Tag: BC’s Wills Estates and Succession Act

13 Aug

More Rectification: Righting Wrong Writing

Paul Emile Trudelle Wills Tags: , , 0 Comments

Last Friday I blogged on a rectification decision out of B.C. That case, Re Jamt, was applied in an even more recent decision on rectification, Simpson v. Simpson Estate. There, the judge (who was the same judge as in Re Jamt,) observed that  Re Jamt appears to be the sole decision considering the rectification provisions of B.C.’s Wills, Estates and Succession Act.

In the more recent decision of Simpson v. Simpson Estate, the deceased’s will provided that his shares in a corporation were to go to his two adult children. The rest of the estate passed to the deceased’s second wife. However, the shares were subject to a shareholder agreement, and the co-owner exercised his right to purchase the shares from the estate pursuant to the shareholder agreement. The deceased’s second wife, who was also the estate trustee, then took the position that the gift of the shares failed by reason of the operation of the shareholder agreement and the fact that the shares could not be transferred to the children.

The children applied to rectify the will. They asked that the will be rectified by adding a provision to the will so that the shares or the fair market value of the shares as received pursuant to the shareholder agreement passed to them.

The court granted the rectification sought. Extrinsic evidence from the deceased’s instruction meeting with the drafting solicitor was reviewed. The court concluded that;

“In my view, it is a reasonable inference that, since [the deceased] wanted [his children] to have the Shares, it is more likely than not that he also wanted them to receive the market value of the Shares if bought [under the shareholder agreement]. It would be unusual to want them to have the Shares but not their market value purchase price from their sale.”

Accordingly, the B. C. test for rectification was met:

  1. The deceased’s intention was that the shares or the value of the shares went to his children;
  2. The will as written failed to carry that intention out; and
  3. The failure was a consequence of an error or accidental slip. In this case, the error was that the deceased did not realize and was not advised by the drafting solicitor that the gift of the shares needed to specifically address the impact of the shareholder agreement.

Thank you for reading.

Paul Trudelle

06 Aug

Rectifying a Will, and the Olympics

Paul Emile Trudelle Wills Tags: , , 0 Comments

As I write this, the Tokyo 2020 Olympics are in full swing. Congratulations to all Canadian athletes competing.

This week’s blog is on rectification of a will. It also has an Olympic connection.

As reported in Jamt Estate (Re), Egil Ruud Jamt died in Vancouver, B.C. on August 16, 2016. He died leaving a will dated February 14, 2012. The will, prepared by a lawyer, named the deceased’s “nephew, Per Kare Jamt” as sole beneficiary of his estate.

The problem was that the deceased did not have a “nephew” by the name of “Per Kare Jamt”. He did, however, have a nephew by the name of “Per Martin Jamt”. Per Martin Jamt applied to rectify the will so that he was the beneficiary. The application was not opposed by any of the deceased’s intestate beneficiaries.

The court allowed the rectification. In doing so, the court considered the rectification provisions of B.C.’s  Wills, Estates and Succession Act, which allows the court to rectify a will where the court determines that the will fails to carry out the will-maker’s intentions because of:

  1. an error arising from an accidental slip or omission;
  2. a misunderstanding of the will-maker’s instructions; or
  3. a failure to carry out the will-maker’s instructions.

The court found that the deceased made an “accidental slip” in confusing his nephew’s middle name with the middle name of his predeceased brother. In finding that Per Martin Jamt was the correct beneficiary, the court considered the following:

  1. The deceased had many nephews, but only one with the name “Per”;
  2. “Per Kare”, named in the will, was the deceased’s brother, and predeceased the deceased;
  3. The deceased told the drafting lawyer that he wanted to benefit his brother’s youngest son: Per Martin Jamt fit this description;
  4. The deceased told the drafting lawyer that his nephew was about 60 years old. Per Martin Jamt was about 60 years old;
  5. The deceased provided in his will that if Per Kare Jamt was to predecease, Per Kare Jamt’s two children should have the estate. Per Martin Jamt had two children;
  6. The deceased provided the drafting lawyer with a telephone number for the named beneficiary. This telephone number matched Per Martin Jamt’s telephone number;
  7. The deceased provided the drafting lawyer with an address for the named beneficiary. This address matched Per Martin Jamt’s address;

and, now for the Olympic connection,

  1. The deceased told the drafting solicitor that he had recently seen his nephew in Vancouver in 2010 in connection with the Vancouver Winter Olympics. Per Martin Jamt visited the deceased in Vancouver in 2010 in connection with the Vancouver Winter Olympics!

(I admit: the Olympic connection was a weak one, but nonetheless.)

The court had no difficulty in concluding that the intended beneficiary was Per Martin Jamt.

Thanks for reading.

Paul Trudelle

07 Jul

Electronic wills may be ‘inevitable’ but they have drawbacks

Ian Hull In the News, Wills Tags: , , , , , 0 Comments

A headline of a 2019 Forbes article delivered a blunt message to those of us who practice estate law: “Electronic wills are coming whether lawyers like it or not.”

The article notes that the U.S. Uniform Law Commission “recognizes the trend in online everything” and recently approved the Electronic Wills Act, which provides a framework for a valid electronic will. Under the provisions of the Act, individual states can determine the number of witnesses required for the creation of a will and whether their virtual presence is sufficient. The will has to be in text form, meaning that video and audio wills are not allowed but, once the will is signed, witnessed and notarized (if required), it will be legal.

In Canada in 2020, the Uniform Law Conference of Canada (ULCC) approved in principle amendments to its Uniform Wills Act to allow for the drafting of electronic wills. A progress report from the ULCC notes that the Electronic Transactions Act has determined that the electronic medium was “sufficiently established, reliable and usable to be accepted for all business purposes.”

The Act specifically exempts three areas: wills, powers of attorney and conveyances. The exemption for wills should be lifted, the ULCC committee recommends, noting that “we now have almost 15 years of experience of electronic commerce … much of our daily lives and arrangements are performed electronically – most of our banking, all of our healthcare records, most of our insurance and even our professional certification is all carried out electronically. In that context, what argument could be advanced that wills are so different and so exclusive that they could not be accommodated under our approach to electronic commerce.”

The committee claims that “other than ‘tradition’ it is difficult to identify any cogent argument to support the continued exception. An electronic record, once stored, is reliable, can be retrieved for future use and its ‘custody and control’ is probably more clearly tracked in electronic form than in hard copy.”

Most provinces are being cautious about embracing electronic wills, or e-wills. British Columbia has taken the lead with the establishment of Bill 21: Wills Estates and Succession Amendment Act, 2020. Bill 21 was built upon a ministerial order that permitted the electronic witnessing of wills while British Columbia was in a state of emergency due to the COVID pandemic. It expands the definition of a will to allow one done in “electronic form” to satisfy the requirement that a will must be in writing. The bill received royal assent in August, 2020.

In Ontario, Attorney General Doug Downey has been content to partially open up estate law to the electronic medium. With the passage of Bill 245, Accelerating Access to Justice Act, 2021, the virtual witnessing of wills and power of attorney documents is now allowed in Ontario on a permanent basis. Previously, it was introduced on a temporary basis during the pandemic.

Virtual witnessing means the testator and witnesses can be connected through a video call, rather than being physically together in a lawyer’s office. There are two important caveats to keep in mind – the first being that at least one of these witnesses must be a licensed lawyer or paralegal. They are there not just to be a witness, but also to confirm that the testator has the requisite capacity to sign the Last Will and Testament and that they fully appreciate the nature and contents of it.

The second caveat is that while the act of signing can be done virtually, electronic signatures are not allowed. Instead, everyone involved must print out the documents and sign them in wet ink. Once they are put together and stored safely, the will is complete and legal.

While the Forbes article quoted in the introduction may be correct about e-wills being inevitable – some U.S. states, Britain and Australia have either passed laws allowing digital wills or are considering them – there are still many reasons for people to maintain the traditional approach for the time being.

The human contact between the testator and legal counsel offered in a face-to-face meeting cannot be fully replicated in a virtual meeting. This contact builds trust and reassurance, which is vital when drafting this important document. There is also a unique set of concerns surrounding the preparation of estate planning documents that sets them apart from other legal documents that are signed digitally.

At Hull & Hull LLP, we will be monitoring the evolution of e-wills and working to accommodate any legislation the province introduces, but we are glad to see Ontario taking a cautious approach in this area.

Take care, and have a great day.

Ian Hull

30 Oct

Distribution on Intestacy: The Preferential Share

Paul Emile Trudelle Estate Planning Tags: , , , 0 Comments

In Ontario, if a person dies without a will, the Succession Law Reform Act (“SLRA”) dictates how the person’s estate is to be distributed. Part II of the SLRA provides that if the person dies with a married spouse, that spouse receives a share of the estate. If there are no children, the spouse receives the estate outright. If the deceased has children, may be entitled to receive a share of the estate. If there is only one child, the spouse receives the “preferential share”, and half of any estate in excess of the preferential share goes to the spouse and the other half goes to the child (or the child’s issue, if the child has predeceased). If there is more than one child, the spouse gets the preferential share and one-third of the excess and the other children share the remaining two-thirds. Again, if a child has predeceased the deceased, the child’s issue enjoys that child’s share.

Things get a little more complicated where there is a partial intestacy. If the spouse receives assets under the will, the spouse’s preferential share is reduced by the value of the property received under the will.

Note that the intestate provisions pertaining to spouses in Ontario apply to married spouses only. Common-law spouses are not entitled to a share of the estate on an intestacy. However, they may be entitled to dependant support under Part V of the SLRA.

In Ontario, the value of the preferential share is not referred to in the SLRA. The value of the share is set by regulation: O. Reg 54/95. Since 1995, the value of the preferential share has been $200,000.

British Columbia intestacy legislation is somewhat different. The relevant legislation is the Wills, Estates and Succession Act, SBC 2009, c 13.

Firstly, in B.C., a spouse is defined as including a married spouse AND a person with whom the deceased lived in a marriage-like relationship for at least two years immediately before the death.

Secondly, in B.C., there are different calculations of the “preferential share”. If all of the children are children of BOTH the deceased and the surviving spouse, then the preferential share is $300,000. If all of the children are NOT “common” to the deceased and the surviving spouse, then the preferential share is only $150,000.

Thirdly, in addition to the preferential share, the surviving spouse is entitled to the “household furnishings”, which is defined as being the “personal property usually associated with the enjoyment by the spouses of the spousal home”. In Ontario, the value of the preferential share presumably includes the value of any household furnishings.

Fourthly, the B.C. legislation provides that if the estate is greater than the preferential share, then the surviving spouse gets half, and the deceased’s descendants get the other half, regardless of how many children there are.

Fifthly, the WESA provides for situations where there are more than one “spouse’. In such a case, the surviving spouses are to share the preferential share in the portion to which they agree, or failing agreement, as may be determined by the court. The WESA does not appear to give any guidance as to how that determination is to be made.

If you are short of things to think about this weekend, consider:

  1. Whether it is time to reconsider the value of the preferential share?
  2. Whether it makes sense to allow the spouse to have the household furnishings in addition to the preferential share. This personal property usually has nominal resale value, is difficult to evaluate, and often has sentimental or practical value to the surviving spouse.
  3. Whether Ontario should adopt a definition of “spouse” that includes common-law spouses for intestacy purposes, or whether resort to dependant support provides sufficient protection for common-law spouses?
  4. Whether the fact that the surviving children of the deceased are also the surviving children of the surviving spouse should impact on the value of the preferential share, as it does in B.C.?
  5. Whether the percentage of the estate in excess of the preferential share that the surviving spouse gets should vary depending on how many children the deceased had (that is, 50% if only one child, but only 33% if more than one child)?

Thank you for reading. Have a great weekend.

Paul Trudelle

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