Resolving Ambiguities in a Will

Posted by Peter Roberts on February 19, 2013

Despite the intentions of a testator and the best drafting skills of their lawyer, there are often occasions when there is an ambiguity or apparent error in the resulting will.  These can be anything from small typographical mistakes through to directly conflicting descriptions of a testator’s assets, beneficiaries or wishes.  The difficulty for an executor is trying to determine exactly what was meant in order to properly administer the estate.  A failure to do so correctly may expose the executor to claims by disappointed beneficiaries.  The executor’s task is not made any easier by the fact that, more often than not, there is a time lapse of many years between the date the will was originally drafted and the date the ambiguity is discovered.  The testator is no longer around to ask and the executor is left to divine the true intent from the tea leaves of history.

One avenue of resolution is to seek the agreement of all the beneficiaries on the intended meaning.  However, this is can be difficult to obtain as there is often a division of view over what was meant: a division frequently underscored by the prospect of financial benefit.  In such cases, the only safe course open to an executor is to seek a declaration from the court on the construction of the will.

How will the court address such issues?  A recent case provides a concise example.  The testatrix owned a half interest in an apartment building which she left to one of her three adult children.  Though the apartment building had a single civic address, it was actually comprised of four separate legal titles.  The difficulty was that, in her will, the testatrix made reference to only one of the four parcel identifier numbers (PID) that formed part of each legal description for the land.  Elsewhere, she had used the civic address and made reference to the fact it was four lots.  She also set out reasons in her will why she favoured one child over the other two in bequeathing this half interest to that child. 

Given the value of the apartment building, it is little surprise that the other two children challenged an interpretation of the will that saw their sibling inheriting the entire interest.  They took the view that the bequest was ambiguous and either unenforceable or limited to one of the four legal titles.  The result, they argued, was that the remaining three lots were part of the residue of the estate to which they were entitled to one third shares.  The executor sought the assistance of the court.

When faced with such situations, the courts turn to well-established principles of construction.  First, the court will look at the language used in the will itself to see if the intention of the testator can be determined.  If that does not resolve any ambiguity, the court is entitled to look at the surrounding circumstances known to the testator at the time the will was drafted.  This involves a consideration of evidence extrinsic to the will as an aid in construction.  Such evidence is intended to explain what the testator has written, not what he or she intended to write.  As a result, the court will only consider certain types of evidence.  Admissible evidence includes things like a testator’s occupation and property; his or her financial situation; relationships with family and friends; and the natural objects of his or her grant in the will.  Inadmissible evidence includes notes or statements of the testator as to intention, or instructions given to a lawyer in preparing the will.  This distinction is intended to avoid other written or verbal statements of intent from hijacking or altering the intent expressed in the will.  It is the will alone that governs.

In the apartment case, the court looked at extrinsic evidence to find there was no ambiguity in the will and that its proper construction saw the entire interest in the apartment go to one child.  This was so because, despite the absence of three of the four PID numbers, the testatrix identified the property in the manner she always had: by the civic address.  She also mentioned the existence of four lots and gave reason in the will why she favoured a single child with this bequest.  The omission of three of the PID numbers was a “minor error”.  An ambiguity would only exist if the testatrix intended to identify her property by using PID numbers, technical numbers of which the court found she was “unlikely to have any knowledge or understanding”.  The inclusion of any PID numbers added no further necessary information to the will to make clear the testarix’s intent.

For any executor uncertain of a will’s meaning, this case demonstrates two things.  First, you can look at what the deceased knew and how they conducted their affairs at the time the will was drafted to help resolve any ambiguity.  Second, you can appropriately seek the assistance of the court to confirm that interpretation.  Lastly, the cost of doing so is properly an expense of the estate, particularly where the beneficiaries are not all in agreement over the interpretation. 

How Not to Deal with Family Discord when Helping an Infirm Parent

Posted by Peter Roberts on November 09, 2012

It is always a difficult situation when a loved one develops some form of dementia and gradually slips into incapacity.  It is even more troubling when well-meaning family members end up in a legal dispute over who should assume legal responsibility for the financial and personal care of the patient.  In recent years, Canadian legislatures have passed laws intended to make this troubled area easier to plan for and navigate.  In B.C., this has meant a complete overhaul of the Patients Property Act and the Representation Agreement Act.  These statutes, among others, provide several tools to help.  However, no matter how well intentioned these legal solutions may be, the underlying problem can still lead to bitter legal squabbles.

The recent decision in Dawes v. Dawes 2012 BCSC 1323 illustrates the unavoidability of such conflict, despite the use of the legislative tools available.  Mrs. Dawes had been slowly descending into dementia and placing greater strains on her husband’s ability to care for her and her financial affairs.  Though she had been struggling, at one point Mrs. Dawes arrange with a lawyer to sign a representation agreement that provided one of her three children, her daughter Ms. Davidson, with authority to be her representative and make the required health and financial decisions on her behalf.  Mrs. Dawes did not tell anyone else she had done this.  She took this step as, among other reasons, she was afraid her family would put her in a “funny farm” rather than care for her. 

Some time later, the family met to discuss how best to care for Mrs. Dawes in her worsening state.  The family was divided over what to do.  There were regrettable differences over what was in Mrs. Dawes’ best interests and who most accurately understood her likely wishes.  Ultimately, Mr. Dawes applied to court for a declaration that his wife was incapable of managing her person and estate and appointing him as committee.  The petition was opposed by Ms. Davidson on the grounds that she was the appropriate committee, having been appointed by her mother as her representative.

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The Difficult Problem of Disinheriting a Child

Posted by Peter Roberts on August 07, 2012

Many parents, late in life, come to realize that one or more of their children are not people they like or respect.  There are usually a myriad of reasons for this, the cause of which depends on who you ask.  But for the parent, their disappointment often leads them to consider making no provision for that child in their will.  To disinherit a child, often in favour of others, is emotionally trying and can be legally difficult to do.  Generally, contemporary social standards create a reasonable expectation, enforceable through the courts, that children will share equally in a parent's estate.  There have to be very good reasons for a disinheritance.  Further, to be effective, those reasons need to be recorded somewhere and will likely need to withstand subsequent legal scrutiny by the courts.

The difficulty is that once the parent is dead, a disinherit child can challenge the will under the Wills Variation Act and seek a share of the estate the parent intended to deny them.  Section 2 of that legislation allows the courts, in appropriate circumstances, to vary a will where it does not “make adequate provision for the proper maintenance and support of the testator’s . . . children”.  In such cases, the court may vary the will and “order that the provision that it thinks adequate, just and equitable in the circumstances be made out of the testator’s estate for the . . . children”.  A parent’s obligation to their child can be a legal or a moral obligation.  Only where there are circumstances that negate the existence of these obligations will the court decline to make some provision from the parent’s estate for the disinherited child. 

The question the court will wrestle with is whether there is sufficient reason for the disinheritance.  This is a factual inquiry and depends on the circumstances of each case.  However, one of the main considerations are the reasons given by the parent for the disinheritance, either as expressed in the will or elsewhere.  The reasons for disinheriting someone must be valid and rational at the time of the parent’s death.  Put another way, the reasons must be based in fact and there must be a logical connection between the reasons given and the act of disinheritance.  For example disappointment or disapproval of a child’s sexual orientation is not a justifiable reason to disinherit them.

An example of reasons sufficient to justify a disinheritance were recently found in a B.C. case.  The 63 year old son had been effectively disinherited by his mother.  The estate was left to his three sisters.  He sought to have the will varied.  The will had been made three years before the mother’s death.  While two earlier wills had divided the estate evenly, the final will gifted only $0.01 to the son because he had caused “untold unhappiness and expense” to his mother.  In addition to this note in the will, the mother left a lengthy, handwritten set of reasons justifying her conduct.

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The Court's Jurisdiction to Investigate the Competence of an Individual: Temoin v. Martin, 2012 BCCA 250

Posted by Peter Roberts on June 21, 2012

In an earlier blog I discussed a recent decision that recognized the Supreme Court’s ability, in appropriate circumstances, to order that an individual submit to medical examinations as part of the process of determining whether they were competent.  The case involved lay evidence of possible incompetence but the two medical opinions required under the Patients Property Act (the “PPA”) had not been obtained because the patient refused to cooperate.

The appeal decision from that case was recently released.  The Court of Appeal upheld the lower court’s decision and, in doing so, confirmed some important principles.

Firstly, the Court of Appeal reiterated the fundamental importance of personal autonomy.  The starting point is, therefore, a presumption that a patient has legal capacity.

Secondly, the Court recognized that there is no statutory authority to order medical examinations without consent or proof of incompetence.   They also noted that courts cannot exercise any inherent or parens patriae jurisdiction where to do so directly contravenes a statutory provision.  Parens patriae jurisdiction is a power exercised by the courts for the protection of those who cannot care for themselves.  It must be exercised in the best interests of the protected person and for their benefit or welfare.

Thirdly, and most importantly, the Court of Appeal confirmed that the parens patriae power may be used to order medical examinations where there is otherwise a legislative gap.  In this case, the legislative gap existed because none of the relevant statutory authority covered the situation of an individual who may be in need of the court’s protection but who will not cooperate in obtaining the statutorily required medical opinions.  The PPA mandates that before a declaration of incompetence can be made by the court, two medical opinions must be obtained confirming the patient is incompetent.  The Court of Appeal reasoned that in cases where there is an impediment to obtaining medical opinions (such as lack of consent) and the patient may be incapable of making free choices, they would be beyond the assistance of the court.  They have neither individual autonomy, nor the necessary protection. 

In such cases, the parens patriae jurisdiction may be invoked to order medical examinations, even where the issue of competence has yet to be determined.  Such authority is to be exercised cautiously and only on a proper evidentiary basis.  The onus is on the person seeking the medical examinations to establish a serious question over the competence of the patient.   The lower court described this as “prima facie proof of incompetence”.  The Court of Appeal declined to articulate the exact nature of the evidentiary standard to be met beyond noting it was “a high evidentiary threshold”.  This was because the exercise of the parens patriae power is discretionary and governed by the facts of the individual case. 

Lastly, the Court of Appeal affirmed the legal distinction between the test for establishing testamentary incapacity and the test for establishing incapacity to manage yourself or your affairs.  A person may be capable of making a will but incapable of managing themselves or their affairs.  On an application over their competence, it is the later test that is relevant.  Evidence about testamentary capacity may inform the decision but is not determinative.

This case provides important guidance for families struggling to deal with uncooperative or alienated loved ones who refuse the medical examinations necessary to get a protective court order.  In appropriate circumstances, and when presented with the right type of evidence, the court will order those medical examinations to take place.  The court will do so over the objections of both the patient and anyone else who opposes.

What is the Role of an Executor?

Posted by Peter Roberts on April 02, 2012

People are often asked, and frequently agree, to act as the executor of another’s estate.  This decision is generally made without an appreciation of what the executor’s role really is, particularly where there is a dispute over the Will.  Ordinarily, an executor is supposed to preserve the estate’s assets, pay the debts and distribute the balance to the beneficiaries entitled under the Will.  However, what is the executor to do when the beneficiaries have competing claims or the Will itself directs the executor to take an adversarial position?  The short answer is that the executor must remain neutral.  A recent B.C. case provides a sad example.

In Ketchum v. Walton 2012 BCSC 175, the court was asked to give directions to an executor on what he should do in a conflict between the disinherited children and the executor over the terms of the deceased’s Will.  Mr. Ketchum was estranged from his three children.  Two years before his death, he signed a Will that gave his entire estate to various friends and charities.  This was done intentionally so the children would inherit nothing.  The Will explained why this was so and specifically directed the executor to take an active role in defending any wills variation claim by the children.  The executor was authorized to deplete the entire estate, if necessary, to defend such a claim and ensure Mr. Ketchum’s intentions were carried out.

Following Mr. Ketchum’s death, his children commenced a wills variation claim challenging their father’s Will.  The named beneficiaries under the Will did not defend the claim.  This is understandable given that the bequests were either small (to friends) or to charities that are not in the business of fighting litigation over gratuitous bequests.  It looks bad.  As a result, the executor defended the claim but (wisely) sought a direction from the court with respect to the exact nature of his role in the wills variation claim.  This was prudent because an executor’s duty to specified and potential beneficiaries is neutrality.  In the eyes of the law, “it is a matter of indifference to the executor as to how the estate should be divided.”

In Ketchum, the executor argued that because none of the named beneficiaries were defending against the children’s claim, it was appropriate for him to do so, particularly where the Will gave a specific direction to that effect.  The court disagreed.  It held that the executor was to remain neutral and was to participate in the litigation only in a non-adversarial role as an amicus to assist the court in determining the merits of the wills variation claims.  The court went further to state that the clause in Mr. Ketchum’s Will directing the executor to fight the kids was void as contrary to public policy.  This was so because it purported to deny the children their lawful recourse to the courts under the Wills Variation Act. 

While it is always sad to find yourself in a position that leads to disinheriting a child, the take away from this case is that instructing your executor to take up the fight against disinherited family members puts the executor in an untenable position and will not be allowed by the courts. 

Mutual Wills: Are they Enforceable? A Recent Example: Re Wright Estate, 2012 BCSC 119

Posted by Peter Roberts on February 24, 2012

Mutual wills are a common estate planning tool.  Typically, a couple agrees to leave all or most of their estate to the surviving spouse, who then agrees to provide irrevocable gifts over to children.  Mutual wills are premised on an agreement between the spouses that following the death of one of them, the other won’t change their will to defeat their current joint intention.  The courts explain the doctrine of mutual wills af follows:

“Where the requirements for the application of the doctrine are satisfied, the survivor will not be permitted to defeat the agreement by revoking his or her will after the death of the other.  This result is achieved by the imposition of a constructive trust on the survivor’s estate for the benefit of those who were intended to benefit under the agreement.

The most fundamental prerequisite for an application of the doctrine is that there be an agreement between the individuals who made the wills.  It has been repeatedly insisted in the cases that:

(a) the agreement must satisfy the requirements for a binding contract and not be “just some loose understanding or sense of moral obligation;

(b) it must be proven by clear and satisfactory evidence; and

(c) it must include an agreement not to revoke the wills.”

This irrevocable aspect of mutual wills clashes with the general proposition that, if a testator is mentally competent, they are able to revoke their will.  Ordinarily, if one spouse dies leaving all to the other, then the remaining spouse is entitled to change their will to leave their estate, for example, to a second spouse instead of the couple’s children (subject to a probable Wills Variation Act claim). 

The problem of enforcing mutual wills arises most frequently where there are second marriages and children from the prior marriages.  In such cases, can a second spouse, who inherits all of their deceased spouse’s estate, then change their will to favour, for example, their own children over the deceased’s children?

If done properly, this type of scenario can be prevented and all the unpleasantness it brings avoided.  The recent decision in Re Wright Estate is a good example. 

In this case, Mr. Wright, a widower, brought considerably more wealth into his second marriage than his impecunious bride.  Both had children from earlier marriages.  Following their wedding, they retained a lawyer to assist with their estate planning.  Mr. Wright wished to provide for his second wife during her lifetime but leave the remainder of his estate to his children.  The second Mrs. Wright wanted the security of an income and a place to live during her lifetime, to leave her own children a small bequest and to have the remainder of Mr. Wright’s estate go to his children on her death.  

Following a number of well-documented meetings with their lawyer, the Wrights executed mutual wills which, among other things, committed each of them to irrevocably do certain things in reliance on the other’s promise to do the same.  In particular, Mr. Wright irrevocably agreed to register a life estate on his property in favour of his second wife, transfer certain RRIFs to her and grant her a life estate on his other assets.  The second Mrs. Wright executed a will which provided that the residue of her estate, after small bequests to her children, would go to her husband or his children if he predeceased her.  This bequest was expressly stated to be irrevocable and made in consideration for the transfer to Mrs. Wright of the life estate and RRIFs.

Mr. Wright later died.  The second Mrs. Wright changed her will to provide that her estate was to be divided equally between her children.  Mr. Wright’s children were to get nothing. 

Mr. Wright’s children then sought to enforce the irrevocable aspect of their step-mother’s previous will.  After commending the Wright’s solicitor for the detailed notes he took and the comprehensive advice given, the Court went on to enforce the irrevocable aspects of Mrs. Wright’s previous will.  Relying on his spouse’s promise to include in her will the irrevocably bequest to his children, Mr. Wright had transferred various assets and rights to Mrs. Wright during her lifetime.  This constituted evidence that there was an enforceable agreement between the Wrights which included a promise not to revoke her will.  In such cases:

“equity considers it a fraud upon the deceased, who has acted upon and relied upon the mutually binding nature of the agreement, for the survivor to change the will and break the agreement.  As the deceased cannot intervene to enforce the obligation, equity will enforce the survivor’s obligation, despite the survivor’s subsequent intentions.”

In many other cases, the courts have been unable to find the “clear and unequivocal” evidence needed to enforce the promise not to revoke a mutual will.  In this case however, largely because of the detailed notes of their lawyer, the Wrights were found to have gone “beyond trusting each would do the right thing or that each would provide fairly for the other’s children”: they were found to have entered into a binding, irrevocable agreement that the court would enforce.

If there is a cautionary note to be sounded, it is that a competent solicitor ought to be retained where the enforceability of mutual wills is an important consideration for a couple in their estate planning.  The evidence of that solicitor in subsequent legal proceedings may carry the day on whether the mutual will is enforceable or not.

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What To Do if You Think a Relative is Unable to Manage their Affairs

Posted by Peter Roberts on February 02, 2012

It is increasingly common for clients to ask what legal steps are available to help them care for aging parents or relatives.  Generally, they have a relative who is slowly slipping into dementia or some other incapacitating state.  In recent years, the law has done much to remodel the legal landscape to better address these types of situations.  There are new or revised statutes that govern things such as powers of attorney, representation agreements, adult guardianship, living wills and the like.  These are all tools that can help families and patients cope with difficult health care and capacity issues.

One of those tools, provided for in the Patients Property Act (the “PPA”), is the ability to apply to court to be appointed as a “committee” for an individual who has become incapable of looking after themselves or managing their financial affairs.  A committee has the full legal authority to look after the person and their financial affairs.  In order to obtain such an order, there must be written opinions from two doctors setting out their opinion that the patient suffers a mental incapacity that prevents them from looking after themselves or managing their financial affairs. 

However, problems can arise if, for some reason, the patient cannot to be examined by a doctor in order to determine capacity.  For example, the patient may refuse to go to a doctor or they may be under the influence of another who is preventing this from happening.  The PPA is very specific: without two medical opinions that the person is incapable, the court is legally unable to appoint a committee.  This can be very frustrating for family members.  In such a case, how can you compel a medical examination in order to determine capacity? 

One of those tools, provided for in the Patients Property Act (the “PPA”), is the ability to apply to court to be appointed as a “committee” for an individual who has become incapable of looking after themselves or managing their financial affairs. A committee has the full legal authority to look after the person and their financial affairs. In order to obtain such an order, there must be written opinions from two doctors setting out their opinion that the patient suffers a mental incapacity that prevents them from looking after themselves or managing their financial affairs.

However, problems can arise if, for some reason, the patient cannot to be examined by a doctor in order to determine capacity. For example, the patient may refuse to go to a doctor or they may be under the influence of another who is preventing this from happening. The PPA is very specific: without two medical opinions that the person is incapable, the court is legally unable to appoint a committee. This can be very frustrating for family members. In such a case, how can you compel a medical examination in order to determine capacity?

This was a problem faced recently by Lynn Temoin who had reason to believe her elderly father, Mr. Martin, was incapable and in need of protection. Her father, a man of considerable wealth, had remarried. His second wife persuaded Mr. Martin to revise his estate planning such that she and her children would benefit generously. Mrs. Temoin took the view that, at the time this was done, her father did not have the required mental capacity. Her problem was that she could not persuade her father to see a physician to get an opinion on his mental capacity. Without medical opinions, the court could not appoint a committee for Mr. Martin.

As a result, Mrs. Temoin applied to court for an order compelling her father to be assessed by two geriatric physicians for the purposes of providing opinions on whether he was competent. While this seems a sensible step, it is not one the courts are authorized by statue to take and one that the courts have always been very reluctant to order.

In deciding to grant this order, the court in Mrs. Temoin’s case provided a judicial precedent that will make it easier in future to seek such orders. The court relied on its inherent or parens patriae jurisdiction which provides it with the ability “to protect those who are unable to make decisions or to care for themselves.” That jurisdiction can only be exercised where there is no legislation governing the area. If there is a legislative gap, the jurisdiction can only be exercised in the best interests of the incompetent person.

Relying on these principles, the court found that there was a legislative gap in the PPA. The PPA does not authorize a court to order a medical examination where the person affected is uncooperative and it is impossible to obtain the necessary medical affidavits. Indeed, to order a medical examination conflicts with the fundamental principal of personal autonomy and the presumption of capacity. For example, the Adult Guardianship Act creates a legal presumption that every adult is capable unless shown otherwise. As the court noted, “given the presumption of competence, an individual should not be forced to undergo a medical examination that seeks to establish incapacity absent his or her consent.” “. . . [C]ompelling a person to submit to a medical examination is intrusive to personal autonomy and any order doing so would have to respect the values of the Canadian Charter of Rights and Freedoms.”

With this as the starting point, the court found that although there was insufficient “medical evidence” about Mr. Martin’s capacity, there was other evidence that did establish, at least at first instance, that he was incapable and at some risk. That evidence was from individuals who testified about Mr. Martin’s declining mental acuity and cognitive ability. It was compelling enough that the court found the “legislative gap” needed to exercise its parens patriae jurisdiction and order Mr. Martin to be examined. The “gap” existed between situations where the two required medical opinions were present (governed by the PPA) and situations where there was non-medical “‘proof of incompetence’ and where there is a compelling need for protection” (a situation the PPA does not address).

This is a very helpful decision to those who seek a committeeship order in the face of uncooperativeness or opposition. If medical evidence cannot be obtained, then other evidence of incapacity and the need for protection can be used as a means to obtaining the required medical evidence. This type of evidence can come from care-givers, relatives and family friends. If that evidence establishes that “the person who is the subject of the application is prima facie incompetent” and in need of protection, then the court may order medical examinations by two physicians to determine the medical question of capacity. Once that is done, the application for a committeeship under the PPA can be made. If appropriate, a committeeship order will be made.

Joint Tenancy and the Right of Survivorship

Posted by Peter Roberts on December 12, 2011

One of the most common forms of estate planning, particularly among couples, is not to have any plan at all.  That is often a very bad idea for a wide variety of reasons.  However, there are circumstances where it is a good idea and can avoid many estate problems.  This can be done by owning all assets in joint tenancy with your spouse.  Generally, when one of the joint tenants dies, the entire interest in those jointly held assets passes to the other joint tenant (or tenants, if more than one).  The jointly assets never become part of the deceased’s estate.  The benefit of this is that there is no need to probate the estate and there is no estate to become the subject of a wills variation action.

A recent example of this principle is the B.C. case of Kurmis v. Zilinski. Mr. Derby and his second wife held all their assets jointly.  The both contributed to and used these joint assets.  When Mr. Derby died, one of his adult daughters from a previous marriage sought to claim a share of those assets.  She said her father, who had never paid child support, had promised on her 16th birthday that he would provide for her in his will.  She sought a variation of his will and claimed the transfer of assets into joint tenancy with his widow amounted to a fraudulent conveyance.  The court held that a claim for reapportionment under the Wills Variation Act did not make the claimant a creditor under the Fraudulent Conveyance Act.  As a result, the transfer of assets into joint tenancy could not be attacked as a fraudulent conveyance because the daughter was not a “creditor”. 

That left the daughter’s claim solely as one under the Wills Variation Act.  The daughter argued that her father’s jointly held assets were subject to a resulting trust.  If so, the assets would be returned to his estate.  The question of whether or not a trust exists depends on the intention of the transferor.  Where the transferor, here the father, is dead, the courts often rely on legal presumptions to determine that intent.  These legal concepts are the presumption of resulting trust and of advancement.  The presumption of resulting trust can apply where a transfer is gratuitous.  If so, the transferred assets are subject to a resulting trust.  On the other hand, the presumption of advancement infers that the assets were given outright to the recipient.  It generally applies between spouses and children.

However, in this case the court did not need to resort to these legal concepts.  Instead, it was found that the deceased had not “transferred his interest (in the assets) into joint tenancy.  His interest was always one of a joint tenant . . .”.  The deceased and his wife had always held these assets jointly.   Because of the right of survivorship, all those joint assets became her property on Mr. Derby’s death.  They could not be the subject of a wills variation claim because they were never part of his estate.

Was it a Loan or a Gift? Does it have to be Paid Back?

Posted by Peter Roberts on November 23, 2011

In the undocumented world of family relations and finances, money is often provided by one person to another without the exact nature of the transaction being discussed, understood or documented.  Mum provides $20,000 to child to be used towards the purchaser of a house or to fund a year at school.  Granddad pays $15,000 towards a grandchild’s purchase of a business.  Is this money to be repaid?  Is it a gift?  Is it an investment in which the lender now has an interest?  These are common situations which often end in tears and acrimony.  “You were supposed to pay me back”.  “No, you gave it to me as a gift!” 

Quite frequently, the exact nature of what has taken place is not sorted out until one of the parties has died.  It becomes an issue a deceased’s executor must sort out.  One of the methods used by the courts to resolve disputes of this nature is the “presumption of a resulting trust”.  This is rebuttable presumption.  It provides that where an advance of money is gratuitous, the onus is on the person who received it to establish the donor actually intended it to be a gift, not a loan.  This is because the law presumes bargains, not gifts, even between family members.  If it is not proven to be a gift, then the money was received on a resulting trust, meaning it must be paid back.

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Can Step-children Seek to Vary a Will?

Posted by Peter Roberts on November 01, 2011

Earlier this year, I wrote a short blog on the right of step-children to claim an inheritance from a step-parent or step-grandparents. The upshot was that, absent a specific bequest in the will, step-children do not have a right of inheritance from a step-parent.  This conclusion was recently made even more forcefully by the B.C. Court of Appeal in the decision Peri v. McCutcheon, 2011 BCCA 401.  This case revisited earlier appellate authority holding that the word “children” in the Wills Variation Act was restricted to natural or adopted children, not step-children.  The decision has been the subject of considerable media attention, largely because the deceased step-parent was Herb Doman, the well-known B.C. business tycoon.

Ms. Peri sought to claim a share of the estate of Mr. Doman who had been her mother’s husband.  Ms. Peri’s mother and step-father were married when she was born, Mr. Doman was listed on her birth certificate and had signed immigration papers for her as her father.  Though Ms. Peri was sent to foster homes as a child, the deceased had provided consider financial support to her over her life time and maintained contact with her.  Ms. Peri argued that, in recent years, Canadian courts have taken a more liberal approach to remedial social legislation given the changes in contemporary standards.  She pointed to other circumstances in which courts expand traditional statutory definitions to protect spouses and children where the law had not done so previously.  She argued that if sufficient “indicia of a father-child” relationship existed, an enforceable legal relationship was created.  As support, reference was made to jurisprudence that took a contextual approach to imposing financial obligations on step-parents to provide for their step-children after a divorce.

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Would Cinderella Inherit?

Posted by Peter Roberts on August 24, 2011

If Cinderella had not married a prince, she might have cared a bit more about her legal status as a stepchild to her evil stepmother.  It is common ground that the relationships between stepparents and stepchildren can be difficult.  Vince Dixon of the Chicago Tribune recently provided saga guidance on how to mitigate some of those potential problems.  Communication is generally the key.  But for step-grandparents, the introduction of stepchildren into their lives is a matter generally beyond their control.  It is often a wonderful and vibrant experience but the legal consequences are not generally discussed.  How is an inheritance to be handled when a stepparent or step-grandparent dies?  What are the legal rights of step-children to inherit?

The short answer is: it depends.  The starting point is what the will says.  If the stepchild is specifically named and granted a bequest, they will inherit.  But what of the occasions where the bequest is more ambiguous, for example, where there is no specific bequest and the beneficiaries are referred to only as “my children” or “my grandchildren”.  In the past, Courts generally did not include in the definition of “child” or “grandchild” either illegitimate or stepchildren.  Thankfully, that rule has been somewhat relaxed to a rebuttable presumption in favour of legal descendants rather than an inviolable rule.  Now, in interpreting a will to see if stepchildren (grand or otherwise) are to inherit, the Courts will, where there is ambiguity, look to the context of the will and other external evidence that may assist in that interpretation.

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