League and Williams Lawyers

Tag: wills

  • Married or Divorced? It’s Time to Update Your Will

    Married or Divorced? It’s Time to Update Your Will

    Updating your will is very important after major life events like marriage or divorce. These changes usually impact your estate planning goals, and failing to update your will can lead to unintended consequences. When you get married, your priorities and beneficiaries often change. If you fail to revise your will, your assets might be distributed in ways that no longer reflect your wishes. This can create stress and conflict for your loved ones. By proactively updating your will, you can ensure that your estate plan aligns with your current priorities.

    Does Marriage Impact the Validity of Your Will?

    In the past, if a testator became married after executing their will, the marriage would automatically revoke the will. Under section 55 the Wills, Estates and Succession Act, a will is only revoked in certain circumstances. It must be clear that the testator specifically intended for the will to be revoked. This means that after your marriage, your estate plans will remain unchanged unless you make an updated will.

    While leaving your will unchanged may be appropriate for some, it’s common for estate planning goals to change as your family grows. For instance, you may wish to include your spouse as a beneficiary or appoint them as an executor or trustee. By updating your will, you ensure that your estate plan aligns with your wishes and provides for your loved ones.

    If you were married before WESA’s introduction in March 2014 and haven’t executed a new will, your will is still revoked under the old legislation.

    Separation and Divorce

    After a divorce or separation, gifts to an ex-partner in a will are automatically revoked. The remaining arrangements made in the will remain unchanged. Though this sounds convenient for those with simple estates, it remains important to update your will after a separation. Neglecting to update a will after a divorce can lead to several problems. For example, gifts may fall into intestacy if a will-writer doesn’t include a residuary clause. This may result in specific gifts going to beneficiaries who you may not have intended. For more on the rules of intestacy, see our blog post here.

    In British Columbia, people who live together for two or more years in a ‘marriage-like relationship’ are considered spouses for legal purposes.

    A divorce from a legal marriage is not the only consideration which may impact your estate plans. A breakup from a long-term separation may have a significant impact on your estate planning. If the relationship was considered “marriage like” under WESA, separating from your partner may have a similar effect to divorce. Couples are considered spouses if they have lived together in a marriage-like relationship for two years or more.

    Updating Your Will to Reflect a Relationship Change

    While it isn’t often at the top of people’s minds when entering a new relationship or separating from a long-term partner, estate planning is an important aspect of anyone’s plans for the future which must be given adequate attention.

    After a Marriage

    Depending on the nature of your relationship, the structure of your family and existing estate plan, the changes you might make to your estate plan after a marriage may vary, In general, the most common and important changes that people should consider after a marriage include: 

    • Including your spouse as a beneficiary of your estate;
    • Updating the guardianship of your children, if applicable; and
    • Making revisions to your executor, trustee and power of attorney appointments.

    Updating your will after marriage is crucial to ensure your wishes are respected, especially regarding appointments for a power of attorney and personal health representative. By updating your will, you can designate a trusted individual, usually your new partner, to make decisions on your behalf if you lose the capacity to do so.

    Mutual and Mirror Wills For Married Couples

    Spouses usually share a majority of their estate’s assets, and want to work together in their estate planning. Couples can create a mutual will or mirror wills to handle their estate in a way they both agree upon. If a couple decides to create a will jointly through either of these methods, it’s important to consider which one best suits your life, family, and estate planning goals. 

    A mutual will is a single will, created between two people. Will writers should be aware that you cannot change mutual wills after one of the spouses passes away. In some cases, one spouse goes on to remarry after the death of their spouse. If there is a mutual will in place, the spouse cannot go against the deceased’s wishes and change it. At first glance, this appears to be beneficial to both spouses writing the mutual will. However, it can create complications if the surviving spouse has more children after the death of their first spouse. Giving the new children an inheritance from the estate can be extremely difficult because you cannot change the mutual will.

    Mirror wills are two identical wills written by a couple. This differs from a mutual will because a mirror will doesn’t prevent someone from changing their will after the death of their spouse. With a mirror will, the surviving spouse could modify their will. They could disinherit or inherit people who the predeceased spouse would not have agreed with. The surviving spouse is in full control of the entirety of the estate. Spouses with mirror wills can’t be fully certain that their partner will honour their final wishes.

    After a Divorce or Separation

    Under section 16 of WESA, a gift, appointment or power given in a will to a spouse is automatically revoked upon divorce unless the will expresses a contrary intention. This means that, unless you explicitly state otherwise, any assets left to an ex-spouse in your will are to be disposed of according to the laws of intestacy or a residue clause as if the partner predeceased you.

    Although gifts in a will to your former partner are automatically revoked, it’s important to ensure that your precise testamentary wishes are reflected in your estate plan. For this reason, we recommend that people revisit their entire estate plan and reassess their estate planning goals after a separation. Similarly to those revisiting their estate plan after a marriage, those making changes after a separation should consider making revisions to the following at a minimum:

    • Beneficiaries of their estate;
    • Guardianship and custodial arrangements for their children, if applicable; and 
    • Appointments of executors, trustees, powers of attorney and personal representatives.

    If you had previously appointed a partner as your power of attorney, for example, and then divorce without updating your will before you die, you will not have a power of attorney prepared should you unexpectedly lose capacity.

    How to Legally Change a Will in British Columbia

    It is not complicated to execute a new will in British Columbia. Under WESA, when a testator creates a new will, any previous versions of their will are automatically revoked. However, it may be a good idea to inform your loved ones that you have created a new will to avoid confusion. If you are only making very minor revisions to your will, you may opt to use a codicil. This is a document that is attached to your will to make simple amendments to provisions within the existing document. It is usually advisable to create an entirely new will after a marriage due to the nature of the change in your succession plan which often results from marriage. A codicil is not an appropriate tool to amend an existing will if, for example, a couple chooses to have mutual or mirror wills or make arrangements for jointly owned property.

    Reminders for Will Writers

    Updating your will after marriage or divorce is important, and shouldn’t be overlooked despite the automatic protections under WESA. By making regular updates to your estate plan, you can ensure your wishes are clear and enforceable. This helps protect your assets and provides clarity for your loved ones. Whether it’s appointing a new power of attorney, updating beneficiaries, or making other changes, taking these steps now can prevent future disputes and simplify the probate and asset distribution process for your loved ones It can also ensure that, should you lose capacity unexpectedly, a trusted power of attorney or health representative is able to step in right away without waiting for a court appointment.

    If you’re ready to make an update to your will after a major change in your life, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • What is the Residue of an Estate?

    What is the Residue of an Estate?

    Almost every estate has some assets left after all the gifts have been distributed and estate expenses have been paid – this is called the residue of the estate. In some cases, the residue of the estate is the largest bequest of the will. Will-writers often name a residuary beneficiary to inherit the residue of the estate, whatever the amount may be. A frequent question that beneficiaries, executors and will-writers ask is ‘what exactly is included in an estate’s residue?’. In short, the residue of the estate is anything that is left after all estate debts/expenses/taxes have been paid and all the non-residuary beneficiaries have received their inheritances. It’s recommended that all wills include a residuary clause because there will always be some residue unless the estate is not solvent (not large enough to pay all of its debts).

    How to Calculate the Estate’s Residue

    While it’s impossible for a will-writer to come to an exact number for the value of the estate’s residue, they can make estimations. In general, the larger the estate is, the higher the estate administration expenses will be. Some of the most common expenses that must be paid before the residue of an estate can be distributed are:

    • Probate fees,
    • Debts owed by the estate such as credit card payments,
    • Taxes owed by the estate such as income tax in the month before death,
    • Executor’s fees,
    • Funeral expenses,
    • Legal expenses, and
    • Beneficiary bequests.

    Essentially, the residue of an estate is the entire value of the estate minus the above expenses (and any other estate fees).

    How Residuary Clauses are Used

    For example, a man with a total value of $100,000 in his estate wishes to gift his spouse, his two children and his sister in his will. He plans to give gifts of equal value to his children, a small gift to his sister, and the majority of the estate to his spouse. For simplicity, let’s say the estate expenses total $10,000. There are two possible ways the man could attempt to achieve his distribution goals using a residuary beneficiary:

    1. The man could have his spouse inherit $50,000 and the children inherit $20,000 each. His sister can then be named the residual beneficiary. When the man was writing the will, he assumed the estate fees would be closer to $1,000, but they ended up being much higher than he expected. In this scenario, the sister would be left with a $0 inheritance because of this residuary clause.
    2. The man could write specific bequests of $20,000 to each of his children and $10,000 to his sister. The man’s spouse can be named as the residuary beneficiary and would expect to receive $40,000.

    In both cases, one of the beneficiaries is left with a smaller inheritance than the man intended. The residuary clause is typically left for the largest bequest for this reason. In option (2), the spouse still inherits the majority of the estate as the residual beneficiary.

    Another option the man could consider if he is determined to ensure everyone receives a just share of the estate, he could name everyone as a residual beneficiary of the will. He could give the spouse 50% of the residue, the children 20% each and the sister 10%. However, this approach is only useful for simple estates of modest value.

    No Residual Beneficiaries

    As per section 44 of the Wills, Estates and Succession Act, when the will (a) doesn’t dispose of the entirety of the estate and (b) doesn’t name a residual beneficiary, the intestate beneficiaries would receive the residue of the estate. If there are no available intestate beneficiaries, the government would be given the residue. For more information on intestate succession, read our blog on how assets are distributed in intestacy. To prevent this from happening, will-writers should include a residuary clause at the end of their wills.

    If you’re a will-writer who is unsure how to handle the residue of your estate, contact an experienced estate lawyer today. We will ensure your will is properly drafted and executed as you’re expecting/intending.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Codicils: The Hidden Risks

    Codicils: The Hidden Risks

    It’s not uncommon for a will-writer to want to make a modification to an outdated will that they’ve written years ago. Often times, will-writers only want to make small changes to their will – maybe changing a single sentence in the will or adding a beneficiary to the will. You can use a codicil, usually a small document, to make amendments to a will. The document specifies any changes to the original will that the will-writer would like to make. Codicils can be suitable for simple modifications, but you shouldn’t use them when the changes are complex. It’s important to consider the legal implications when drafting a codicil, especially when attempting to draft a codicil without professional guidance. In this article, we’ll go over some of the common problems that can arise from implementing codicils into your estate plan.

    Codicil Basics

    A codicil is a document that allows you to make minor changes or additions to an existing will without having to create an entirely new will. Essentially, it serves as an amendment to the original will. People usually implement codicils for updating specific provisions in their will. Common reasons people use a codicil to update their will include:

    If you find yourself implementing multiple codicils, it may be time to draft an entirely new will.
    • Updating names of beneficiaries who have changed their name.
    • Changing your executor.
    • If you acquire a new asset and wish to designate a beneficiary for it.

    However, it’s important to remember that while codicils provide flexibility, they have limitations. Though a codicil is straightforward, it’s not always the best option for modifying your existing will. If you need to make complex changes, we recommend drafting an entirely new will.

    Codicils Can Hinder Your Estate Planning Goals

    Drafting unclear testamentary documents can expose the estate to risk of litigation. If your executor can’t specifically determine your testamentary wishes, they might distribute your assets in a way you didn’t intend. Further, beneficiaries can dispute the will, which can lead to lengthy litigation. Having imprecise testamentary documents will ultimately cause stress for your loved ones and can delay their inheritance. Codicils, while useful, can pose significant risks if not properly implemented. Here are some risks to consider:

    Legal Disputes: Interested parties may dispute the codicil in court if you haven’t executed it correctly. This can lead to lengthy legal battles, causing emotional distress and financial burden for the beneficiaries.

    Inconsistencies with the Original Will: A poorly drafted codicil may contradict the original will in unintended ways, leading to confusion and potential disputes. You must ensure the codicil aligns with the intentions you outlined in the original will.

    Misinterpretation of Intentions: Without clear language, a codicil may be open to interpretation. This could result in the estate being distributed in a way that the testator did not intend.

    Invalid Codicils: For a codicil to be valid, it must meet certain legal requirements, such as being signed and witnessed. The courts may deem the codicil invalid if it doesn’t meet these requirements. This may mean the codicil is set aside, or beneficiaries must apply to the courts to have the codicil cured into a valid testamentary document.

    Implementing Multiple Codicils

    A very common mistake is the addition of multiple codicils to your will over time. This can lead to a confusing patchwork of amendments that may contradict each other or the original will. It can also make the will difficult to interpret, increasing the risk of legal disputes. Undertaking proper execution and witnessing of each codicil increases the chance of error with each addition. Drafting a new will often becomes more efficient when there are multiple changes. This allows for a comprehensive review of the estate plan and ensures that all provisions are consistent and up-to-date. Remember, clarity is key in estate planning to ensure your wishes are carried out as intended.

    Preventing Codicil Complications

    Preventing complications with codicils involves careful planning and execution. Will writers should consider the following when implementing codicils:

    Proper Execution: Ensure that the codicil is executed correctly in order for it to be a valid testamentary document. The will writer and two witnesses must sign a codicil, just like wills.

    Consistency with the Original Will: Review the original will and the codicil together to ensure they are consistent and there are no contradictions. If a change is significant or complex, it may be better to create a new will.

    Using Clear Language: Use clear and unambiguous language in the codicil to ensure your intentions are understood. Ambiguities can lead to disputes and legal challenges, so include as much detail as possible.

    Professional Advice: Estate planning professionals can provide guidance on whether a codicil is the best option and ensure it is implemented correctly.

    Regular Reviews: Regularly review your will and any codicils to ensure they continue to reflect your wishes. Life changes, such as marriage, divorce, or the birth of a child, may require updates to your estate plan.

    Reminders for Will Writers

    Codicils may be the right solution for making minor amendments to your will. They offer a way to adjust your estate plan without having to rewrite your entire will. However, as we’ve discussed, they come with their own set of risks, especially when not properly implemented or when used multiple times in your will. 

    The key takeaway is this: always seek professional help when making amendments to your estate plan. Estate planning professionals can provide valuable guidance on whether a codicil is the best option for your intended changes, or if a new will would be more appropriate. They can also ensure that any changes are implemented correctly, reducing the risk of disputes and litigation after your death.

    Remember, your estate plan is a living document that should evolve with your life and circumstances. Regular reviews and updates, done with professional assistance, can help ensure that your wishes are carried out as intended and that your loved ones are protected. Estate planning can be complex, but with careful consideration and the right advice, you can navigate it successfully.

    If you’re ready to make updates to your will, or begin your estate planning journey from scratch, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Curing an Invalid Will: Acceptable Evidence

    Curing an Invalid Will: Acceptable Evidence

    A will is invalid in BC if it isn’t compliant with the formal requirements of the Wills, Estates and Succession Act (WESA).  In British Columbia, courts have the power to “cure” an invalid will which still represents the intentions of a testator. But how do the courts discern the true intentions of a testator with an invalid will? In this article, we’ll go over the principles surrounding extrinsic evidence interested parties can submit to support the court in curing an invalid will.

    Requirements Under WESA

    Under WESA, for a will to be valid in BC it must satisfy three requirements: 

    1. The will must be in writing;
    2. The will must be signed at the end, and;
    3. The will must be properly witnessed.

    According to WESA, the will-writer must sign the end of the will while in the presence of two or more witnesses in order to create a valid will. Basically, you must have two people witness you sign the last page of your will. Importantly, witnesses can’t be beneficiaries of the will, or the spouse of the will-writer. Further, the will must be in writing. A video or voice recording is not a valid legal will under WESA.

    Curing Invalid Wills

    According to s. 58 of the Wills, Estates and Succession Act (WESA), the courts have the ability to make a curative provision to an invalid will. Essentially, this means that if a will does not satisfy the above requirements, the courts can “fix” the deficiencies of the will and validate it. If a judge is satisfied that the owner wrote the will and it truly represents the owner’s intentions at the time of their death, they can cure the invalid will.

    The court uses medical records as evidence to understand the mental state of the will writer when they prepared a testamentary document.

    Evidence Used by the Courts to Discern a Will Writer’s Intention

    In the case of Hadley Estate (Re), 2017 BCCA 31, the judge discussed the difficulty of discerning if a non-compliant document expresses the testamentary intentions of its writer. This is because, obviously, the person most able to express those intentions has already passed away. Invalid wills, drafted without a lawyer’s help, are more likely to be unclear in their use of legal language. Because of these challenges, interested parties are able to submit extrinsic evidence to aid the courts. Extrinsic evidence can be almost any material which relates to or demonstrates the will writer’s testamentary intentions.

    Examples of Evidence

    In curing a will, the court aims to ensure that, even though the document is invalid due to WESA non-compliance, it still expresses the fixed and final testamentary wishes of its writer. To demonstrate that the will should or should not be cured, evidence that could be submitted includes:

    • Personal Letters or Emails: These can provide insight into the will writer’s relationships and their intentions for their estate. For example, a family member receives a letter discussing the writer’s wishes for them to receive specific assets.
    • Audio or Video Recordings: Recordings where the will writer discusses their estate plans can be powerful evidence. However, the recency and context of the video recording will determine the value of this evidence.
    • Financial Documents: Bank statements or other financial documents can show patterns consistent with the will writer’s stated intentions. For example, regular payments to a charity that the will writer wished to leave a bequest to could confirm a clause making a large donation in an invalid will.
    • Witness Testimonies: People who were close to the will writer can testify about conversations they had regarding the will. A friend could testify about the testator’s relationship to their family members and any comments they might have made about their testamentary wishes.
    • Medical Records: These can help establish the will writer’s mental capacity at the time the will was made. This could include a doctor’s report stating that the will writer was of sound mind when discussing their estate plans.
    • Diaries or Journals: Personal writings can reveal the will writer’s thoughts and intentions about their estate. For instance, a journal entry where the will writer discusses their reasons for wanting to disinherit a particular family member.

    Examples of Evidence from Case Law

    An Unsigned Handwritten Note

    There are numerous examples in BC case law which demonstrate admissible extrinsic evidence to support the courts in curing a will. In the recent case of the Skopyk Estate (2017), a will writer told his family that his will from 1995 didn’t express his current wishes, and that he was working on a new one. He passed shortly after, but family found an unsigned handwritten document in his apartment after his death. Even though the document was unsigned, the court cured the document based on the following extrinsic evidence:

    • The document was placed somewhere it could be easily found after the death of the will writer;
    • The estate distribution set out in the document was rational based on it’s exclusion of a beneficiary of the 1995 will who had since died;
    • The document referenced the 1995 will, and even clarified a typo from that old will;
    • The deceased had told family numerous times that he was trying to update his 1995 will before passing; and
    • The distribution in the document matched the wishes he had communicated to his family while in the hospital before someone found the document.

    Based on the above evidence, the court found that the note was a deliberate expression of the deceased’s final wishes. The court ordered that the document was a valid alteration to the pre-existing 1995 will.

    A Document Labelled “Will” Stored With Valuables

    In Dickinson-Starkey Estate (Re) (2022), the deceased’s nephew sought legal assistance in locating his uncle’s valid will. There was no notice of will in force, and no document was found. He gained access to his uncle’s house using a neighbour’s spare key, and found a folder labelled “will” with the deceased’s name and address. The writer had stored the folder with items including antiques, family photos, expensive liquor, crystal and china. The document was lengthy and detailed, and clearly intended to serve as a will. However, the court couldn’t cure it under s. 58 based on the following discrepancies:

    • There were a number of handwritten notations and changes on the types document, indicating that it was still a work in progress;
    • The deceased did initial some pages, but there was no signature;
    • No one was given a copy or told specifically about a new will;
    • The deceased spoke frequently about his will, but had not taken any steps to finalise this new document, indicating it is not an expression of fixed and final intentions;
    • The deceased indicated he was still preparing his will in November 2017, and the document found in his home was dated July 2017;
    • There were clauses in the will which were inconsistent with one another.

    On the balance of probabilities, the court couldn’t determine that the deceased intended the document to express his fixed and final intentions. The deceased was likely still considering the contents of the document at the time of his death. Unfortunately, this meant that the estate had to be distributed according to the laws of intestacy, as the deceased had not written another will.

    Reminders for Will Writers

    Even though beneficiaries may have recourse if WESA finds your DIY will to be invalid, it’s always best to have a valid will in the first place. The process of applying to have a testamentary document cured under s. 58, gathering evidence and presenting it to the court can be time consuming and costly for loved ones. It is always best to seek legal advice when preparing your will, at least to ensure that it is valid under WESA and can be easily probated and executed after your death. If you have questions about the validity of your DIY will, or are ready to start your estate plan from scratch, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Probate: Getting a Grant of Probate for an Estate

    Probate: Getting a Grant of Probate for an Estate

    Understanding probate is important for will writers, estate executors and beneficiaries alike. It is a legal procedure that validates a will and authorizes the distribution of an estate under the supervision of the executor. This process ensures that the deceased’s assets are distributed correctly and legally to the beneficiaries. However, navigating estate administration can be complex and time-consuming, often leading to confusion and stress for loved ones during an already difficult time. Understanding probate is important because it can have an impact on the value of your estate, the responsibilities of your executor, and the time it takes to distribute assets to beneficiaries.

    What is Probate?

    Probate is a legal process that takes place after someone passes away. It’s like a green light that allows the executor to carry out the deceased’s wishes as stated in their will. During probate, the courts confirm that the will is valid and legally binding. The executor then has the authority to gather the deceased’s assets, pay any debts or taxes, and distribute the remaining assets to the beneficiaries. This is important because it helps prevent fraud and ensures that the deceased’s assets are distributed correctly. It’s a way to make sure that everything is done fairly and legally, and improve transparency. In British Columbia, probate is required when the deceased’s estate is valued over $25,000.

    Who is Involved in the Process?

    The probate process can involve several people. The most important is the executor, the person named in the will to administer the deceased’s estate. The executor must apply to the courts for a grant of probate. If there’s no will, or if the named executor is unable or unwilling to act, the court can appoint an administrator to perform these duties. Other parties involved may include creditors, who have claims against the estate, and legal professionals, who can provide guidance and assistance throughout the process.

    Probate Timeline for Estate Administrators

    The timeline for probate can vary greatly, typically ranging from a few months to over a year. In general, probate takes about six months. This timeline depends on several factors:

    • Complexity of the Estate: Larger estates with numerous assets and beneficiaries can take longer to process.
    • Existence of a Will: If the deceased left a valid will, the process is usually quicker.
    • Disputes: Any disputes or challenges to the will can significantly delay the process.
    • Debts and Taxes: The executor must settle all debts and taxes before distributing the estate, which can take time.
    • Court’s Schedule: The court’s workload and efficiency can impact the timeline.

    It’s important to note that while the probate process can be time-consuming, it’s a necessary step in ensuring the lawful and fair distribution of the deceased’s assets.

    Key Takeaways

    • Probate is necessary: It validates a will and authorizes the distribution of an estate.
    • Executor’s role is crucial: The executor administers the deceased’s estate, including settling debts and distributing assets.
    • Timeframe can vary: The probate process can take from a few months to over a year.
    • Disputes can delay the process: Any challenges to the will can significantly extend the probate timeline.

    If you have concerns about the grant of probate of an estate you’re administering or have an interest in, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • What is a Testamentary Contract?

    What is a Testamentary Contract?

    A testamentary contract allows a will writer to leave their estate to another person in exchange for something. Usually, this comes in the form of services, like end of life care for the will writer. A testamentary contract is a binding contract. A will writer will not be able to change the beneficiary of the assets after agreeing to the contract. Testamentary contracts can often give rise to estate litigation, for a number of reasons. In this article, we’ll cover the basics of testamentary contracts and problems that can arise from them in your estate plan.

    Basics of the Testamentary Contract

    When a will writer enters into a testamentary contract, they are agreeing to give their estate, or a specific asset to a specific person. If they later change their will to deprive this person of the assets promised in the testamentary contract, the beneficiary can sue for breach of contract. If they are successful in proving the existence and breach of a testamentary contract, either before or after the death of the testator, the Courts can enforce the contract by varying the will.

    Common Problems

    It is not uncommon for testamentary contracts to take the form of a verbal agreement. The most common problem litigants face in enforcing a testamentary contract is proving the existence of the contract to the Courts. This exact problem came before the B.C Supreme Court in the 2022 case of Angelis v. Siermy. 

    Without a clear record of a testamentary contract, it is up to the claimant to prove beyond a reasonable doubt that there was an agreement.

    In this case, a woman with no children left the majority of her high-value estate to one of her nieces in a 2002 estate plan. Years later in 2011, the aunt changed her will to give most of her estate to a different one of her nieces. The first niece, the claimant, alleged she had an oral testamentary contract with her aunt. In the alleged agreement, the aunt promised the majority of her estate to this niece in exchange for several years of unpaid end of life care. She claimed that the execution of the 2011 will breached this agreement. 

    Somewhat unusual in estate litigation, the will writing aunt was still alive when her niece brought this claim. The aunt denied the niece’s claim that they had a testamentary contract or even a verbal agreement, though neither parties had witnesses to support their claims. The claimant provided the Court with letters allegedly written by her aunt which explained her reasons for executing her 2002 will. The aunt denied writing these letters and, ultimately, the Court found that the claimant had forged two of the letters she submitted as evidence. The Court stated there wasn’t sufficient evidence that a testamentary contract ever existed between the two parties, and the claim was dismissed. 

    Key Takeaways

    Testamentary contracts are not uncommon in estate planning, as will writers promise loved ones certain assets in exchange for end of life care or other services such as home maintenance. However, people entering into these agreements should clearly document that there is an exchange of estate assets for services or other consideration. It is also advisable to ensure that other parties are aware of the will writer’s intention to exchange specific assets for services from a beneficiary. Having a record of the agreement which can be supported by witness testimony will ensure that the Courts can enforce a testamentary contract, even after the death of the will writer. 

    If you have questions about giving estate assets to a beneficiary in exchange for services, or if you are concerned that your testamentary contract won’t be honoured by a will writer, contact an experienced estate lawyer today.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com. 

  • Estate Litigation- Who Pays the Legal Costs?

    Estate Litigation- Who Pays the Legal Costs?

    Estate litigation can be a complex and expensive process. Understanding the legal costs involved is crucial for both executors and beneficiaries facing litigation or those considering raising a claim. In this article, we’ll take a look at how B.C. Courts usually determine who is responsible for legal fees.

    What are Litigation Costs in Estate Disputes?

    When a Court assigns ‘costs’ to one party, they are ordering them to pay for the other party’s legal expenses. These can represent the expenses of legal advice and representation and court fees related to the case. Ordering costs provides compensation for the winning party for the time spent on the issue, encourages settlement and can discourage frivolous lawsuits.

    There are two types of litigation costs which a Court can assign in British Columbia. The first is known as ‘part and party costs’. These are calculated based on a set of rules set out by the B.C. Supreme Court. These rules consider the complexity and social importance of the case, and the amount of time spent in trial. These fees place the winning party in the financial position they would have been in if they hadn’t had to litigate.

    Litigants must be aware that fees can add up quickly during lengthy court battles.

    Another type of litigation costs the Court can award are called ‘special costs’. These are only awarded in unusual circumstances. Special costs are aimed at compensating a winning party where the other party has behaved inappropriately. For example, if the losing party engaged in fraud or harassment in the course of their litigation. These fees are usually above and beyond the actual legal fees incurred by the winning party. Litigants can apply to the Court to be awarded special costs if they feel the other party has behaved truly reprehensibly.

    The Courts’ Approach

    Generally, in all types of litigation, the Court will assign the costs of legal fees for both parties to the “losing party”. In some instances, there is no definite winner or loser of a case, but blame for the issue is apportioned between the parties. Above all, the rule for assigning costs is that they are “in the cause” of the litigation. This means that the party who ’caused’ the legal fees, whether by bringing a frivolous lawsuit or by their actions which gave rise to the litigation will be responsible.

    I’ve Been Awarded Litigation Costs- When do I Receive Funds?

    Given that litigation expenses are usually assigned to the losing party, expenses are assessed at the end of a case. If a case goes to trial, a Judge will usually make an order for costs in their final decision. If a case has reached a settlement before trial, a settlement agreement will usually provide details on how and when litigation expenses will be assessed. Once you have received an order, you can arrange to speak with the registrar. The timeline for receiving payment for legal expenses varies from case to case.

    If you have questions or concerns about a potential estate litigation case, contact an experienced estate lawyer today.

  • Estate Planning: Trustees and Beneficiaries

    Estate Planning: Trustees and Beneficiaries

    We’ve recently come across the following question on a Canadian personal finance group: “Is there someone that could chat with me about naming a minor beneficiary (under age) with a trustee, vs naming the person I would use as a trustee as a beneficiary?” In this article, we’ll break down the question and legal answers in simple terms.

    What is a Beneficiary?

    In the estate planning context, a beneficiary is an individual or entity, like a charity, designated to receive assets in a will. They receive the specified assets according to the terms of the will. Anyone can be a beneficiary, but will writers should be advised that some provinces require that dependents such as children (and adult children) are provided for adequately in the will. 

    What is a Trustee?

    A trustee is a person appointed to manage and give out assets on behalf of a beneficiary and on the terms of the will. The trustee has a duty to act in their best interests. Trustees can be individuals, such as family members or friends, or professional entities like banks, accountants or lawyers. Their responsibilities may include investing and managing assets, distributing income or assets to beneficiaries, and ensuring compliance with relevant laws and regulations.

    Will writers can specify terms for how and when their beneficiaries receive their inheritance funds. This is especially common for inheritances going to young people.

    Naming a Would-Be Trustee as a Beneficiary

    There are a number of key differences between beneficiaries and trustees which are relevant to this question. The most important difference is their relationship with and responsibility to the estate. Because trustees have a duty to beneficiaries to protect the assets and give out their inheritance on the terms of the will, naming a would-be trustee as a beneficiary will not save you any time or money. The would-be trustee would likely be found to hold the asset on constructive trust if you have made your intentions for the asset clear, meaning it makes little difference to name them as a beneficiary rather than trustee. In fact, it could give rise to litigation over the assets in the long-run or risk mismanagement of the assets. 

    Naming a would-be trustee as a beneficiary of assets with the intention of those assets to ultimately go to another person is not an effective way to bestow a gift in your will.

    Handling Estate Inheritance to a Minor Beneficiary

    Estate planning for those with minor children, dependents or loved ones can feel complicated or stressful. While you may want to ensure their financial well-being after your passing, many people worry about entrusting a lump sum of funds or a high-value asset to a young person who might not be ready to maximize the benefits of such a gift. Fortunately, estate planning lawyers can use a variety of tools when crafting a will to ensure that you pass down assets to minors exactly as you intend. The most common tool is the trust, which holds assets for beneficiaries on specific terms decided by the will writer. The trustee actively manages the assets and cares for the beneficiary until transferring the trust assets to them.

    A typical provision in BC wills contains instructions for handling estate shares designated for a minor child. For example, it may state that inheritance minors will be held on trust, paying out fully when they are older. Other common clauses might include instructions to pay out when the child graduates university or buying a home. Using the trust, the will writer has control over how and when the minor beneficiary will receive their inheritance.

    Appointing a Trustee for a Minor Beneficiary

    When creating a trust for a minor, it’s a good idea to choose a trustee who knows them well. Some will writers choose to hire a professional trustee to oversee the assets and release the trust funds. Naming your potential trustee as a beneficiary can complicate expressing asset management wishes in the will. This might necessitate separate documents for clear terms between the trustee and ultimate beneficiary. 

    Naming a minor beneficiary in a will and appointing a trustee is a common part of the estate planning process. If you’re looking for guidance on estate assets going to a minor beneficiary, contact an experienced estate planning lawyer today.

  • What are the consequences to Executors for breaching trust?

    What are the consequences to Executors for breaching trust?

    Executors have a duty to act in the best interests of the estate and its beneficiaries. Occasionally, executors act in breach of this trust, often accidentally. However, there are ways in which courts can impose penalties for executors breaching trust. Overall, executors have an obligation to administer the estate in a timely manner, in the interest of the beneficiaries. To summarize, some of the most common ways an executor is found to be in breach of trust include:

    • Commingling of estate assets with their own personal assets,
    • Fraudulent behaviour,
    • Not accurately reporting an estate’s assets in the detailed accounts, or
    • Failing to pay an estate’s debts.

    Depending on the severity of the breach, courts can choose a consequence to remedy the losses suffered by beneficiaries. Possible consequences that the courts will consider are:

    • Reducing or eliminating Executor’s fees;
    • Holding Executors personally liable for losses; and/or
    • Removing and replacing the executor.

    Removing Executor’s Fees

    Generally, executor’s fees cannot total more than 5% of an estate’s value.

    In cases of a minor breach, the courts may simply deny the executor from receiving compensation through executor’s fees. For example, if an executor were to act slowly and fail to administer the estate in a reasonable amount of time. The courts could find the executor failed to fulfill their duty by administering the estate in an untimely manner.

    In the case of The Estate of Lilian Lai Lien Lowe (2002), the executor was denied any compensation for her duties. Unfortunately, under the executor’s administration, the estate lost a considerable amount of money which obviously impacted the welfare of the beneficiaries. Further, the executor was looking to charge a fee much greater than the usual 2-3% of the estate’s value. Summing up, the judge stated that the executor “has demonstrably failed to exercise an appropriate level of skill and ability. Because the executor failed to fufill her duty, the fee was distributed to the beneficiaries of the will instead.

    Executors Held Personally Liable for Breaching Trust

    Occasionally, executors find themselves responsible with selling assets or making investments on behalf of the estate. Undoubtedly, all investments carry a risk of loss. However, if the executor makes an investment that a reasonable person wouldn’t have, the executor can be liable for the losses. If the investment was reasonable and simply happened to result in a loss, the executor will not be liable. To put it another way, the executor must act in a demonstrably irrational manner to be held liable for losses to the estate. The courts will typically only order this if the executor has caused the beneficiaries to suffer a significant loss.

    Removing the Executor

    Importantly, in extreme cases where executors are found in breach, the courts can order the removal of an executor. According to the judgement in Nieweler Estate (Re) (2019), there are four categories of conduct that will warrant a removal of an executor:

    1. Endangerment of the trust property (estate);
    2. Dishonesty;
    3. Incapacity to execute the duties; and
    4. Lack of reasonable fidelity (good faith).

    In general, executor removal is a last resort for the courts because it inherently contradicts the final wishes of the testator. An executor will only be removed if the courts see no other option to resolve the estate administration issue at hand. If you’re looking for more information, read our past blog post on executor removal here.

    Ultimately, it’s at the discretion of the courts to determine how to handle an executor who has breached their trust. In some cases, multiple consequences are ordered against the executor of a will. To avoid this, executors must work quick and with the best interests of the beneficiaries in mind – hiring an estate lawyer can help to ensure that all the proper procedures are followed.

    If you’re a beneficiary who has fallen victim to an executor who has breached your trust, contact an experienced estate lawyer today. We can ensure that the proper steps are taken to ensure that you’re compensated for any losses suffered and the estate is administered appropriately.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Court of Appeal Changes Will After Death of Will Writer

    Court of Appeal Changes Will After Death of Will Writer

    The recent BC Court of Appeal case of Tom v. Tang (2023) demonstrated again that BC Courts are willing to change the contents of a will under the Wills, Estates and Succession Act (WESA). In this blog, we’ll cover the Court’s decision and the steps will writers can take to avoid estate litigation.

    Facts of the Case

    In the recent case of Tom v. Tang, three siblings claim that their mother’s will is unfair. The will left equal shares of the estate to the five children. However, the sale proceeds of her house were only left to two. The result was that 85% of the estate’s value was left to only two of the five children. Ms. Tang gave the proceeds of the home to the two children in recognition for their contribution to her care in the final years of her life. 

    The three siblings who received lower inheritances claimed the will was unfair and should be varied by the Courts. The siblings who received larger inheritances argued that the Court must enforce the wishes of the will writer, Ms. Tang. 

    The Court’s Decision

    Siblings are frequently party to estate disputes, either raising claims against or defending the validity of their inheritance.

    The Court considered the testamentary wishes of the will writer and the rationality of the contested provision. Ultimately, the Court found that the division was unfair or irrational under WESA. Considering each child’s contributions to the family during their adult life, a more equal division would be reasonable. The Court rewarded the two siblings 30% each of the estate’s total value, and about 14% to each of the remaining three children. This balanced the fair division of assets to each child while acknowledging the will writer’s intention of rewarding the two siblings for their extra efforts.  

    Varying a Will Under WESA

    In British Columbia, WESA regulates estate distribution and planning.  Under WESA, Courts can change the provisions of a will to benefit family members that were excluded or treated unfairly. Section 60 of the Act allows interested parties, such as children or spouses, to challenge an unfair will. However, not just anyone who feels they should have been included can contest a will. For more on eligibility for challenging a will, check out our previous video blog by Darren Williams.

    The Act requires will writers, or testators, to provide adequate maintenance for interested parties. There are a limited number of reasons that a testator can validly exclude, for example, a child from their will. If a dependant hasn’t been provided adequate provision in a will, they may be able to raise a claim. 

    Steps to Avoid Potential Estate Litigation

    There are steps that testators can take to ensure their will is WESA compliant and potentially avoid litigation. First, testators should ensure that they carefully consult with an estate lawyer when planning and writing their will. The benefit of drafting with a lawyer over doing it yourself or with a notary is that a lawyer can foresee potential legal issues which may cause litigation later on. Being able to identify common pitfalls and predict problems in your estate plan can save time, money and stress.

    Second, testators should ensure that they are very clear with their intentions when giving large gifts during their lifetime. This can include cash gifts, real estate or valuables which many family members may have a special interest in inheriting. By ensuring that they record all gifts in writing and expressly state that the transfer was a gift, testators can avoid ambiguity. Working with a lawyer to record your intentions for large transfers can help to avoid undue influence or testamentary incapacity claims. If the intention to gift is unclear on large gifts, potential beneficiaries may claim the transfer was not a gift on the basis of resulting trust or the testator’s legal capacity to make the transfer. 

    If you’re looking for specific advice on how to reduce risk of litigation arising from your will, contact an experienced estate lawyer today. We’ll help create an estate plan for you unique situation and needs.