Wills, Estates and Succession Act, SBC 2009, c.13, Part 4, Division 6 – Executive Summary
Like many commonwealth jurisdictions, British Columbia has dependent relief legislation, intended to ensure that a will-maker makes some provision for those dependent upon him or her. The manner in which the courts have applied the Wills Variation Act of British Columbia is, however, different from most other jurisdictions. As of March 31, 2014, BC’s Wills Variation Act was replaced with Part 4, Division 6 of the Wills, Estates and Succession Act (“WESA”). It is not expected that there will be any significant change to the manner in which the courts determine claims under the Act.
Persons Entitled to Make a Claim
Persons entitled to seek relief under the legislation are spouses and children of the will-maker. A spouse includes both married spouses and spouses who live in a marriage like relationship with the will-maker for at least two years and continue to do so at the time of death. Under new provisions of the WESA, married spouses who have been living separate and apart for at least two years, with at least one of them having the intention to do so permanently, are no longer entitled to apply. Non-married spouses cease to be spouses and cannot apply for relief when one or both spouses terminate the relationship. Children entitled to apply are biological and adopted children, and not step-children nor biological children who have been adopted out. It is immaterial whether a child is a minor or an adult.
When considering an application for an order under the legislation, the court may make such provision it finds “adequate, just and equitable” in the circumstances. In 1994, the Supreme Court of Canada decision set out the criteria to be applied in the case of Tataryn v Tataryn. The court must consider two types of obligations owed by the will-maker to the spouse or child:
“The first are the obligations which the law would impose on a person during his or her life were the question of provision for the claimant to arise. These might be described as legal obligations. The second type of norms are found in society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards. These might be called moral obligations, following the language traditionally used by the courts. Together, these two norms provide a guide to what is “adequate, just and equitable” in the circumstances of the case.”
- Legal Obligations Owed to a Spouse
To determine legal obligations owed to a spouse by the will-maker, the court turns primarily to family law. Until recently, support obligations and division of property were governed by the Family Relations Act. Under that legislation, only married spouses were entitled to share in family property, and that entitlement was generally one half of all assets used for a family purpose. Common law spouses might advance claims under common law, such as unjust enrichment or quantum meruit, but generally the courts have struggled with what legal obligation a will-maker owed to a common law spouse.
However, on March 18, 2013, a new Family Law Act replaced the Family Relations Act. Under this new legislation, both married and common law spouses are entitled to share in family property. Family property includes property acquired during the relationship, and any increase in the value of “excluded property”. Excluded property is defined as property brought into the relationship, gifts or inheritances received by a spouse, and property held in some discretionary trusts of which the spouse is a beneficiary.
While the new Family Law Act puts married spouses and common law spouses on an equal footing, the new regime for dividing family property leaves some uncertainty in determining what provision will be considered adequate to fulfill the legal obligation owed to a spouse under the wills variation provisions of WESA. Under the old Family Relations Act, it was reasonably clear that married spouses were generally entitled to receive, at a minimum, one half of the family assets. Under the Family Law Act, a more nuanced mathematical calculation will be necessary.
- Legal Obligations Owed to a Child
For minor children, the legal obligation is also generally found in support obligations under family law. The Family Law Act is unlikely to change the approach the courts have taken, which is to ensure the best interests of a child have been met. Beyond minority, there may be specific family circumstances requiring a will-maker to provide post-secondary education, or ongoing support for a disabled child.
For most adult independent children, there are no legal obligations owed by the will-maker, although there have been cases in which an adult child has successfully used the common law principle of unjust enrichment to establish a legal obligation.
- Moral Obligations Owed to Spouses or Children
The moral obligations owed to a spouse or child by a will-maker are, as noted by the Supreme Court of Canada, “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards”. It is an understatement to say that it is difficult to determine what those expectations and community standards may be at the will-maker’s death, and satisfying moral obligations can be one of the most challenging aspects in making a will.
Over the years, the courts have considered a number of factors in assessing the moral obligation owed by a will-maker to a spouse or child. These include:
- an assured expectation on the part of the claimant;
- an implied expectation, arising from the abundance of the estate or from the testator’s treatment of the claimant during the testator’s lifetime;
- bona fide expectation by the claimant to receive a benefit on death;
- the present financial circumstances of the claimant;
- the probable future difficulties of the claimant;
- a disability on the part of an adult child;
- the size of the estate and other legitimate claims;
- contributions by the claimant to the testator’s accumulation of assets;
- misconduct or poor character disentitling the claimant to relief;
- estrangement or a breakdown of the relationship between the testator and the claimant;
- childhood neglect by the testator linked to adverse circumstances for the claimant later in life;
- lifetime gifts or benefits outside of the Will; and
- unequal treatment of children.
Planning Options to Address the wills variation provisions of WESA
While the broad judicial discretion exercised under the wills variation provisions of WESA runs contrary to popular notions of testamentary freedom, the courts in British Columbia have consistently displayed a readiness to interfere with testamentary dispositions. How a particular Court will apply the legislation to an individual case is notoriously difficult to predict.
There are measures a will-maker may adopt to mitigate the potential effect of wills variation legislation. First, the Court is permitted to accept evidence of the will-maker’s reasons, so far as may be determined, for making certain distributions. A memorandum of reasons will not displace the Court’s jurisdiction to vary the will; however, a written statement of the reasons for provisions made in a will is generally accorded significant weight by the Court reviewing a claim by a disenchanted beneficiary. So long as the expressed reasons are “valid or rational”, BC’s Court of Appeal has said they should be given effect. “Valid and rational” reasons must be based on true facts, and logically connected to the act of disinheritance. The onus is on the claimant to show that those reasons were false or unwarranted.
Second, to the extent that property passes outside of a will, it is not subject to a wills variation claim. Planning options may include beneficiary designations, joint tenancy arrangements, trusts and gifting programs. Many of these strategies have tax implications, and all such planning must be carefully implemented with comprehensive legal advice. The lawyers at Horne Coupar LLP have the skills and experience to guide the will-maker to the most practical plan appropriate to his or her circumstances.