Category: Validity of a Will

Beneficiary Holds Estate in Trust for a Third Party

March 6, 2020

Where a deceased person leaves a will, a disappointed party may seek to vary the will, or argue that the will is invalid on a number of grounds.  If a deceased dies without a will, the disappointed party has fewer remedies.  If there is no will, the estate passes on an intestacy, and the Wills, Estates and Succession Act sets out who will receive the estate.  There is no discretion for the court to stray from what is provided for in the Act.

In limited cases, this may not be in the end of the matter.  Bergler v. Odenthal 2019 BCSC 1882 was such a case.  In Bergler, the deceased died after the rapid onset of pancreatic cancer.  She did not have any children.  Her common law spouse, Mr. Odenthal, survived her.   She did not make a will.  As a result, her entire estate passed to Mr. Odenthal on an intestacy.

However, she gave Mr. Odenthal specific instructions about her estate.  She told him that she wanted her assets to be given to her niece.  All instructions were verbal – there was nothing in writing.  The issue was whether a trust was created by the deceased, wherein Mr. Odenthal held her assets solely for the benefit of the niece.

It is risky for a testator to deliberately forego preparing a will, and instead trust that the person who receives the estate under an intestacy will distribute assets in accordance with their instructions, especially when there is nothing in writing to confirm these instructions.  There may be no witnesses and/or the person who received the instructions may deny ever receiving such instructions.

Mr. Odenthal refused to transfer the assets to the niece after the deceased’s death.

Fortunately for the niece, the deceased made statements in the presence of third parties about her wishes, and Mr. Odenthal had a conversation with the niece and a third person (a second niece) about these wishes.  He also made certain admissions during his examination for discovery and at trial that these were the deceased’s wishes.

A secret trust arises where a person gives property to another (the “donee”), communicating to that person an intention that the property be dealt with in a specific way upon the happening of an event, and the donee accepts the obligation. The essential elements are the intention of the donor, a communication of the intention to the donee and acceptance of the obligation by the donee.  The court in Bergler held that the requirements of a secret trust were satisfied, and ordered judgment against Mr. Odenthal for the value of the assets that formed the deceased’s estate.

Who Can Dispute the Validity or Provisions of a Will?

February 24, 2020

A will may be attacked on the basis that the will-maker had lacked the necessary mental capacity to make the will or the will was the result of fraud, coercion or undue influence from someone else.

Such claims may be made by anyone who would benefit from an earlier will if the contested will is set aside or by someone who would, according to Part 3 of the Will, Estates and Succession Act, [SBC 2009] Ch. 13 (“WESA”), benefit if the deceased had died without a valid will at all.

In addition, s. 60 of the WESA gives the spouse and children of a will-maker the right to claim a variation of the will if it does not make adequate, just and equitable provision for him or her. A will variation claim must be commenced within 180 days of the executor named in the will obtaining a grant of probate of the will.

A dispute as to the validity of a will may be started by filing a caveat to prevent the executor obtaining a grant of probate without first proving the validity of the will in solemn form to the satisfaction of the court. If the court is satisfied as to its validity the will may still be subject to a will variation claim.

In an action for proof of a will in solemn form, the court must be satisfied that it was signed in compliance with the statutory formalities (in writing, signed at the end by the will-maker in the presence of at least 2 witnesses who also signed), and the will-maker knew and approved of the contents of the will when signing and he or she had the necessary mental capacity to make a will at the time.

Although the need for strict compliance with statutory formalities has been relaxed by s. 58 of the WESA, the   need to prove that the will-maker knew and approved the contents of the will or other testamentary document or record and he or she had the necessary mental capacity when making the will remains firmly entrenched in the law.

Will-Making Capacity

The test for will-making capacity is not too onerous. Sufficient mental capacity may exist despite cognitive deterioration. The will-maker may have sufficient mental capacity even when his or her ability to manage other matters is impaired or compromised. Having a less than perfect memory is not sufficient to take away will-making capacity unless it is so great as to leave the person without a mind capable of making a valid will. The law recognizes that cognitive deterioration may still allow for short periods of lucidity when will –making capacity is present.

In order to make a valid will, the will-maker must have a “baseline level of mental acuity” or a “disposing mind and memory” which is sufficient to understand the nature and effect of making a will. This includes an understanding as to whether there are persons who would expect to benefit from the will-maker’s estate and the extent of the property of which he or she is disposing. The assessment as to whether the will-maker had possessed the needed mental capacity is a highly individualized question of fact to be determined in all the circumstances. A will-maker cannot be found not to have will-making capacity simply because the will leaves his or her estate in a manner that some people might think unkind.

The person trying to prove the validity of a will may be assisted by a presumption as to the validity of the will. If the will was signed according to the statutory formalities after it was read over by or to a will-maker who appeared to understand the meaning of the will, it may be presumed that the will-maker possessed will-making capacity and knew and approved of the contents of the will when making it.

What if there are Suspicious Circumstances?

The presumption of validity may be rebutted by evidence of well-grounded suspicious circumstances concerning the preparation of the will or tending to call into question the mental capacity of the will-maker at the time or tending to show that the free will of the will-maker had been overborne by acts of coercion or fraud or undue influence.

The standard of proof for establishing suspicious circumstances is a balance of probabilities (more than a 50% chance), which is the standard of proof that applies in civil (non-criminal) litigation.

In order to rebut the presumption of validity, persons attacking the will must demonstrate that there is some evidence which, if accepted, would tend to negate knowledge and approval or will-making capacity. It is important to remember that mere suspicion that something improper may have happened is not sufficient to rebut the presumption of validity; the evidence must raise a specific and focused suspicion. The absence of such evidence will be fatal to a suspicious circumstances argument.

Suspicious circumstances have been found in a wide range of situations which are not necessarily sinister in nature. There is no checklist of circumstantial factors that will invariably fit the classification. Commonly occurring themes include situations where a beneficiary is instrumental in the preparation of the will (especially where the beneficiary stands in a fiduciary position to the will-maker), or where the will favours someone who the will-maker had not previously provided for and does not fall within the class of persons that will-makers usually remember in their wills, namely next of kin.

The validity of a will does not stand or fall on the presence or absence of suspicious circumstances. If suspicious circumstances are established, the presumption of validity fails and the legal burden of proof reverts to the person trying to prove the will to establish the knowledge and approval of the will-maker as well as his or her will-making capacity if the suspicious circumstances had reflected on that capacity.

Admitting to Probate a Document or Record That Does Not Meet the Requirements of a Will

February 9, 2020

One of the most anticipated changes to B.C. estate litigation legislation was the introduction of s. 58 of the Wills, Estates and Succession Act [“WESA”], which allows the court to “cure deficiencies” in a will.  This permits the court to admit to probate a document or record that does not meet the technical requirements of a will.

Prior to the passing of WESA, will-makers were required to comply strictly with certain formalities relating to the execution and attestation of a will.  If these formalities were not met, the will was not valid, and the will-maker’s testamentary intentions would be defeated even if those intentions were clear.

Section 58 of WESA provides that the court may determine that a document or record (including an electronic record) represents the testamentary intentions of a deceased person, and order that it is fully effective as though it had been made as the will or part of the will of the deceased person.

For an order to be granted, the court must be satisfied that (1) the document is authentic, and (2) the document represents the deceased’s testamentary intentions.  The section does not require any minimum level of execution or other formality, although the further a document departs from the formal requirements the harder it may be for the court to find it embodies the deceased’s testamentary intentions.  Regardless of form, the document may be admitted to probate: a handwritten letter, unwitnessed and unsigned, an email, a text message or other instant message, a scribbled “to do” note, a draft Word document.

By way of recent example, in Bizicki Estate 2019 BCSC 2142 the court admitted three notes left by the deceased in his room stating his wish that his girlfriend receive the money in his bank accounts and other personal property.  Two of the notes were undated.  Two of the notes were unsigned.

In Hubschi Estate (Re) 2019 BCSC 2040, another recent court decision, the court admitted an entry found on the deceased’s home computer that read “Get a will made out at some point. A5 – way assets split for remaining brother and sisters. Greg, Annette or Trevor as executor.”

As a result, even when there is no formal will there may be a document or record which sets out the deceased’s testamentary intentions, which may be admitted for probate.  It is important to conduct a careful search of a deceased’s records, including electronic records, to locate any such document.

Testamentary Capacity – When is someone able to make a will?

February 4, 2020

Consider the following:  Your mother has always told you that she intended to leave her estate to you and your sister in equal shares.  However, when she dies a wills search reveals that she executed a will approximately one year before her death.  At that time, she was residing in a care facility, and was suffering from mild dementia (although her dementia got much worse in the period leading up to her death).  In this will, she leaves her entire estate to charity.  A noble act, but completely inconsistent with what she told you.  There is a previous will (before any degree of dementia), which distributes her estate equally between you and your sister.

A will-maker must have testamentary capacity

In order to make a valid will, a will-maker must have a baseline level of mental acuity sufficient to appreciate the nature and effect of the testamentary act, referred to as testamentary capacity.  If a testator lacks testamentary capacity at the time that he or she makes a will, then that will is invalid.

When it appears that a testator has left an unusual will, has excluded a beneficiary who ought to have been included, or has made changes to a previous will at a time when their level of capacity is questionable, then the issue of testamentary capacity should be considered.

If a will is held to be invalid because the testator lacked testamentary capacity, then the previous will – made when the testator still had capacity – would continue to be in effect (if such a will exists).

Test for testamentary capacity

The test for testamentary capacity is set out in Banks v. Goodfellow, a decision from the England Queen’s Bench from 1850.  This test continues to be applied today.  The test for testamentary capacity requires the following from the testator at the time the will is made:

  1. understanding the nature of the act of making a will and its consequences;
  2. understanding the extent of one’s assets;
  3. comprehending and appreciating the claims of those who might expect to benefit from the will, both those to be included and excluded;
  4. understanding the impact of the distribution of the assets of the estate; and
  5. that the testator is free of any disorder of mind or delusions that might influence the disposition of his or her assets.

If any of the above requirements are not met, then the testator lacks the capacity to make a valid will.

Otherwise incapable people may still have testamentary capacity

The issue of whether a testator has the capacity to make a will is a highly individualized and fact-specific inquiry, which will depend upon the circumstances of each case.

The test for testamentary capacity is a very specific test.  For example, it is not the same as the test for whether someone is incapable of managing their own affairs.  Although it is recognized that dementia can impair a testator’s mental powers such that he is not capable of making a will, a diagnosis of dementia, standing alone, does not automatically mean that a testator lacks testamentary capacity.  Similarly, a person who is declared incapable of managing his or her affairs pursuant to adult guardianship legislation or suffers a chronic psychotic illness such as schizophrenia may still have the capacity to make a valid will.  Isolated memory or other cognitive deficits on their own do not establish a lack of testamentary capacity.

The relevant considerations are those set out above, from the Banks v. Goodfellow case – the testator must appreciate the extent of her assets, the consequences of her will, and the effect of including and excluding certain persons who might expect to benefit from the will.

Timing is key when considering testamentary capacity

When considering whether a testator had testamentary capacity, timing is key.  The two relevant times are: (1) when the testator gives instructions to draft the will, and (2) when the will is signed.

There are cases in which a testator will have capacity to give instructions, but loses capacity before the will is signed.  In those cases, the will may still be valid so long as, at the time of execution, the testator was capable of comprehending that she was executing a will drawn in accordance with her previous instructions (when she had capacity).

Proof/evidence of testamentary capacity

How does one prove (or disprove) capacity?

Testamentary capacity is not a medical diagnosis; it is a legal threshold.  Accordingly, scientific or medical evidence – while important and relevant – is neither essential nor conclusive in determining the presence or absence of testamentary capacity.

The evidence of lay witnesses (such as the observations of family and friends at the relevant time) is often considered by the court when determining whether a testator had testamentary capacity.

Where available, the court will rely upon evidence from the solicitor who prepared the disputed will.  It is important that the drafting solicitor keep detailed notes when capacity is an issue – the will may not be disputed for many years after it is prepared, and the drafting solicitor may have prepared hundreds or even thousands of wills in the meantime, and he or she may have no independent recollection of the testator and the will that they prepared.  In that case, the drafting solicitor must rely upon the file and their notes.

If testamentary capacity is shown, that is not necessarily the end of the matter

Even if the requirements for testamentary capacity are met, there still may be other concerns surrounding the execution of the will.  In particular, where an individual’s mental capacity is diminished, he or she will be more vulnerable to undue influence.  A claim of undue influence can be made in addition to, or in the absence of, a claim that a testator lacked testamentary capacity.