In the recent decision of Unger Estate (Re) 2022 BCSC 189, the B.C. Supreme Court considered what happens to a beneficiary’s share of an estate when that beneficiary is convicted of murdering the deceased.  Fortunately, these are extremely rare circumstances (rare enough to be reported in the media).  However, the case did give the Court an opportunity to discuss what happens when a gift cannot take effect for any reason, which is not as rare (for example, a beneficiary dies before the will-maker).

In Unger, the deceased had two sons. She made a will leaving her estate to her sons in equal shares. The will further provided that if a child predeceased her but left children their own, then those children (i.e. the deceased’s grandchildren) shall receive their parent’s share. In the alternative, any part of the estate that did not pass to one of the deceased’s children or grandchildren was to be divided equally between two charities.  At the time of her death, the deceased’s estate was worth approximately $860,000.

One of the deceased’s sons entered a guilty plea to the charge of second degree murder of his mother. He admitted to his role in causing her death, and was sentenced to life imprisonment with eligibility for parole after ten years.

In Canada, there is a rule of public policy which excludes the person responsible for another person’s death of taking any benefit. The son presumably was aware of this and agreed to voluntarily disclaim any entitlement to his mother’s estate.  There are case authorities which suggest that this rule extends to those who claim through the criminal’s estate.

The son who could no longer inherit has a daughter, who was born eleven days after his mother’s death.

The issue for the court was who would receive the son’s share of the estate: his daughter, or the two charities who were named as alternate beneficiaries? The trustees sought advice and direction from the court.

There was some evidence that the Deceased’s relationships was both sons had “eroded”, and she was considering changing her will to provide for her grandchildren. However, this was irrelevant to the issue before the Court because she did not actually change her will.  The Court looked at the deceased’s intentions in making the will.

The Court concluded that the son’s portion of the residue passed to his daughter. The clear intent of the deceased in the will was that if one of the deceased’s children predecease her, any children of that child were to receive the deceased child’s share.  In this case, the son’s daughter was an “alternative beneficiary” of the gift to the son as contemplated by s. 46 of the Wills, Estates and Succession Act which provides as follows:

When gifts cannot take effect

46   (1) If a gift in a will cannot take effect for any reason, including because a beneficiary dies before the will-maker, the property that is the subject of the gift must, subject to a contrary intention appearing in the will, be distributed according to the following priorities:

(a) to the alternative beneficiary of the gift, if any, named or described by the will-maker, whether the gift fails for a reason specifically contemplated by the will-maker or for any other reason;

(b) if the beneficiary was the brother, sister or a descendant of the will-maker, to their descendants, determined at the date of the will-maker’s death, in accordance with section 42 (4) [meaning of particular words in a will];

(c) to the surviving residuary beneficiaries, if any, named in the will, in proportion to their interests.

(2) If a gift cannot take effect because a beneficiary dies before the will-maker, subsection (1) applies whether the beneficiary’s death occurs before or after the will is made.

As a result, the granddaughter was first in priority for distribution of her father’s share.  The headline from the Vancouver Sun article summarizes a concern with this: “Court grants half of murdered Chilliwack woman’s estate to her killer son’s daughter.”

There were also accounts with direct beneficiary designations made in favor of the deceased’s two sons (i.e. which would pass outside of the estate and not be dealt with in the will). The benefits which otherwise would have been designated to the son who caused the deceased’s death were instead to be paid to the other son.