Recent B.C. Case Illustrates Importance of Documenting Transactions Between Family Members

All too often, transactions between family members (loans, gifts, property transfers, etc…) are not properly documented or are not documented at all. I see this repeatedly in transactions between parents and children.  The other children (i.e. the transferees’ siblings) seek to challenge the transaction after the parents’ deaths, so that the transferred asset forms part of the parents’ estates, causing fractures within the family.

This was the case in the recent B.C. Supreme Court decision in Cadwell Estate v. Martin 2021 BCSC 1089.   The Court observed:

[1] As this case shows, when a significant financial transaction is casually entered into between parents and their adult children, tragic consequences may occur, if the terms of the transaction are not clear to the members of the family at the outset, or are not properly, legally documented

In 2004, Bill and Ruth Cadwell (the parents) paid $170,000 to their daughter and her husband (the defendants). The payment was used to assist with the purchase and construction of a new house by the defendants. The house was modified to include a suite suitable for the parents.

The house was built, and the defendants and the parents moved into the house in 2005. No agreement was put in writing. Bill Cadwell died in 2007. Ruth Cadwell lived in the suite for 12 more years until she died in 1981.

The $170,000 payment lead to “considerable friction over the years” between various family members, and eventually lead to this litigation.

The plaintiff (the executor of Ruth Cadwell’s estate) claimed that the payment was an equity investment in the property, or that a resulting trust in the property was created. In the alternative, the plaintiff claimed in unjust enrichment, or for repayment of the amount as a loan, with interest.

The defendants said that the payment was a loan, which was paid off by notional payments of rent applied against the loan over the years. In the alternative, they argued that the loan claim was statute barred because the limitation period had expired.  The defendants relied upon a loan repayment schedule document initialed by Bill Cadwell. The plaintiff argued that this document was a forgery, created for the purpose of the litigation.

The Court concluded that there was no equity investment. While Ruth may have referred to the payment as an “investment”, that was not sufficient to establish that the parents were investing the $170,000 to acquire a beneficial interest in the property. The Cadwells had some business experience. They knew they were not going to be registered on title. There was no evidence of any discussions regarding proportionate ownership shares, sharing of expenses, etc…  On the evidence, the parents did not expect to have an ownership interest in the property. Instead, they expected to remain in the suite, free of charge, for some period of time, and the parents would be able to rely upon the defendants for help as needed.

The Court concluded that the parents intended the $170,000 payment to be a loan. The next issue was whether there had been repayment. The Court concluded there was no agreement for repayment by way of notional rent.

The Court held that the repayment schedule document was a forgery: “it represents the agreement that the defendants wish they had made with the Cadwells, but did not make.” It’s existence did not make sense in the circumstances, which included a conversation that Ruth surreptitiously recorded between her and one of the defendants, in which she asked for the return of her money.  The plaintiff went so far as to call an expert in computer fonts, who testified that the font used for the repayment schedule document did not reach public use until January 2007 (the defendants claimed the document was prepared in 2004).

However, the defendants were fortunate because the Court held that the claim was statute barred. The former Limitation Act applied to the claim, and so the six-year limitation period for the demand loan began to run on the day the loan was made. It should be noted that the current Limitation Period provides for a two year limitation period, which starts on the date that a demand is made.

As a result, the defendants did not have to repay the $170,000 amount due to the passage of time, even though they attempted to reply upon a forged document at trial (although they were not awarded their costs at trial due to their conduct).

There is a lesson here.  As observed by the Court:

[11]         As I am confident that everyone involved now recognizes, it would have been quite easy to document an agreement about the payment at the outset, thereby avoiding years of conflict.

Case Comment: A Party who Transfers Property to Avoid Creditors May Not Later Reclaim It

If you transfer property to family members or other persons to avoid your creditors, you cannot assume that you are entitled to demand the return of the property at a later date.

The B.C. Supreme Court recently considered this issue in Pattinson v. MacDonald 2021 BCSC 652.

In 1986, Ms. Pattinson transferred a 160 acre farm property to her children, the defendants. She now sought an order that the property was held by the defendants in trust for her.  She sought the return of the property, along with an accounting of rents, profits and income received by the defendants in respect of the property.  She also claimed that her children were unjustly enriched by her upkeep of the property.

Her children claimed that they owned the property as a result of the 1986 transfer. They claimed that (1) they paid consideration for the transfer, and (2) the transfer to them was a fraudulent conveyance and/or intended to avoid claims by her creditors.

Ms. Pattinson claimed that the property was transferred upon legal advice “to protect the lands from frivolous claims … and to ensure the land stayed in control of the family.” She had been named as a defendant in family law proceedings commenced against her common law spouse (by his ex-spouse).

The children asserted that the property was transferred into their names (1) under an agreement with Ms. Pattinson’s mother involving the exchange of gold wafers, and (2) to avoid various creditors. They claimed that they had knowledge of the transfer in 1986 when it was made. They did not ask for the property to be transferred into their names.  They were not asked to hold the property in trust and did not agree to hold it in trust.

Ms. Pattinson denied that gold wafers were provided in exchange for the transfer. She claimed that her mother gifted the gold wafers to her. The issue of whether consideration was paid for the transfer was relevant to the issue of whether the property was held in resulting trust. Where a transfer is made for no consideration, the onus is on the recipient (in this case the children) to prove that a gift was intended. In Pattinson, the defendants had not met the onus required to prove that consideration was paid.

However, the court held that even where no consideration is paid for the transfer, a party who transfers land to avoid creditors may not reclaim it.

It was clear that the purpose of the 1986 transfer was to avoid claims. The court held that it was likely that the children were named by their middle names on the transfer document to avoid creditors knowing that she transferred property to her children. She also failed to refer to owning property in bankruptcy proceedings.

Ms. Pattinson was successful in protecting her property from creditors, but she could not now seek the return of the property 35 years later. She also failed to show the elements of unjust enrichment, and even if she had, her claim would have been dismissed on the basis that she delayed in making her claim until 33 years after the transfer.

Transferring assets for the purpose of avoiding creditors carries significant risk. Creditors may have certain remedies against the assets despite the transfer, but there is the additional risk that transferee will refuse to return the property once the creditors are no longer a concern.

Limitation Periods: When was the Claim “Discovered”?

I am often contacted when a loved one has died, and a family member has concerns about what happened to the deceased’s assets, which ought to have formed part of their estate. There may be much less than expected, or a particular asset may be missing or may no longer be in the deceased’s name. Monies may have been misappropriated using a power of attorney, or procured by undue influence. The family member may have understood that property transferred during the deceased’s lifetime was to be held in trust for certain beneficiaries, but the recipient/transferee now takes the position that the transfer was a gift and they are entitled to keep it.

Sometimes these transactions and transfers have taken place years or even decades before the deceased’s death, but they are not discovered until after the deceased’s death. Sometimes everyone is aware of the transfer itself, but only discover later that the recipient intends to argue that the property belongs to them and is not held in trust. Clients want to know whether it is too late to go back and challenge transfers if they happened many years ago.

This issue was recently considered by the B.C. Supreme Court in Maussion v. Maussion 2021 BCSC 530. Maussion involved a dispute between children with respect to their parents’ estates.  The parents died in 2012 and 2016. The plaintiff son alleged that his sister improperly received assets from the parents during their lifetimes, which were to form part of the estate. She allegedly used a power of attorney granted to her to sell property or transfer it to herself (in 2004, 2005 and 2016). The action was not commenced until January 31, 2019.

The defendant denied the claims on the basis that all transfers were gifts to her. She also applied for dismissal of the claims on the basis that they were statute-barred, i.e. that the action was commenced after the expiration of the limitation period.

The matter was governed by s. 6 of the Limitation Act, SBC 2012, c. 13, which provides that a court proceeding in respect of a claim must not be commenced more than two years after the date on which the claim is discovered. A claim is “discovered” on the first day on which the person knew or reasonably ought to have known:

  1. that injury, loss or damage had occurred;
  2. that the injury, loss or damage was caused by or contributed to by an act or omission;
  3. that the act or omission was that of the person against whom the claim is or may be made; and
  4. that, having regard to the nature of the injury, loss or damage, a court proceeding would be an appropriate means to seek to remedy the injury, loss or damage.

There are specific provisions relating to the discovery of fraud or trust claims. These claims are “discovered” only when the beneficiary becomes fully aware of certain matters. An action to recover trust property from a trustee (for example a party who holds property in resulting trust) does not begin to run until the beneficiary becomes fully aware of the fraud, fraudulent breach of trust, conversion or other act of the trustee on which the action is based.

The defendant in Maussion argued that a letter from the plaintiff’s lawyer in 2011 expressing concern about her conduct showed that the plaintiff “discovered” a potential claim by at least 2011. However, the court concluded that the 2011 letter addressed a completely different issue. Instead, a February 2017 letter from the defendant’s lawyer, in which it was stated that the transfer of certain property was a gift, was the date at which that the plaintiff should have been aware that she had a claim. As a result, the claim was commenced within the limitation period, and the application to dismiss the claim as statute-barred was dismissed.

If you become aware of concerning conduct many years after the suspicious transfer or other event occurred, you may still have a potential claim that has not expired. It will depend upon when you discovered the claim.

B.C. Court Intervenes to Uphold Bequest To Charity

It is common for will-makers to make bequests to charitable organizations in their wills. But what if the charity that is named as a beneficiary no longer exists at the date of the will-maker’s death? Over time, charities may be dissolved or cease to exist, change names or structures, or otherwise be replaced by successor organizations.  If a will-maker intends to make a charitable bequest, but the charity named in the will no longer exists at their death (or no longer exists in that name or form), what happens?

This issue was recently considered by the B.C. Supreme Court.  In Galloway Estate v. British Columbia Society for the Prevention of Cruelty to Animals 2021 BCSC 413, the deceased left shares of her estate to certain charitable organizations “that are in existence as at the date of [her] death,” including “Pacific Coast Public Television Association” (“PCPTA”).

PCPTA was registered as a Canadian charity so that persons could donate to the commercial-free educational channel, KCTS 9, or PBS Channel 9. The problem was that PCPTA (the beneficiary named in the will) was dissolved in 2018, and therefore that particular entity no longer existed at the deceased’s death.  KCTS also had changed its name to Cascade Public Media (“CPM”), and CPM continued to operate KCTS 9.

The executor needed directions from the court:

  1. Does the gift to benefit PBS/KCTS 9 fail because PCPTA no longer exists; or
  2. Can the PBS gift go to CPM instead?

The court applied the “cy-pres doctrine.”  The cy-pres doctrine determines what happens when property that has been dedicated to charitable purposes cannot be applied in the manner intended by the donor. Where the purposes or objects of a charitable trust have become impossible or impracticable to accomplish, the court may intervene and alter the purposes of the trust. The courts may implement modernized or modified objects that are “as near as possible” to the original purposes. The order must depart from the intentions of the settlor only to the extent required to remove the problem.

If it is not impossible or impractical (which the courts interpret broadly) to accomplish the purpose of the charitable trust, then the court cannot intervene.

In Galloway, the court concluded that the gift would go to CPM. The deceased intended to benefit the PBS channel, and CPM was now the entity that performed that role. CPM assumed responsibility for PCPTA’s obligations.

The court distinguished another case, Re Eberwein Estate 2012 BCSC 250. In that case, the deceased made a gift to a charity called “Aid to Animals in Distress,” which she donated to during her lifetime. The charity ceased to exist prior to the deceased making her will and her death. That gift was not subject to the cy-pres document (and the gift failed) because the court was unable to determine an alternative charity to which the gift should go.

If it appears that a specific charitable bequest may fail because the named charity no longer exists, in certain circumstances the court may intervene and give effect to the will-maker’s charitable intention by modifying the will to, for example, make the bequest to a successor charity, or a nearly identical charity.

B.C. Man Fails to Update Life Insurance Beneficiary Designation From Ex-Spouse to Current Spouse

When making changes to an estate plan, people sometimes overlook their direct beneficiary designations, for example on life insurance policies, RRSPs or TFSAs. You don’t want to make changes to a will, transfer assets into joint ownership with right of survivorship, and settle assets into a trust, but neglect to update a beneficiary designation. The result may be an unwelcomed surprise to your loved ones, when a beneficiary designation that you have failed to update provides a payout that was clearly not what you intended, and which is inconsistent with the rest of your estate plan.

This was the case in a decision of the B.C. Supreme Court released this week. In Knowles v. LeBlanc 2021 BCSC 482, the Court considered competing claims over the proceeds of a life insurance policy. The dispute was between the deceased’s ex-wife, who was named as the sole beneficiary under the policy, and the deceased’s long-time spouse at his date of death (described as the “disappointed beneficiary”).

The deceased obtained the life insurance policy when he was still married to his first wife, and the records indicated that no change of beneficiary had ever been filed. He separated from his first wife in the late 1980s, and their divorce was finalized in May 1991.  He moved in with his current spouse around 1993, and they lived in an exclusive common law relationship until his death in 2019.

The deceased continued the monthly payments on the life insurance policy with automated withdrawals from a joint account which he held with his new spouse. The benefit under the policy was $100,000.  Upon the deceased’s death, his spouse received the proceeds of every other life insurance policy that he held, as well as all of his other assets (by right of survivorship).

The Court first considered the intentions of the deceased. The evidence was clear that the deceased maintained feelings of hostility toward his ex-wife. He also became estranged from the two children that he shared with her. It was also clear that he intended to change the beneficiary designation to his spouse and thought he had done so.

While his ex-wife argued that there was no evidence of an intention to change the designation, the Court did not accept this in light of the ex-wife’s complete absence from his life after the divorce, his hostility toward her, and the circumstances which showed a wish to leave all of his property to his spouse.

The Court held that a consent order which was entered in the divorce proceedings involving the deceased and his ex-wife did not operate to prevent his ex-wife from claiming the proceeds of the life insurance policy. It did not include language that the parties clearly relinquished all interest in each other’s estate.

The spouse argued that if the ex-wife was to receive the insurance proceedings then this would result in unjust enrichment. To establish unjust enrichment, the plaintiff must show (1) an enrichment of the defendant; (2) a corresponding deprivation of the plaintiff; and (3) an absence of juristic reason (such as a contract) for the enrichment.

In Knowles, the spouse suffered a deprivation, as the premiums of the policy were paid from an account that she held jointly with the deceased for many years, and she believed that the deceased had changed the beneficiary designation to her. The ex-spouse would be enriched if she received the proceedings. There was no juristic reason for the enrichment, and there was no basis in the parties’ expectations or public policy to rebut the spouse’s recovery.

The court allowed the spouse’s claim in unjust enrichment, and imposed a remedial constructive trust over the insurance proceedings. The insurance company was directed to pay the insurance proceeds to the spouse.

The court was able to “fix” the deceased’s oversight in these particular circumstances.  The spouse had good facts on her side, including good evidence of the deceased’s intention.  This may not always be the case for a “disappointed beneficiary.”  This also resulted in time, stress and uncertainty for his spouse, which would have been avoided if he had properly updated the beneficiary designation.

B.C. Supreme Court finds that Deceased had Two Spouses Entitled to Share Estate

The recent decision of the B.C. Supreme Court in Boughton v. Widner Estate 2021 BCSC 325 discusses a number of important estate litigation issues in the context of an unusual fact scenario: the deceased had a second “secret” family.

The deceased was a victim of homicide.  He did not leave a will. At the time of his death, the deceased was married (to Ms. Widner) and had two children. At the same time, he was in a long term relationship (with Ms. Boughton), which the parties at trial agreed was a “marriage-like relationship” of at least two years. He also had two children with Ms. Boughton.

Ms. Boughton knew that the deceased was married, but the deceased told her he would eventually obtain a divorce and marry her. Ms. Widner had no knowledge of the deceased’s relationship with Ms. Boughton.  The deceased was living a double life, telling Ms. Widner that he was working part of the week on the other side of Vancouver island, when he was actually spending time with Ms. Boughton and their children.

The headline of this article in the Vancouver Sun nicely summarizes the salacious circumstances: “Secret family and wife battle in court over dead Hells Angels prospect’s assets” https://vancouversun.com/news/local-news/secret-family-and-wife-battle-in-court-over-dead-hells-angels-prospects-assets

The evidence at trial was that the deceased was a member of the Hells Angels. Ms. Boughton claimed that the deceased told her many times that he paid for several properties that were registered Ms. Widner’s name. Ms Boughton sought orders that the deceased’s estate consisted of half of the value of the properties held in Ms. Widner’s name.

This decision addresses a number of important issues:

A person can have multiple spouses. The Court held that a deceased person can have two spouses at the same time for the purpose of the Wills, Estates and Succession Act. In particular, a person can be in a marriage-like relationship with someone who is still married to someone else. The Court declared that Ms. Boughton was also the spouse of the deceased, and so the deceased had two spouses at the time of his death. Ms. Boughton and Ms. Widner are each entitled to half of the deceased’s estate.

Ms. Widner argued that this cannot be the case, as it would sanction polygamy, which is an offence under the Criminal Code. However, it was previously decided that the criminal law prohibits “conjugal union” or “multiple marriages”, but does not extend to “conjugal relationships” or “common law cohabitation” (i.e. marriage like relationships).

Statements made by the deceased as to beneficial ownership of assets may be admitted as evidence. The Court considered whether statements by the deceased were admissible for the truth of their contents. The deceased allegedly made statements to Ms. Boughton that he paid for properties, even though they were registered in Ms. Widner’s name.   The general rule is that hearsay evidence is not admissible for the truth of its contents. However, hearsay statements may be admitted if it can be established that the evidence is necessary and reliable. In this case, the deceased was dead and so the requirement that the evidence be necessary was satisfied. The court was satisfied that some of the deceased’s statements were reliable. The judge did not accept that the deceased’s statements that he paid for all of the properties was reliable, as other evidence showed this was not the case.

An Estate may be entitled to an award for unjust enrichment. The Court found that the deceased contributed $150,000 towards the properties that were registered in Ms. Widner’s name, which resulted in an unjust enrichment to Ms. Widner. There was no juristic reason for Ms. Widner to retain the benefit of the deceased’s contributions. As a result, the deceased’s estate was awarded $150,000 from Ms. Widner.

Estates in the News: Larry King’s Will Contested and a $5 Million Bequest to a Dog

There have been two interesting estate-related stories in the news this week.

Larry King’s Widow Contests his Will

First, the widow of TV host Larry King has gone to court to contest a handwritten will that purportedly leaves Mr. King’s$2 Million estate to his five children. She alleges that one of his children exerted undue influence on him, that he was “of questionable mental capacity” when the will was signed, and that he made a previous will in 2015 in which she was named executor.

Larry King had filed for divorce in 2019, but his widow claims that he was not actually pursing the divorce, and in fact they were working toward a possible reconciliation.

More can be read here: https://www.bbc.com/news/entertainment-arts-56095825 and https://people.com/tv/larry-kings-widow-shawn-contests-his-will/

If this case arose in British Columbia, Mr. King’s widow would have various remedies, some of which would depend upon whether she was a “spouse” at his death. She could argue that the will was invalid as a result of undue influence or lack of capacity. If the handwritten will was valid, then she could seek to vary the will to make provision for her only if she was Mr. King’s spouse at the date of death. The separation may have terminated her standing as a “spouse”. However, if they began to live together again for at least 90 days and the primary purpose for doing so was to reconcile, then she would have regained her standing as “spouse” and could seek to vary the will. If she was not a “spouse” at death, then she could bring a family law claim against Mr. King’s estate (or continue the divorce proceedings that were ongoing at his death).

Dog Inherits $5 Million

A businessman in Nashville who died last year stipulated in his will that upon his death his assets, worth an estimated $5 Million, would be transferred into a trust for the benefit of his 8-year-old border collie, Lulu. The will names a friend as Lulu’s official caretaker, and the funds are to be used to pay Lulu’s reasonable expenses. It is unclear who will receive the remaining monies upon Lulu’s death.

More can be read here: https://www.cnn.com/2021/02/13/us/dog-border-collie-lulu-5-million-dollar-trust-owner-trnd/index.html and https://people.com/pets/man-leaves-5-million-to-his-dog-in-will/

In British Columbia, will-makers have the autonomy to distribute their estate by will as they see fit.  If they want to make an “unconventional” bequest or provision in a will, then that is their choice to make. However, there are potential avenues to challenge such a bequest. There may be a challenge to the validity of the will, on the basis that the will-maker lacked capacity, did not understand what they were doing, or was unduly influenced. A child or spouse (if there is one) may also bring a claim to vary the will on the basis that it does not make adequate provision for them.

Case Comment: B.C. Court Dismisses Attempt by Estranged Spouse to Set Aside Property Transfer and Vary Will

I am often contacted by executors or beneficiaries of an estate when they have been served with what they consider to be a “nuisance claim”. Unfortunately, the death of a loved one may present an opportunity for others to bring unmeritorious claims. The estate may be large enough to attract claims that should never have been made, and the person who would have the best evidence to oppose the claims (the deceased person) is dead.

A typical example is someone surfacing and claiming to be the deceased’s spouse for the purpose of bringing a wills variation claim or other claim. This person may be a former spouse of the deceased, a casual romantic partner, a roommate, or even a stranger. I have previously written about the test to determine whether someone has standing as a “spouse” to bring a wills variation claim here.

The B.C. Supreme Court recently dismissed a dubious claim by a person claiming to be a current spouse of the deceased (but was found not to be one) in Lee v. Chau 2021 BCSC 70. In Lee, the deceased transferred his real property into joint tenancy with his adult children as joint tenants. His children said that he intended the transfer to be a gift, that their father’s relationship with the plaintiff ended many years before, and their marriage was a sham. The plaintiff argued that she was the deceased’s wife for 19 years. She claimed that the defendants held the property in resulting trust for her benefit, and she also sought to vary the deceased’s will to make provision for her.

The Will included the following rather scathing clause explaining why the deceased made no provision for the plaintiff:

“I am giving nothing to NU LEE [the plaintiff] whom I married on May 30, 1995, as although we were married, she refused to consummate our marriage or live with me as husband and wife and on March 1, 1996, she left me and returned to Taiwan, China and has not returned. I believe that she married me for the sole purpose of facilitating her entry into Canada as a landed immigrant. She has never and refused to consummate our marriage and we have at no time lived together as husband and wife relationship”.

The Court concluded that the deceased understood the effect of transferring property into joint tenancy, and that by doing so he intended to gift his property to his children. The Court gave clear indication that it did not think much of the plaintiff’s attempt to claim an interest in the property. In addition to quoting the above passage from the will, they relied upon the following evidence that the plaintiff was estranged from the deceased:

  • The plaintiff’s extended absence from the property for many years before the deceased’s death;
  • Her full-­time residence outside Canada for more than three years before his death;
  • Her ignorance of his terminal illness;
  • Their lack of contact immediately before his death, and
  • The fact that he died without her knowledge.

The Court also held that the plaintiff was not the “spouse” of the deceased at the date of death, and therefore did not have standing to bring a wills variation claim. The plaintiff was ordered to pay the defendants’ costs. While the Court did not use the words “nuisance claim” or say that the claim was a frivolous or vexatious one, the judge was clearly not impressed by the plaintiff’s attempts to come back and try to make a claim against the property and the deceased’s estate.  This decision confirms that the B.C. Courts are fully prepared to dismiss claims that they consider to be without merit.

What Happens in B.C. when Spouses die Simultaneously?

Unfortunately, it is not uncommon for spouses (or other family members) to die in a “common disaster” or tragedy, in which they die at the same time or in circumstances that make it uncertain which of them survived the other. One spouse may also survive the other, but then die mere days later (perhaps from injuries caused by the “common disaster”). If the two spouses have different estate plans, then the question arises: how are each of the estates to be distributed? This may be an issue when dealing with multiple marriages and blended families, where perhaps each spouse has left all or part of their individual estate to the other spouse and their own children, but not to their stepchildren. This arises not just with respect to their wills, but also with respect to jointly registered property, which carries with it a right of survivorship.

Fortunately, the Wills, Estates and Succession Act (“WESA”) simplifies this issue in British Columbia.

WESA provides that if two or more persons die at the same time or in circumstances that make it uncertain which of them survived the other, unless a contrary intention appears in an instrument, rights to property must be determined as if each had survived the other. If two or more persons held property as joint tenants, then unless a contrary intention appears in an instrument, for the purpose of determining rights to property, each person is deemed to have held the property or joint account as tenants in common with the other or with each of the others.

WESA goes one step further: a person who does not survive a deceased person by five days, or a longer period provided in an instrument, is conclusively deemed to have died before the deceased person for all purposes affecting the estate of the deceased person. If two persons hold property as joint tenants, or hold a joint account, and it cannot be established that one of them survived the other by five days, then one half of the property passes as if one person survived the other person by five days, and one half of the property passes as if the other person had survived the first person by five days.  Under the wording of WESA, the five-day survival requirement cannot be shortened in a will, but it can be extended.

As a result, in these circumstances each person’s assets (or their “half” of joint property) forms part of their estate and will be distributed as per their estate plan.

The above provisions do not apply to certain insurance monies, which are dealt with under the Insurance Act. For example, unless a contract or declaration provides otherwise, if the person whose life is insured and a beneficiary die at the same time or in circumstances rendering it uncertain which of them survived the other, the insurance money is payable as if the beneficiary had predeceased the person whose life is insured.

Family of Deceased Fights $1.5M bequest to the SPCA

A woman in Vancouver is contesting a bequest made in her great-aunt’s will in favor of the SPCA. A recent CBC story on the lawsuit can be found here: https://www.cbc.ca/news/canada/british-columbia/vancouver-family-heading-to-court-in-1-5m-inheritance-fight-with-spca-1.5803925

The deceased left the residue of her estate to the SPCA. The estate includes a valuable home in the Point Grey neighborhood of Vancouver. As a result of skyrocketing property values, it is estimated that the SPCA stands to receive approximately $1.5M from the estate.

The plaintiff is not the spouse or child of the deceased, so she does not have standing to vary the will. Instead, she wants to have a handwritten note composed by the deceased on her 99th birthday (in 2017) admitted to probate as reflecting the true final testamentary intentions of the deceased. The note purports to limit the amount of any gift to the SPCA to $100,000.

Section 58 of the Wills, Estates and Succession Act [“WESA”] allows the court to admit to probate a document or record that does not meet the technical requirements of a will. I have discussed this section in other posts, including one found here. This section would permit a handwritten note to be fully effective as though it had been made as part of the will.

In this case, the handwritten note is unsigned, undated and unwitnessed, and the deceased did not take any steps in the three years after writing the note to change her will to make it consistent with the note, so it will be interesting to see if it meets the test under s. 58 of WESA. The SPCA has also raised concerns about the deceased’s testamentary capacity when the note was written. If she had lacked capacity at the time, the handwritten note would not be effective as a testamentary instrument.

The plaintiff says that the SPCA is “greedy” for attempting to enforce the terms of the will, while the SPCA has called this a “challenging situation” for all parties.  The trial is set for January 2021.  However, as most estate litigation claims are settled in advance of trial through mediation and negotiation to avoid the expense and uncertainty of proceeding to trial, we may never know the final result.