order under s. 60 of Variation of Wills1 WESA. 1. Requirements [§19.01] Introduction (a) A Valid Will The first condition precedent to the court’s ju- This chapter deals with applications to vary a will under risdiction is that a valid will must exist (Ham- Part 4, Division 6–Variation of Wills in the Wills, mond v. Hammond, 1995 CanLII 1597 Estates and Succession Act, S.B.C. 2009, c. 13 (B.C.S.C.)). If from a construction of the will it (“WESA”). All statute references in this chapter are to is possible that there may be an intestacy as to WESA unless otherwise noted. any part of the estate, the proper course is to In particular, this chapter discusses ss. 60 to 72, which have the will construed by the court before pro- replace the Wills Variation Act, R.S.B.C. 1986, c. 490 ceeding with an action under WESA (although, (the “WVA”). Sections 60 to 72 incorporate substantially given the short limitation period, a proceeding the same terms as the WVA, with some important proce- would likely be combined, at the very least). dural changes. The common law principles and the Section 1 of WESA defines a “will” under the commentary established under the WVA still apply. Act as meaning any of the following: Under WESA, a spouse or child may commence an ac- (a) a will; tion, within 180 days from the date of the representation grant, if the spouse or child feels that the will does not (b) a testament; adequately provide for the spouse or child’s proper (c) a codicil; maintenance and support. (d) an appointment by will or by writing in Section 60 of WESA provides: the nature of a will in exercise of a power; Despite any law or enactment to the contrary, if (e) anything ordered to be effective as a will a will-maker dies leaving a will that does not, in under s. 58 [court order curing the court’s opinion, make adequate provision deficiencies]; or for the proper maintenance and support of the will-maker’s spouse or children, the court may, (f) any other testamentary disposition except in a proceeding by or on behalf of the spouse or the following: children, order that the provision that it thinks (i) a designation under WESA Part 5 adequate, just and equitable in the circumstanc- [Benefit Plans]; es be made out of the will-maker’s estate for the spouse or children. (ii) a designation of a beneficiary under Part 3 [Life Insurance] or Part 4 [Ac- Be aware that if there is a dispute over the will or estate cident and Sickness Insurance] of the of a deceased Indigenous person, a completely different Insurance Act; or regime governed by the Indian Act, R.S.C. 1985, c. I-5 may apply. For more detail, see Chapter 21 in the British (iii) a testamentary disposition governed Columbia Probate and Estate Administration Practice specifically by another enactment or Manual (Vancouver: CLEBC). law of British Columbia or of another jurisdiction in or outside Canada. For more detailed information on wills variation claims, see Chapter 20 of the British Columbia Probate and (b) Qualifying Assets Estate Administration Practice Manual (Vancouver: In general, if the will-maker was domiciled in CLEBC). British Columbia at death, WESA applies to all real property and personal property of the will- maker to which the authority of the courts in British Columbia extends or can be made to ex- 1 Updated by J. Jeffrey Locke of McLellan Herbert in March tend. If the will-maker was domiciled outside 2021. Previously updated by Denese Espeut-Post (2019); Can- British Columbia at death, WESA applies to all dace Cho and Nicole Chang (2018); PLTC (2016); Kirsten H. of the will-maker’s real property within British Jenkins and Raphael Tachie (2014); and Lynn Waterman (annually since March 1995). Reviewed in January 2002 by Roger D. Columbia but not to the will-maker’s personal Lee for content relating to the Indian Act. property.

Wills 124 Assets that are not part of the estate within the  in the case of a marriage-like relation- meaning of s. 60 usually include property held ship, if one or both persons terminate in joint tenancy, assets held in a trust settled in the relationship. the lifetime of the will-maker, pension funds, Separation is an event that causes an interest insurance policies, RRSPs declared to be paya- in family property to arise under the Family ble to designated beneficiaries, and other types Law Act. Therefore, a separated spouse of “benefit plans” as defined in s. 1(1). Howev- (even if not yet divorced) has ceased to be a er, assets that pass outside the estate can be spouse under s. 2(2) of WESA. Judicial considered in an application made under WESA interpretation will be required to assess what in assessing what the will-maker, as a judicious constitutes “termination” of a marriage-like person, would have considered adequate, just relationship under s. 2(2)(b). and equitable for the claimant, and in fixing the amount of the provision to be made (Viberg v. Spouses are not considered to have Viberg, 2009 BCSC 27). Assets may also be separated if, within one year of separation, subject to a s. 60 claim if the plaintiff is alleg- they begin to live together again for the ing a constructive trust: see Chapter 5, §5.05. primary purpose of reconciling, and they continue to live together for one or more (c) Qualified Applicant periods, totalling at least 90 days (s. 2(2.1)). A qualified applicant under s. 60 of WESA is A will-maker can die leaving more than one the spouse or a child of a will-maker. spouse within the meaning of WESA. For The Nisga’a Lisims Government can com- example, a person may be legally married to mence proceedings under WESA for the will of one person, with no intention to separate, a Nisga’a citizen if that will provides for devo- but also live in a marriage-like relationship lution of cultural property (s. 13). with another person. The existence and nature of the other relationships are factors (i) Spouses to consider in assessing the validity of a Whether an applicant in a wills variation marriage-like relationship (Mother 1 v. Solus action qualifies as a spouse depends whether Trust Co., 2019 BCSC 200). the applicant can establish they were The status of a spouse under WESA is fixed married to or lived with the will-maker in a once and for all at the date of the will- marriage-like relationship for at least two maker’s death. Therefore, the spouse’s re- years, and they have not ceased to be a marriage after the will-maker’s death does spouse. not bar a claim under WESA. Section 2 of WESA defines a spouse: A former spouse has no status to apply un- (1) Two persons are spouses of each der WESA. However, a former spouse may other for the purposes of this Act if have a claim under the FLA if marital prop- they were both alive immediately erty was not settled after separation and be- before a relevant time and they fore the deceased spouse’s death. In this sit- were married to each other, or they uation, the surviving former spouse can had lived with each other in a mar- commence an FLA action against the de- riage-like relationship for at least ceased spouse’s estate (Howland Estate v. two years. Sikora, 2015 BCSC 2248). (2) […] (ii) Children (3) A relevant time for the purposes of WESA does not contain a definition of subsection (1) is the date of death of children, and the existing case law defini- one of the persons unless this Act tions apply. The case law establishes that the specifies another time as the rele- following persons do not qualify as “chil- vant time. dren” under WESA: Two persons cease being spouses of each  a stepchild not adopted by the will- other (s. 2(2)) under WESA as follows: maker;  in the case of a marriage, if an event  a child for whom the will-maker stood occurs that causes an interest in family in loco parentis (in the place of a par- property, within the meaning of the ent) but had not adopted (e.g. the child Family Law Act, S.B.C. 2011, c. 25 to of a will-maker’s common-law spouse, arise; or

Wills 125 if the will-maker had not adopted the discretionary matter and the court will consider the child); and merits of the proposed claim (Rodgers v. Rodgers Estate, 2017 BCSC 518).  a birth child of a will-maker adopted by a third party. A copy must also be served on the Public Guardian and Trustee if there are minor children of the will- Section 3(2) of WESA provides that an maker or if the spouse or a child of the will-maker adopted child is not entitled to the estate of is mentally incapable (s. 61(1)(c)). The role of the the person who was their parent before the Public Guardian and Trustee is to ensure the party adoption, except through the will of the pre- under a legal disability has a litigation guardian act- adoption parent. Section 3(3) provides an ing by counsel. exception: if the spouse of the pre-adoption parent adopts the child, the pre-adoption If the proceeding concerns the will of a Nisga’a cit- parent remains a parent of the child for the izen or a treaty First Nation member, a copy must purposes of succession. Section 3(1) pro- be served on the Nisga’a Lisims Government or the vides that if the relationship of parent and treaty First Nation. child arising from the adoption of a child is in question and must be established for the 2. Parties purposes of succession, such relationship Parties to a proceeding under s. 60 include the sur- must be determined in accordance with the viving spouse, children, all beneficiaries whose in- Adoption Act, R.S.B.C. 1996, c. 5. terest may be affected, the executor, and any other 2. Forum person the court may order are parties (SCCR 21-6(2)). The court that has jurisdiction to make an award under WESA is the Supreme Court of British Co- If the applicant is under a legal disability, the pro- lumbia (WESA, s. 1(1)). A proceeding can be com- ceeding must be commenced by the applicant’s liti- menced in any registry of the Supreme Court in the gation guardian. province; it does not have to be commenced in the The court has jurisdiction to make an award to per- registry in which probate was granted. sons who made no claim for relief but who are included in the proceeding as a party and have status 3. Limitation Period under WESA to seek an award pursuant to s. 61 of A proceeding for the variation of a will must be WESA (Tomlyn v. Kennedy, 2008 BCSC 331). commenced within 180 days from the date the representation grant is issued (s. 61(1)(a)). “Issued” re- 3. Representative Actions fers to when the grant is entered in the court regis- Section 60 of WESA states that a proceeding may be try. There is no provision in WESA for extension or brought on behalf of the spouse or children. This suspension of this time limit. contemplates situations where persons entitled to The commencement of an action by one claimant is bring actions in their own names are for some rea- deemed to be a proceeding on behalf of all who son unable to do so (for example, as a result of in- may apply, so far as limitation periods are fancy or a mental disorder). concerned (s. 61(4)). In other words, once an action A litigation guardian may bring an application on has been commenced in time by one claimant, the behalf of an applicant who is under legal disability limitation period for claims by other claimants is (Re Wong Estate, 2007 BCSC 1189). Proceedings eliminated. may also be brought on behalf of persons who have [§19.03] Procedure died before or during the course of the proceedings (Currie Estate v. Bowen (1989), 35 B.C.L.R. (2d) 46 (S.C.)). 1. Commencement and Service Supreme Court Civil Rule 21-6(1) provides that a 4. Special Considerations With Respect to Land proceeding under s. 60 of WESA must be com- Sections 61(5), 68, 69, and 70 of WESA contain menced by a notice of civil claim. All further pro- special provisions with respect to land in BC. ceedings will follow the usual procedure set out in the Supreme Court Civil Rules (SCCR 21-6(4)). Under s. 61(5), a plaintiff in an action may register a certificate of pending litigation in the Land Title The executor must be a party to the proceeding. A Office within 10 days of the issue of the initiating copy of the notice of civil claim must be served on pleading. the executor not later than 30 days after the expiration of the limitation period unless the court grants Under s. 69(1), if real property is transferred to a a time extension (s. 61(1)(b)). An extension is a beneficiary within the 210-day period referred to in

Wills 126 s. 155 of WESA, title to the property cannot be reg- Where the existence, execution, contents or validity istered in the Land Title Office without either the of a will are at issue, the lawyer who took the in- approval of the court or the consents of beneficiar- structions and prepared the will is compellable to ies entitled under the will to consent. A registration give evidence about the instructions they received under s. 69(1) is “subject to the liability of being from the will-maker. When the will-maker’s true in- subject to an order under [Division 6]” (i.e. the reg- tentions are at issue, there is an exception to the istration could still be subject to a wills variation general rule that solicitor-client privilege continues claim) (s. 69(2)). after a client’s death (Gordan v. Gilroy, 1994 Can- LII 829 (B.C.S.C.)). 5. Settlement 7. The Order and Costs A consent order cannot be obtained under WESA because relief is a matter for the discretion of the The court may order a lump sum, a periodic or oth- judge. However, when all interests are vested and er payment, a transfer of property, or the establish- all parties are sui juris, the parties may enter into a ment of a trust in favour of the will-maker’s spouse settlement agreement and enter a consent dismissal or children (s. 64). order dismissing the action as if heard on its merits. The court may also order, in whole or in part, the The effect of the consent dismissal order is that the suspension of the administration of the will-maker’s will is not varied, but the distribution of the estate is estate (s. 66). Current case law indicates that a vari- carried out pursuant to the terms of the settlement ation order must be in final form, except possibly as agreement. to costs. When all interests are not vested or some party is a For how orders and costs are dealt with under WE- minor or under a disability, then the terms of the SA and how the burden of payment of an order falls settlement will require approval from the court, of- on the estate, see ss. 66, 67, and 71, and on the ten with input from the Public Guardian and Trus- question of costs, see SCCR 14-1(9), 14-1(15), and tee’s office. In this case, the parties must satisfy the 14-1(16). The general rule is that costs follow the court that there is a reasonable basis for the exercise event in wills variation matters (Vielbig v. Water- of the court’s discretion to make the order in ac- land Estate (1995), 6 E.T.R. (2d) 1 (B.C.C.A.); Hall cordance with the settlement (Behnke v. Behnke Es- v. Picketts, 2007 BCSC 1278, affirmed 2009 BCCA tate, 1994 CanLII 2334 (B.C.S.C.)). A court may 329). However, in several wills variation cases the refuse to make an order in accordance with the set- court did not follow the general rule and ordered tlement agreement if the court is not satisfied that that the parties’ costs be paid out of the estate on this test has been met. the basis that the executor was obliged to defend the Any party to a Supreme Court proceeding may re- will and the parties were drawn into the action by quire other parties to attend a mediation session un- the provisions of the will (Wilcox v. Wilcox, 2000 der the Notice to Mediate process (Notice to Medi- BCCA 491; Mazur v. Berg, 2010 BCSC 109) or on ate (General) Regulation, B.C. Reg. 4/2001). Medi- the basis that the cause of the dispute stemmed from ation in WESA proceedings in which all interests are the will-maker’s actions (Griffin v. Canada Trust, not vested, or in which some party is a minor or un- [1995] B.C.J. No. 2132 (S.C.); Maddess v. Racz, der a disability, is restricted. The results of media- 2009 BCSC 1550). tion in these actions would be subject to court order. Generally, an executor is entitled to receive special costs from the estate because the executor must be a 6. Evidence party to the wills variation proceeding. However, WESA provides that “the court may accept the evi- when the executor is also a beneficiary, the person’s dence it considers proper” of the will-maker’s rea- costs as an executor must be separated from their sons for making the dispositions in the will or for costs as a beneficiary (Wilcox v. Wilcox, 2002 not making adequate provision for the spouse or BCCA 574; Lee v. Lee Estate, 1993 CanLII 2368 children (s. 62(1)). (B.C.S.C.); Doucette v. Clarke, 2008 BCSC 506). Such evidence may include statements made by the 8. Appeals, Variations and Rescissions will-maker during the will-maker’s lifetime or a memorandum that records as objectively as possible Appeals are provided for in WESA under s. 72. A the will-maker’s reasons for disposing of the estate person who believes they were prejudicially affect- in a particular way. An advantage of the memoran- ed by the order may appeal to the BC Court of Ap- dum, as opposed to expressing the reasons in the peal. On appeal, the court will exercise an inde- will, is that it preserves the confidentiality of the pendent discretion and reach its own conclusion, remarks if there is no challenge to the will. but will defer to the trial judge on matters that depend on an assessment of oral testimony.

Wills 127 Variation and rescission of orders are provided for bequests (Hecht v. Hecht Estate (1990), 39 E.T.R. 165 under s. 71. If the court ordered periodic payments, (B.C.S.C.)). or that a lump sum be invested for the benefit of a Throughout the variation proceedings and at the trial of person, the court may inquire at a later date into the the action, the executor should take a neutral position. circumstances of the person in whose favour the or- The executor should be prepared to provide the court der was made to determine if there is a change in with particulars of assets and liabilities or with any other circumstances. In the event of a change of circum- assistance the court may require. The executor should stances, the court may cancel, vary or suspend its neither support nor oppose the provisions of the will. To order or make another other order. save costs, it is not uncommon for the executor and the [§19.04] Role of the Executor executor’s counsel to ask to be excused from the trial of such a proceeding after providing such financial particulars of the estate as are required. Section 61(1)(b) of WESA provides that a proceeding commenced by a person to vary a will must not be heard An executor who wants to bring an action under WESA by the court unless a copy of the notice of civil claim has must step down as executor and should not apply for a been served on the executor. Once the executor has no- grant, because one person cannot be both plaintiff and tice that a proceeding has been commenced or could be defendant in an action under WESA (Berry Estate v. commenced, the executor may proceed with the normal Guaranty Trust, Co. of Canada [1980] 2 S.C.R. 931; duties of an executor, subject to certain restrictions. Harrison v. Harrison (1982), 40 B.C.L.R. 143 (S.C.)).

The executor may pay duties, taxes, debts, and [§19.05] Duty to Make Adequate Provision testamentary expenses (Re Simson, [1949] 2 All E.R. 826 (Ch. D.)). However, the executor is prohibited from 1. Generally distributing the estate within the 210 days following the date of the issue of the representation grant, except by When, in the court’s opinion, the will-maker has order of the court or with the consent of all beneficiaries failed to make adequate provision for the proper and persons entitled to commence a wills variation maintenance and support of a spouse or child, the claim. There is an exception if the executor sets aside court may order the provision be made that it thinks required amounts under s. 155(1.3) to compensate is “adequate, just and equitable” in the circumstanc- potential claimants. es (s. 60). An executor is also prohibited from distributing the The requirement that the provision be “just and eq- estate after the expiry of the 210-day waiting period, uitable” is an important feature of WESA in British without a court order, if (1) proceedings have been Columbia, as that wording is not found in most oth- commenced as to whether a person is a beneficiary or er Canadian jurisdictions that have dependent relief intestate heir; (2) a variation claim has been brought; or legislation. (3) other proceedings have been brought which may The leading authority on the basis upon which the affect distribution (s. 155(2)). court is to determine the extent of a will-maker’s To avoid the possibility of personal liability, the execu- duty to make adequate provision is the Supreme tor should not distribute any of the assets of the estate to Court of Canada’s decision in Tataryn v. Tataryn any beneficiary in the 210 days following the date of the Estate (1994), 93 B.C.L.R. (2d) 145 (S.C.C.). issue of a representation grant, unless all persons who In Tataryn, the court held that if the will does not would be entitled to apply under WESA consent or the make adequate provision for the proper mainte- distribution is authorized by court order (s. 69 and nance and support of a spouse or a child, the court s. 155). may order whatever it thinks to be “adequate, just If an executor distributes any of the estate within the and equitable.” Furthermore, in determining what is 210-day period, or any time thereafter if an action has “adequate, just and equitable,” two societal norms been commenced, and does so without the consent of all must be considered and in the following order of persons who would be entitled to apply under WESA, the significance: executor may be personally liable for any loss resulting  first, the will-maker’s legal obligations to from that distribution. their spouse and children; and The court cannot direct an executor to make a distribu-  second, the will-maker’s moral obligations tion before the executor’s year has expired (Nielsen v. to their spouse and children. Nielsen, [1990] B.C.D. Civ. 4163-02 (S.C.)). A testator’s legal obligations “reflect a clear and The court may authorize payment of legacies or be- unequivocal social expectation, expressed through quests, notwithstanding a pending claim under WESA, society’s elected representatives and the judicial when the risk is remote that the variation order will en- doctrine of its courts” (Tataryn at 821). This croach on the funds needed to satisfy the legacies or

Wills 128 analysis often involves considering what the 2. Factors to Consider testator’s obligations would be, if still living, under The following are factors to consider in determin- the Divorce Act, R.S.C. 1985, c. 3, or the Family ing the will-maker’s legal and moral obligations. Law Act. (a) Standard of Living A testator’s moral obligations are found in “society’s reasonable expectations of what a judicious The standard of living to which the will-maker person would do in the circumstances, by reference has allowed the plaintiff to become accustomed to contemporary community standards” (Tataryn at may influence the degree of a will-maker’s 821). As the court noted in Tataryn, moral obliga- moral obligations: Wilson v. Lougheed, 2010 tions are susceptible to being viewed differently by BCSC 1868. In Wilson v. Lougheed, the court different people. Case law provides guidance. took into account the will-maker’s history of treating the daughter generously, the daughter’s Following Tataryn, the court in Clucas v. Royal financial circumstances, and the competing Trust Corporation of Canada et al., 1999 CanLII spouse’s financial circumstances (the spouse 5519 (B.C.S.C.), enumerated several principles had a net worth of about $32 million). The will with respect to a wills variation claim: was varied to increase the amount received by 1. The main aim of the WVA (now s. 60 of the daughter to $5.5 million from an estate of WESA) is the adequate, just and equitable approximately $19.5 million. provision for the spouse and children of The will-maker cannot lower the plaintiff’s will-makers. standard of living by depriving the plaintiff 2. The will-maker’s testamentary autonomy during the will-maker’s lifetime (Re Berger should be protected and only interfered with (1978), 2 E.T.R. 275 (B.C.S.C.)). insofar as the statute requires. The general principle that the plaintiff should 3. The “adequate provision for the proper continue to be maintained in the manner to maintenance and support” test is an objec- which the plaintiff had become accustomed tive test. must be considered in light of the estate’s ability to meet such a claim, as well as factors such 4. “Adequate” and “proper” can mean different as the size of the estate and the presence of oth- things depending on the size of the estate. A er dependants (Spinney v. Royal Trust Co. small gift may not be adequate if the estate (1973), 19 R.F.L. 191 (N.S.S.C.); Walker v. is large. McDermott, [1931] S.C.R. 94). 5. Examples of circumstances which bring In the case of Sawchuk v. MacKenzie Estate forth a moral duty on the part of a will- (1999), 26 E.T.R. (2d) 193 (B.C.C.A.), the maker to recognize the claims of adult chil- court in increasing the award made by the low- dren are: er court took into consideration the status in life (a) adult child’s disability; (expensive house in a high income neighbour- hood) of the deceased rather than the lifestyle (b) assured or implied expectation arising of the applicant daughter. from the abundance of the estate or from the adult child’s treatment during the (b) Financial Need of the Applicant will-maker’s lifetime; In Tataryn, the Supreme Court of Canada stated (c) present financial circumstances of the that financial need does not have to be proved child; if the claimant can establish that the will-maker owed a legal obligation or a moral obligation to (d) probable future difficulties of the child; the claimant that was not met in the terms of and the will (see also Sawchuk v. MacKenzie Es- (e) the size of the estate and other legitimate tate, supra). claims. While financial need is not essential for a 6. Circumstances that will negate the moral ob- plaintiff to succeed, need is certainly a factor to ligation of a will-maker are “valid and ra- be considered. For example: tional” reasons for disinheritance. Such rea- (i) The court has taken into account not sons must be based on true facts and the rea- only the present financial needs of a son must be logically connected to the act of plaintiff but the future needs (Klingstal disinheritance. v. Arend, [1980] B.C.J. No. 144 (S.C.)).

Wills 129 (ii) The court balanced the relative finan- not been made. In these conditions, the plaintiff cial circumstances of an infant child need not apply to the executor for relief before applicant with that of the surviving invoking the wills variation provisions of the common law spouse in determining legislation (Re Kirk Estate (1963), 42 W.W.R. priorities (B. (K.D.M) v. Taylor, 2008 510 (B.C.S.C.)). BCSC 1498). (d) Applicant’s Country of Domicile (iii) An adopted child with greater financial The adequacy of the will-maker’s provision and health needs than the preferred will generally be determined with regard to a child beneficiary received an award standard appropriate to the applicant’s country equal to the sibling (Laing v. Jarvis Es- of domicile. tate, 2011 BCSC 1082). (e) Disability (iv) The only daughter of the will-maker’s first marriage was held to be entitled to In Woods (Guardian of) v. Woods Estate, 2002 $75,000 of a $435,000 estate, although BCSC 569, the court varied a will in considera- she was married to a dermatologist who tion of the health and mental capacity of the earned a “relatively good income from dependents. However, where a plaintiff adult his practice” (Re Holt (1978), 85 independent child did not establish that her D.L.R. (3d) 543 (B.C.S.C.) at 546). health disabled her from working, the court did not vary a will on the basis of physical disabil- A review of the cases indicates that failure on ity (Gould v. Royal Trust Corp. of Canada, the part of the plaintiff to show need may not 2009 BCSC 1528 at paras. 113 to 116). be fatal when the estate is large and: The court may consider an illness that was not (i) the plaintiff had contributed to its ac- known to the will-maker prior to the will- quisition (Re Sleno (1977), 78 D.L.R. maker’s death and may vary the will for the (3d) 155 (B.C.S.C.)); benefit of the disabled applicant (Re Dunn Es- (ii) the will-maker had preferred one child tate, 1944 CanLII 243 (B.C.S.C.)). over another (Re Tornroos Estate, The current approach of the courts confirms [1976-77] B.C.D. Civ. (S.C.)); that a will-maker’s moral obligation to provide (iii) a second wife or children of a second for a mentally incompetent dependent adult is marriage were preferred over the not negated by the provision of government children of the first marriage (Re Holt care (Newstead v. Newstead Estate, 1996 Can- (1978), 85 D.L.R. (3d) 543 (B.C.S.C.)); LII 564 (B.C.S.C.). However, there have been circumstances where the courts have not made (iv) the will-maker left most of the estate to additional provision for a disabled dependent her brother, with only a small provision adult maintained by the state (Champoise v. for her husband (Hurst v. Benson Prost, 1998 CanLII 15099 (B.C.S.C.)). (1981), 9 E.T.R. 274 (B.C.S.C.)); A will may be varied to create a discretionary (v) persons falling outside the class enu- trust for a disabled applicant, to avoid negative- merated in the wills variation legisla- ly impacting the applicant’s entitlement to gov- tion (grandchildren) were preferred by ernment benefits (A.(S.) v. Metro Vancouver the will-maker (Re Michalson Estate, Housing Corp., 2019 SCC 4). [1973] 1 W.W.R. 560 (B.C.S.C.)); or (f) Factors Specific to Spouses (vi) the will-maker disinherited his only child without adequately weighing the The starting point for considering a testator’s impact of the child’s deteriorating legal obligations to a spouse is often to consider health (Marsh v. Marsh Estate (1997), what the spouse would be entitled to on the 19 E.T.R. (2d) 184 (B.C.S.C.)). breakdown of the spousal relationship under the Divorce Act or the Family Law Act. (c) Restrictive Conditions in the Will The Supreme Court of Canada in Tataryn stat- Support may not be adequate if there are condi- ed that a surviving spouse ought not to be in tions in the will that restrict the surviving any worse position than the spouse would be in spouse’s or child’s access to the support. For had the parties divorced as opposed to one of example, when a dependent is required to rely them dying. Under the Family Law Act, on sep- on an executor’s discretion as to whether to re- aration, each spouse is entitled to half of the sort to the corpus of a life estate, the courts family property and family debt. have generally held that adequate provision has

Wills 130 An analysis of the will-maker’s legal obliga- spouse (B.(K.D.M.) v. Taylor, 2008 BCSC tions to the spouse should be considered at the 1498). However, where sufficient assets are time of a “notional separation” immediately provided to the surviving parent in the will for prior to the testator’s death (Ciarniello v. the proper maintenance and support of the mi- James, 2016 BCSC 1699; Saugestad v. nor child, a court will not vary the will in favor Saugestad, 2006 BCSC 1839). of the minor child (Cameron v. Cameron Es- tate, 1991 CanLII 263 (B.C.S.C.)). In Philp v. Philp Estate, 2017 BCSC 625, the court found the will-maker satisfied her legal The testator’s moral obligation to provide for obligations to her spouse because the estate was independent adult children is more tenuous. worth approximately $667,000 while the plain- Nonetheless, Tataryn states that “if the size of tiff spouse’s assets at the time of the will- the estate permits and in the absence of circum- maker’s death totaled $600,000. In other words, stances which negate the existence of such an the plaintiff spouse had close to half of the fam- obligation, some provision for such children ily assets. should be made” (Tataryn at 823). See also Nulty v. Nulty Estate, 1989 CanLII 244 In Kish v. Sobchak Estate, 2016 BCCA 65, the (B.C.C.A). court considered the plaintiff’s argument that variation should be calculated with reference to McBride v. Voth, 2010 BCSC 443 enumerated a “notional spousal support award” based on six considerations that inform the analysis of a the Spousal Support Advisory Guidelines. The testator’s moral obligations to their independent court made clear at para. 49: adult children. The six considerations are as follows: . . . the analysis of legal obligation need not be a detailed or exact one, 1. Contributions to the estate and reasonably given the difficulty of drawing a direct held expectations on the part of the analogy between the consequences of claimant; a marriage breakdown—which leaves 2. Misconduct or poor character of the both spouses with needs and obliga- claimant; tions—and the death of a spouse…the WVA should not normally become a 3. Estrangement or neglect in the relationship proxy for divorce proceedings, com- between the testator and child; plete with the elaborate features and 4. Gifts and benefits made by the testator special rules applicable to a family law during the testator’s lifetime; trial. 5. Unequal treatment of children; and Rather, the legislation respecting the breakdown of spousal relationships provides guid- 6. The testator’s reasons for disinheritance or ance in assessing a will-maker’s legal obliga- subordinate benefit, which must be valid tions to their spouse. A similar conclusion was and rational. reached in Brown v. Terins Estate, 2016 BCSC For case law examples of how a number of 42. these considerations have been applied to Determining the moral obligation owed to a preclude relief in actions by adult children, see spouse is not as clear as determining the legal §19.06(3), and for case law examples of obligation. A moral obligation to a spouse may contributions to the estate by claimants, see be increased by the length of the marriage, the §19.07(2)(r). efforts of the spouse in caring for the will- See also Dunsdon v. Dunsdon, 2012 B.C.S.C. maker, and the spouse’s contribution to the 1274, for a discussion of further factors which a will-maker’s acquisition of assets. Other factors court may consider in assessing the existence for consideration include the spouse’s age, ca- and strength of a will maker’s moral duty to an reer, and income, and the will-maker’s financial independent adult child. support of the spouse (see Li v. Ellison, 2014 BCSC 501). 3. Relevant Date for Determining Adequacy of (g) Factors Specific to Minor Children and Inde- Support pendent Adult Children The adequacy of the will-maker’s support for that A will-maker owes a legal and moral obligation will-maker’s spouse or children is determined based to provide for minor dependent children. The on the circumstances of the plaintiff at the date of claim of a minor dependent child will take pri- the will-maker’s death, including any reasonably ority over that of a financially independent foreseeable changes in the circumstances of the

Wills 131 spouse or children as at the date of death of the WVA. Absent separation, an agreement cannot will-maker. remove the court’s jurisdiction under WESA. However, the court may consider the terms of [§19.06] Circumstances Precluding Relief the marriage or prenuptial agreement to determine if adequate, just and equitable provisions 1. General have been made by the will-maker (Steernberg v. Steernberg, 2006 BCSC 1672). The court has discretion to refuse relief under WESA. Section 63 provides: In Steernberg, the court considered the significance of a prenuptial agreement in a wills var- The court may iation action. The court noted that a prenuptial (a) attach to an order under this Division any agreement generally contemplates arrange- conditions that it thinks appropriate, or ments on the breakdown of the relationship, while the scope of a wills variation claim is (b) refuse to make an order in favour of a per- broader as it contemplates the circumstances of son whose character or conduct, in the the relationship that would have sustained but court’s opinion, disentitles the person to for the death of the will-maker. the benefit of an order under this Division. This is consistent with the two-part test in Tata- “Character or conduct” refers to the character and ryn, which contemplates both the legal obliga- conduct of the plaintiff before the will-maker’s tions (such as property division on the break- death (Burns v. Burns, [1937] 2 W.W.R. 673 down of a spousal relationship), as well as the (B.C.S.C.), affirmed [1938] 4 D.L.R. 513 (P.C.)). moral obligations of the will-maker (which The plaintiff’s conduct after the death of the will- could take into account the circumstances of the maker is immaterial (Dale v. Crosby, [1981] B.C.D. spousal relationship, including the spouses’ Civ. 4223-08 (S.C.)). standard of living). Once the plaintiff shows that adequate provision Accordingly, a prenuptial agreement cannot bar has not been made in the will, the onus of proving a spouse from making a wills variation claim. disentitling conduct is on the person alleging it (Re However, the terms of the prenuptial agreement Suddaby, [1958] O.W.N. 391 (C.A.)). could be considered in assessing whether adequate, just and equitable provisions have 2. Actions by Spouses been made and whether the will-maker had met A number of principles have emerged in case law their moral obligation to their spouse. The and statute as to bars to relief in actions by spouses. prenuptial agreement could also be used as evidence of the will-maker’s reasons for (a) Duration of Spousal Relationship making the dispositions made in the will. The fact that a spousal relationship is of very (e) Desertion limited duration does not bar a claim under WESA. Rather, it is a circumstance going to the Desertion by the plaintiff was generally consid- quantum of the award. ered to be conduct disentitling the plaintiff from relief under the WVA and will likely continue to (b) Marriage of Convenience be so under WESA. The fact that the marriage was one of convenience does not disentitle the plaintiff spouse. 3. Actions by Children However, in such cases the obligation of the The following factors are relevant to the court’s de- will-maker may be minimal (Montgomery v. termination as to whether the child is disentitled to Flood (1979), 5 E.T.R. 16 (B.C.S.C.)). the benefits of WESA. See also the summary of (c) Adultery McBride v. Voth, supra, in §19.05.2(g). Adultery is not a bar to relief but may be a fac- (a) Misconduct tor taken into consideration. Only the most severe misconduct on the part of (d) Separation a child will disentitle that child from the benefits of WESA. The character or conduct subject A person who ceases to be a spouse under to review is the character or conduct of the s. 2(2) of WESA cannot vary a will under the child at the time of the will-maker’s death wills variation provisions. (McBride v. Voth, 2010 BCSC 443). Marriage and prenuptial agreements often include provisions that one or both parties agree to forego rights under WESA or the former

Wills 132 The following circumstances constituted such children when determining the moral obliga- misconduct under the WVA and warranted tion. disinheritance: Adult children are not generally disentitled to (i) a son provided no explanation of his ina- relief under WESA by reason of the fact that bility to save money (Dech v. Ewan Estate, they have been estranged from the will-maker 2003 BCSC 1585); for an extended period of time and have never been financially dependent on the will-maker. (ii) a son became belligerent towards the par- In Pattie v. Standal Estate (1997), 20 E.T.R. ents, culminating in the father punching (2d) 192 (B.C.S.C.), the son had been three the son in the mouth and the son having no years old when his parents separated, his moth- subsequent contact with his parents (Kelly er had the right to apply for maintenance but v. Baker (1996), 15 E.T.R. 2(d) never did, the son had no contact with the will- (B.C.C.A)); maker, his father, from the age of seven when (iii) a daughter had sued the will-maker after mother and son moved to Alberta, he later the death of her father in an attempt to changed his name, and he was an independent deny the will-maker’s inheritance of her adult at the time of the application to vary. The husband’s estate (Gieni v. Richardson Supreme Court held that no special circum- Estate, 1995 CanLII 400 (B.C.S.C.); stances existed to displace the parent’s moral obligation to provide for his child. However, in (iv) a daughter was verbally abusive, and had Hall v. Hall, 2011 BCCA 354, the court found effectively prevented her two siblings from that a lengthy and serial estrangement that was inheriting anything from their father’s es- not the fault of the will-maker did not give rise tate by using substantially all of the fa- to a moral obligation to provide for the es- ther’s estate to purchase a property in her tranged adult child. sole name (LeVierge v. Whieldon Estate, 2010 BCSC 1462); and The will-maker’s neglect of a child may be relevant in determining whether a moral duty is (v) daughters had sought restraining orders owed to the child (Gray v. Nantel, 2002 BCCA against the will-maker to block access to 94). An estrangement between a parent and the grandchildren (Persall v. Stromberg, child that was the joint responsibility of both 2015 BCSC 1826). parties is also a relevant consideration that may The following circumstances did not constitute result in a variation if the child is disinherited such misconduct under the WVA to warrant dis- or left a nominal amount of the estate (Doucette inheritance: v. Clarke, 2007 B.C.S.C. 1021 (varied on other grounds but affirmed on this point in Doucette (i) a daughter had separated from her hus- v. McInnes, 2009 BCCA 393)). band and was living in a common law relationship (Re Fornataro Estate, When the relationship between a will-maker [1976-77] B.C.D. Civ.-Test. Main. and the will-maker’s children is an unhappy (S.C.)); one, the children may be disentitled to relief if their conduct has been the cause of the break- (ii) a daughter was a disappointment and down in relations: see e.g. Bell v. Roy, supra. allegedly took objects from the home But see Re Harding, [1973] 6 W.W.R. 229 of the will-maker (Sawchuk v. Mac- (B.C.S.C.). Kenzie Estate (1998), 24 E.T.R. 2(d) 66 (B.C.S.C.), appeal allowed as to quan- Even when the children are shown to have ne- tum, 2000 BCCA 10); glected the will-maker for a number of years, such treatment must be considered in the light (iii) a daughter hated and neglected her of the will-maker’s previous neglect of the mother (Re Stewart (1961), 31 D.L.R. children, and it may not disentitle them to an (2d) 601 (B.C.S.C.); and award (Re Osland (1977), 1 E.T.R. 128 (iv) a son was an irresponsible spendthrift (B.C.S.C.); Re Magdell Estate, [1978] B.C.D. (Re Bailey Estate, [1972] 1 W.W.R. 99 Civ. (S.C.)); Rampling v. Nootebas (2003), 4 (B.C.S.C.), affirmed [1972] 3 W.W.R. E.T.R. (3d) 86). In a situation where a will- 640 (B.C.C.A.). maker was estranged from his children because his ex-wife, at the time of divorce, stated that (b) Estrangement in the Relationship or Neglect by the will-maker could not see his children, the the Will-Maker court found that there was nothing in the cir- The court may consider the relationship be- cumstances that gave rise to a moral duty of the tween the will-maker and the will-maker’s

Wills 133 will-maker to his children (Price v. Lypchuk appeal, held that the stated reasons for the Estate, 1987 CanLII 165 (B.C.C.A.). deceased having disinherited the daughter were solidly based on the facts and were not While WESA is not intended as a means to unreasonable or irrational. Furthermore, the compensate for family abuse, where a parent estate was small and there was no evidence that has treated a child unfairly, judicious parents either the daughter or the beneficiary was in would recognize a moral obligation to make need. It was appropriate and within the amends through provisions in their wills and, if discretion of a judicious parent for the deceased it is not done, the court may vary the will to do to have left his estate to a companion, who had so (Doucette v. McInnes, 2009 BCCA 393). provided him with companionship and comfort. In decisions under the WVA, children have been However, for a case in which the will-maker’s entitled to claim in the following circumstanc- reasons for disinheritance were found to not be es: valid or rational, see Ryan v. Delahaye Estate (i) the will-maker and her son were es- (2003), 2 E.T.R. (3d) 107. The will-maker tranged because she disliked his wife mother in this case set out clear reasons for (Nulty v. Nulty Estate (1988), 29 E.T.R. providing unequally for her adult children, stat- 149 (B.C.S.C.)) or disapproved of his ing that the son had been of great assistance to wife’s ethnic background (Lowres v. her, while the daughter seldom visited. She also Lowres (1984), 17 E.T.R. 281 stated that the daughter had received a legacy (B.C.S.C.)); from the grandmother, who had raised the daughter and for whom the daughter had cared (ii) a will-maker transferred his animosity until she died. Smith J. held that while the toward his first wife to a daughter of mother had given reasons for the unequal dis- that marriage (Re Holt (1978), 85 tribution the reasons were inaccurate and there- D.L.R. (3d) 543 (B.C.S.C.)); fore were not valid and rational at the time of (iii) a will-maker disinherited her son as a the mother’s death. The parents had provided result of unfounded suspicions as to his some compensation to the son for his devotion handling of his father’s estate in his ca- during their lives. Both children were of great pacity as executor (Re Preston Estate, assistance to the parents. It was not possible to [1974] B.C.D. Civ.); and quantify each of their contributions. Given the size of the estate, the daughter was not ade- (iv) an alcoholic mother terminated quately provided for. The unequal distribution relations with her daughter when she did not provide for the proper maintenance and refused to drink with her (Re Cater support of the daughter. An adequate, just and Estate, [1976-77] B.C.D. Civ. (S.C.)). equitable distribution was to give the daughter (c) The Will-Maker’s Reason for Disinheritance an equal share of the residue of the estate. The will-maker’s reason for disinheritance must [§19.07] Determination of Quantum be “valid and rational” (Clucas, supra). “Valid” means that the reasons must be based on true 1. General facts and “rational” means that the facts must be logically connected to the act of The court in Walker v. McDermott, [1931] S.C.R. disinheritance. The reasons need not be morally 94 at 96 states: justifiable (Kelly v. Baker, 1996 CanLII 1596 If the court comes to the decision that adequate (B.C.C.A.)). provision has not been made, then the court A will-maker can disinherit a child for good must consider what provision would be not only cause. See Bell v. Roy, supra, in which the will- adequate, but just and equitable also. maker left her estate to only one of three adult This underscores an important feature of WESA— children. One of the disinherited children chal- the requirement that the provision be just and equi- lenged the will, although she was in no appar- table. Statements from other jurisdictions must be ent financial need. On the other hand, the son treated with caution, as the role of the courts in each who was the beneficiary had a history of unem- jurisdiction depends on the wording of the relevant ployment. The Court of Appeal unanimously legislation. upheld the trial judge’s ruling that the daughter’s claim be dismissed. Regardless of the particular jurisdiction, however, the task of fixing an appropriate amount is a highly See also Berger v. Clark, 1999 CanLII 3239 discretionary matter involving consideration of a (B.C.S.C.), aff’d. [1999] B.C.J. No. 2904 variety of circumstances. (C.A.). The Court of Appeal, in dismissing the

Wills 134 2. Relevant Factors to Consider In the case of a widow, the court in Re Lawther Estate, [1947] 1 W.W.R. 577 at 587 (Man. (a) Application of Family Law Act K.B.), held that quantum may be affected by In light of Tataryn, the surviving spouse’s enti- “the kind of maintenance to which she had been tlement under the FLA, had there been a separa- accustomed during the life of the testator, or to tion rather than a death, is relevant in consider- which she would have been accustomed if her ing the will-maker’s legal obligations to the husband had then done his duty to her.” surviving spouse. (e) Gifts by the Will-Maker Outside the Will (b) The Size of the Will-Maker’s Estate In determining quantum, the court may consid- This factor takes on greatest significance when er inter vivos benefits that the will-maker has the plaintiff is unable to show financial need. made to an applicant and other beneficiaries or those that pass by the operation of law at the There are a number of “small estate” cases in- time of death outside of the will, including as- volving the competing claims of the will- sets held in joint tenancy and assets for which maker’s widow and the adult children of that there is a beneficiary designated to receive marriage or of a previous marriage of the will- them upon death of the will-maker (DeLeeuw v. maker. The tendency in such cases is to award DeLeeuw, 2003 BCSC 1472; Wilson v. the whole of the estate to the widow (see e.g. Lougheed Estate, 2010 BCSC 1868). MacKinlay v. MacKinlay Estate, 2008 BCSC 994). (f) Character and Views of the Will-Maker A second category of “small estate” cases in- The two-part test in Tataryn is an objective test volves the competing claims of a widow and a regardless of whether the will-maker subjec- beneficiary who has an apparent moral claim on tively believed that adequate, just and equitable the will-maker but who was not a dependent provisions have been made. Accordingly, in Re within the meaning of the former WVA. When Serra Estate, [1978] B.C.D. Civ. (S.C.), the the widow is in financial need, she is generally court accorded little significance to the views awarded the whole of a small estate. This prin- of the will-maker who was “European in his ciple was extended to widowers in Tweedale v. outlook,” felt that “land ownership was for Tweedale Estate (1995), 1 B.C.L.R. (3d) 167 men,” and wanted the property to remain in his (C.A.), where Cumming J.A. applied Tataryn family. and stated that “an adult independent child is The will-maker’s subjective reasons for disin- entitled to less consideration where the size of heritance may only be considered provided that the estate is modest. And indeed, the estate in the reasons are valid and rational. the case at bar is extremely modest” (at 173). Cumming J.A. concluded that the wife did not (g) Cultural Practices make “adequate, just and equitable” provision The wishes of the will-maker with respect to for her husband; consequently, the will should the distribution of their estate must not fall be varied to pass the entire estate to the hus- short of the moral standards of Canadian socie- band. ty. For example, “a tradition of leaving the li- (c) The Size of the Will-Maker’s Family on’s share to the sons [of a will-maker] may work agreeably in other societies with other When there are a large number of claimants, value systems that legitimize it, but in our soci- the question of what constitutes a “just and eq- ety, such a disparity has no legitimate context. uitable” provision must be viewed in light of It is bound to be unfair, and it runs afoul of the reality. Unless the estate is very large, it is clear statute of this province” (Prakash v. Singh, that each claimant would likely receive a 2006 BCSC 1545 at para. 59; see also Grewal smaller award than if the will-maker had left v. Litt, 2019 BCSC 1154). just one or two dependents. The courts have also found that “homosexuality (d) The Station in Life of the Will-Maker and the is not a factor in today’s society justifying a ju- Applicants dicious parent disinheriting or limiting benefits The will-maker’s station in life (including such to his child” (Peden v. Peden Estate, 2006 factors as profession, social standing, and BCSC 1713 at para. 55). standard of living) may be relevant to quantum. (h) Omission or Oversight of the Will-Maker The station in life of the applicants may also be relevant to quantum. Evidence may show how the will-maker wished to provide for the plaintiff but failed to perform

Wills 135 this duty because of an omission or oversight, 15139 (B.C.S.C.)). When it comes to a spouse and this evidence may affect quantum. attacking an inter vivos transfer, there are more considerations involved and such a transfer In Hancock v. Hancock, 2014 BCSC 2398, the could be potentially set aside (see Mawdsley v. will-maker made a will in the year 2002, which Meshen, 2012 BCCA 91, for a more detailed provided that her estate be distributed to her discussion). daughter Marnie and disinherited the other four children. (j) Competing Moral Claims on the Bounty of the Will-Maker At the time the will was made, the will-maker had provided various inter vivos gifts of monies The court in Tataryn at 823 stated that where and real property to her children. However, the the size of the estate permits, all conflicting will-maker believed that the real property gifted claims should be met. However, where priori- to the daughter was not as valuable as the real ties must be considered, claims that would have property given to the other children due to been recognized as legal obligations during a problems associated with mould, ants, and a testator’s lifetime should generally take prece- challenging sewage system. As such, the will- dence over claims based on moral obligations. maker provided that her estate would be given As between claims based on moral obligations, to the daughter only so that all five children the court must rank the claims based on their would be provided for fairly. strength. In 2007, the daughter’s property was sold for As only spouses and children may apply to vary $1.4 million. The will-maker communicated to the will under s. 60 of WESA, the moral claims her two sons and her daughter-in-law that she of persons other than spouses and children are was surprised and embarrassed that the daugh- not considered in the wills variation analysis. ter received more than the two sons, and ex- However, if the will-maker provides for such pressed her desire to provide more for the two persons in the will, the court would balance tes- sons. However, she did not change her will. tamentary autonomy and the competing moral claims in determining the proper quantum in a The court found that the statements made by wills variation action. the will-maker to the two sons and daughter-in- law showed that the will-maker recognized her The blended family situation results in many moral obligations to her sons, which were not different factors which may impact the court’s discharged by the provisions under the will. assessment of competing legal and moral Accordingly, the court varied the will to pro- claims against a will-maker’s estate. The fol- vide a bequest of $125,000 to one son (who lowing cases discuss some of these considera- cared for the will-maker and was in financial tions: need) and $75,000 to the other son.  A will-maker’s legal obligation to his (i) Inter Vivos Gifts by Will-Maker to Applicants common-law wife of two years took priority over the will-maker’s moral obligation In determining quantum, the court will consider to his son, who was economically inde- benefits that the will-maker had bestowed on pendent and had had no contact with the the plaintiff and other beneficiaries in the will- will-maker since he was 7 years old. How- maker’s lifetime, or at least within a few years ever, this priority did not preclude the will- of death (Re Worts (1977), 3 B.C.L.R. 55 maker from having an additional moral du- (S.C.)). ty to make adequate, just and equitable By dissipating the estate during the will- provision for his son (Pattie v. Standal Es- maker’s lifetime, a will-maker may limit the as- tate, 1997 CanLII 2503 (B.C.S.C.)). sets subject to WESA. However, the courts may  A disinherited child in extreme financial set aside inter vivos transfers (including to a need outweighed a will-maker’s obligation trust) if the transfer constituted a fraudulent to the will-maker’s short-term surviving conveyance. Whether a transfer can be set aside spouse. As a result, the child received the depends on whether a person falls within the entirety of a modest estate (Hagen- class of people contemplated by the Fraudulent Bourgeault v. Martens, 2016 BCSC 1096). Conveyance Act, R.S.B.C. 1996, c. 163. It is clear that if the only basis for setting aside a  A will which provided the entirety of the transfer is the right of a child to commence a will-maker’s estate to an adult financially proceeding to vary a will under WESA, that is independent child, who also received sig- not sufficient to void the transfer (See Hossay nificant gifts from the will-maker outside v. Newman, 5 C.B.R. (4th) 198, 1998 CanLII of the will, was varied to provide the entire

Wills 136 estate to the second spouse who was in v. Blais, 2011 BCSC 1714; Waldman v. poor health and of modest means (Wong v. Blumes, 2009 BCSC 1012). Ghone Estate, 2016 BCSC953). (p) Whether the Applicant Has or May Have  The moral obligation to the will-maker’s Dependents children from his first marriage was satis- The plaintiff’s responsibility toward dependents fied with insurance benefits given to them may be relevant in determining quantum. outside of the will. As such, the court upheld the will-maker’s will leaving the en- (q) Health and Mental Capacity of the Applicant tirety of the will-maker’s estate to a long- The health and mental capacity of the applicant term second spouse (Sim v. Sim Estate, is only considered to the extent that they were 2016 BCSC 1222). reasonably foreseeable at the time of the will- (k) Relative Needs of the Applicants maker’s death. In considering what provision would be In Eckford v. Vanderwood, 2014 BCCA 261, adequate, just and equitable, “the situation of the plaintiff argued that her deterioration in the others having claims upon the will-maker health between the date of the will-maker’s must be taken into account” (Walker v. death and the date of trial should be considered McDermott at 96). The relative needs of the in determining whether the will-maker made various claimants are most significant when the adequate, just, and equitable provision for her. estate is a small one, incapable of providing The court considered Landy v. Landy Estate adequately for the needs of all of the will- (1991), 60 B.C.L.R. (2d) 282, and Hall v. Hall maker’s dependents. In the case of a small Estate, 2011 BCCA 354, and determined that estate, the burden is on the plaintiff to whether the will made adequate, just, and equi- demonstrate “comparative need” (Re Oxbury table provisions is based on what was reasona- Estate, [1978] B.C.D. Civ. (S.C.)). bly foreseeable at the time of the will-maker’s death. If the will-maker did not provide ade- (l) Personal Income of the Applicants quate, just and equitable provisions, then the The property and income of the applicants may court may look to changes in the circumstances be relevant to quantum. of the plaintiff between the date of death and the date of trial in determining what adequate, (m) Financial Circumstances of Beneficiaries’ just and equitable provision should be made. Spouses However, the court found that while the will- The financial circumstances of beneficiaries maker was aware of the plaintiff’s ailments, and their spouses are relevant (Jones v. Jones, these conditions were not impairing the [1985] B.C.D. Civ. 4223-05 (C.A.)). plaintiff’s ability to work and function at the (n) Change in Existing Circumstances time of the will-maker’s death. It was not reasonably foreseeable at the date of the will- Substantial changes in circumstances of a maker’s death that the plaintiff’s health would claimant under WESA or a beneficiary under decline. Accordingly, the plaintiff’s wills the will between the will-maker’s date of death variation claim was dismissed. and the date of the trial may be taken into account when determining quantum (Landy v. In Hall, the will-maker’s estranged son sought Landy (1991), 44 E.T.R 1 (B.C.C.A)). to vary the will, which left the estate to the other son. The will noted that the estranged son See also Frinskie v. Frinskie, [1979] B.C.J. No. was a skilled electrician and capable of sup- 51 (S.C.) and Re Berger (1978), 2 E.T.R. 275 porting himself and his family. However, sub- (B.C.S.C.), for cases in which the claimant was sequent to the will-maker’s death, the estranged not in present need, but the court considered the son suffered an injury which resulted in the client’s future needs in determining the will did amputation of his right leg and various medical not make adequate provision for proper problems which left him unable to work. The maintenance and support. court declined to consider the estranged son’s (o) Future Value of Money and Interest Rates injury and medical problems in determining if the will-maker made adequate, just and equita- Factors in the economy, such as the future val- ble provisions as the injury and medical prob- ue of money and interest rates, may be relevant lems were not reasonably foreseeable at the to quantum. date of the will-maker’s death. The court may also consider the effect of the order on the taxes payable by the estate (Mars

Wills 137 (r) Contributions by the Applicant moral obligations to the children. Significantly, Dunsdon distinguished the In Tataryn, the Supreme Court of Canada held assessment of contribution in a wills that the applicant’s contribution to the estate variation context from that in an unjust goes to the applicant’s legal claim to the estate. enrichment claim. An applicant’s contribution to the estate may also affect the moral obligations owed by the In its analysis, the court noted that in an will-maker (Dunsdon v. Dunsdon, 2012 BCSC unjust enrichment claim, the claimant 1274 at para. 134; and Hammond v. Hammond, must fulfill the three-step test to estab- 1995 CanLII 1597 (B.C.S.C) at para. 29). lish unjust enrichment (that is, there must be an enrichment, a corresponding (i) Contribution by the Surviving Spouse deprivation, and no juristic reason for In Brown v. Terins, 2016 BCSC 42, the enrichment). If the claimant establishes court assessed the spouse’s contribution unjust enrichment, then the will-maker’s in determining the will-maker’s legal legal obligations to the claimant in a obligations under the Tataryn frame- wills variation claim are also estab- work. The court noted that s. 95(1) of lished. However, if no unjust enrichment the FLA provides for an unequal divi- claim is established, the claimant’s con- sion of family property if equal division tribution may nonetheless be considered would be significantly unfair. The court in assessing the will-maker’s moral ob- found that on a hypothetical separation ligations to the claimant. Applying this of the spouses, an equal division of analysis, the court held that though the property would be unfair as the surviv- claimant could not establish a legal ing spouse did not contribute to the ac- claim based on unjust enrichment, she quisition or upkeep of the family proper- had established that the will-maker had ty. Accordingly, the court found that the a stronger moral obligation to her than will-maker’s legal obligation to the sur- to the will-maker’s other children be- viving spouse was limited to approxi- cause she had contributed significantly mately $300,000. to the will-maker’s business. According- ly, the court varied the will with a pref- When a wife had contributed substan- erence shown to the claimant. tially to the estate of the will-maker and had at times been the family “breadwin- Contribution also played a role in a suc- ner,” she was held to be entitled to the cessful counterclaim by one of three whole of the estate (Gieni v. Romaniuk, adult child beneficiaries in Bellinger v. [1980] B.C.J. No. 1639 (S.C.)). Nuyetten Estate (2002), 45 E.T.R. (2d) 10, maintaining, in her favour, an une- Even in the absence of a financial con- qual division. tribution, courts have considered work as a homemaker “a contribution that far See also McBride v. Voth, 2010 BCSC exceeded the value of the estate” in Da- 443, in which a child who lived with the vidson v. Allen (1976), 28 R.F.L. 74 at will-maker, provided care and compan- 76 (N.B.S.C.), and considered “care and ionship to the will-maker, and contribut- attention” to a will-maker over a 12-year ed to household expenses was granted a marriage in Re Ferster Estate, [1974] larger share in the estate. B.C.D. Civ. (S.C.). See also Waldman v. Blumes, 2009 BCSC 1012, in which a will-maker who died at the age of 91 was held to owe a strong moral obligation to his significantly younger wife based on the care she provided to him in his later years. (ii) Contribution by the Will-Maker’s Children In Dunsdon v. Dunsdon, 2012 BCSC 1274, the court considered the contribution made by the will-maker’s adult children to the will-maker’s business in assessing the will-maker’s

Wills