In a recent British Columbia Court of Appeal decision, the court varied a father’s will to give both of his children equal parts in his estate.
Father Leaves Unequal Amount to Children
The testator was 85 years of age when he died in 2017. His wife, with whom he had a son and a daughter, had died in 2013, leaving her estate to the testator.
At the time of his death, the testator’s estate was valued at just over $1,900,000.
The daughter was in her late 50s and had two sons (the “grandsons”). She was disabled and could not work. As a result, she lived off a $706 per month disability pension from the Canada Pension Planand had relied on financial assistance from a friend.
The son was two years older and was disabled as a result of several motor vehicle accidents. He had no children. He did not work and also received a Canada Pension Plan disability benefit. However, with an investment income, his annual income was approximately $60,000. Additionally, as a result of property deals and investment opportunities facilitated by his parents, the son’s assets had a value exceeding $4 million.
In his will, the testator had divided the residue of his estate as one‑half to the son, and one‑half to be divided equally between the daughter and the two grandsons. This meant that the daughter and each grandson would receive one‑sixth each of the estate. As such, the son was set to inherit about $950,000, while the daughter and the grandsons were set to inherit $317,000 each.
The daughter brought an action to vary the will.
Lower Court Varies Will to Detriment of Son
At trial, the judge explored the reasons that had prompted the testator to give the daughter a relatively small share of the estate, compared to the share allocated to the son. He referred to evidence that the parents recognized that the estate should be divided equally between the son and daughter but had concerns that the daughter was unwise in matters of finance and may spend the money, and that the grandparents wanted to help the next generation.
However, the judge held that it was speculative to say that the testator had divided the daughter’s share into three out of concern she would waste the money. He observed that whatever intention was reflected in the testator’s will, it likely originated with the mother, who had been the couple’s decision maker, and said the will was likely in preparation before she died.
The judge turned to the question before him, which he characterized as whether the testator had met his moral obligations to his daughter. The judge observed that the testator owed no moral duty to his grandsons and said, as to the daughter’s moral claim on her father:
“[The daughter] has a strong moral claim on the testator. At the time of [the testator]’s death she was (and she remains) in dire need of support, and could be expected to remain in need for the rest of her life. Despite her efforts, she had not been fortunate in life, financially. [The son] was not in need at all. There was no sensible, rational justification for providing [the daughter] with such a small portion of the estate.”
Ultimately, the judge found that that the will had not made adequate provision for the proper maintenance and support of the daughter. As a result, he varied the will by reducing the son’s share by one‑third, ordering that the daughter was entitled to one‑half of the estate and awarding one‑twelfth to each of the two grandsons.
The son appealed the order, arguing that the judge had erred in his conclusion, erred in determining what would be adequate, just and equitable in the circumstances, and in particular erred in reducing the son’s share of the estate to benefit the daughter.
Court of Appeal Provides Equally for Both Children
The court began by explaining that the time at which the analysis must be performed is the date of death, not the date of making the will. While the testator and daughter had experienced a strained relationship in the past, they had a good relationship at the time of the testator’s death. As such, the court stated:
“This means that [the daughter]’s circumstances at the time the will was made … while perhaps explaining the will’s contents, are not relevant to the adequacy of the will’s provision for [the daughter] when [the testator] died.”
The court thus concluded that the testator’s will had not provided adequately for the daughter and a variation of the will was warranted. The question therefore became the appropriate division of the estate. While the court found that the trial judge’s order with regards to the grandsons fell in line with the testator’s wish to provide a gift of real value, it did not agree with the apportionment between the son and daughter. The court explained:
“In settling on a division of the residue, however, I consider that reducing [the son]’s share below that of [the daughter]’s impinges on the testator’s autonomy to an unnecessary degree. It was open to [the testator] to leave [the son] a sizeable share of his estate, even given the financial advantages [the son] gained outside of the will…. In my view, an equal division of the residue as between [the son and daughter], after allowing for the two bequests to the grandsons, will allow for an adequate, just and equitable provision for [the daughter]…. [T]his division leaves [the son] with nearly half the estate, provides a significant lump sum for the grandchildren, and allows for relief for [the daughter] from her ongoing straitened circumstances. Carefully used, this sum will allow for [the daughter]’s good housing and the necessaries of life for a considerable span of years.”
In the result, the court allowed the appeal, set aside the order, and substituted it for an order that the estate be varied to apportion the residue of the estate one‑twelfth to each of the grandson and the balance thereafter equally between the son and daughter.
Protecting your assets and ensuring your family and other loved ones are provided for in the future is not something most people want to think about. However, effectively managing your wealth and protecting your spouse, children, and your estate is something that everyone should do at some point to ensure that your express wishes are carried out.
An effective estate plan goes far beyond just creating a will. You should also consider securing other important legal tools including powers of attorney (for personal care and for property), trusts (including Hansen trusts if you have disabled children or other dependants), as well as the designation of beneficiaries on life insurance policies, pensions, and other key documents.
The best way to guarantee that your wishes will be carried out exactly as you would like them to is to consult with an experienced estate lawyer. At Campbells LLP in Oakville, our wills lawyers have been helping clients with Wills and estates matter since 1999. We will meet with you to help you clarify your long-term objectives and will create a personalized, effective estate plan designed to meet those goals. As your family grows or changes, we will ensure your estate plan is amended as required to ensure it continues to protect your ultimate objective.
At Campbells LLP, we are proud of the strong, long-lasting relationships we build with the clients for whom we craft Wills and estate plans. With our help, you can ensure that your family and loved ones are taken care of, that your wealth is distributed as you wish, and that the risk of any potential litigation is minimized. Our overall mission is to provide the right solution for each and every one of our clients. Contact us online or at (905) 828-2247 to learn more about our services.