Tag: moral obligations

25 Jul

Testamentary Freedom versus a Moral Obligation to Provide: Striking a Balance

Garrett Horrocks Elder Law, Estate & Trust, Estate Planning, Hull on Estates, Wills Tags: , , , 0 Comments

A recent decision of the Supreme Court of British Columbia examined the tension between a testator’s moral obligation, if any, to provide for a child under a will, and that testator’s freedom to dispose of his or her estate as that testator sees fit.

The facts in Grewal v Litt are relatively simple and were generally not in dispute between the parties.  The applicants were the four daughters of the two testators whose wills were under scrutiny.  The respondents were the testators’ two sons.  The testators had died leaving mirror wills, each benefitting one another.  Upon the death of the survivor, the wills left modest bequests of cash to each of the daughters, while the two brothers shared the residue.

The combined values of the estates exceeded $9 million.  Pursuant to the terms of the wills, each daughter was to receive a bequest of $150,000, or about 1.5% of the total value of the two estates.  The two brothers were the sole residuary beneficiaries and stood to split the remaining 94%.

The daughters brought an application to vary the wills under section 60 of British Columbia’s Wills, Estates and Succession Act (the “WESA”) to provide an equal distribution of the residue between all six children.  The application was brought on the basis that the testators had purportedly discriminated against the applicant daughters based on their adherence to traditional cultural values.  The respondent brothers agreed that the terms of the wills did not fulfill the testators’ moral obligations to the daughters, but did not agree that the solution was an equal distribution of the residue.

The court grappled with the tension between the need to make proper provision for the daughters versus recognizing the testators’ broad testamentary freedom to dispose of their estate as they see fit.  Ultimately, the court found substantially in favour of the daughters and held that each daughter would be entitled to a 15% share in the residue, with the respondent brothers each receiving a 20% share.

In reaching that decision, the court first looked at section 60 of the WESA and noted that the value of the estates was large enough that the court could both consider the parents’ testamentary autonomy in favouring the respondent brothers while nonetheless making adequate provision for the applicant daughters.

The application judge then referred to numerous prior decisions in which the court had ordered variations of wills when unequal testamentary distributions were made by testators who believed themselves to be bound by cultural norms.  Finally, the judge noted that the significant contributions by the daughters to the testators during the last few years of their lives, which were not replicated by the brothers, enhanced the testators’ moral obligation to provide for the daughters.

This case’s potential impact in Ontario remains to be seen, although it is important to the note that Ontario lacks a statute with as broad a mandate for varying testamentary documents as the WESA.  Part V Ontario’s Succession Law Reform Act is a comparable parallel that allows a court to make adequate provision for a testator’s dependants, but that language is less broad than the language of the WESA.  In any event, the Court of Appeal for Ontario held in Spence v BMO Trust Company that absent any requirement by a testator to adequately provide for a dependant, the testator has broad testamentary freedom.

Thanks for reading.

Garrett Horrocks

06 Jul

Moral Obligations Temper Testamentary Freedom

Ian Hull Capacity, Wills Tags: , , , 0 Comments

Testamentary Freedom—the ability to leave one’s property to whomever one wishes—is a principle long held in the common law of Canada. But as evidenced by legislative reforms and recent jurisprudence, testamentary freedom is not absolute and will likely continue to encounter challenges as society and the law develop. Strangely enough though, current challenges to testamentary freedom are not altogether different from the sorts of considerations that go into other well-established will challenges.

One well-established basis for challenging a will is called testamentary capacity. In my book, Challenging the Validity of Wills, I define testamentary capacity as the ability of the testator “to know and understand that one is executing a testamentary document disposing of assets, the general value and nature of which are known to the testator or testatrix, after having considered all persons having a moral claim to the assets being disposed of” (at p. 19).

The leading case on the law of testamentary capacity, Banks v Goodfellow (1870), L.R. 5 Q.B. 549, though nearly 150 years old, offers an insightful look at one rationale for testamentary freedom. The court says, “The instincts, affections, and common sentiments of [hu]mankind may be safely trusted to secure on the whole a better disposition of the property of the dead, and one more accurately adjusted to the requirements of each particular case than could be obtained through a distribution prescribed by the stereotyped and inflexible rules of a general law” (at p. 817).

The rule of testamentary freedom is “founded on the assumption that a rational disposition”—or a disposition based on the rational choices of the testator—is better than one imposed by law (at p. 817).

However, in order to make rational choices, the testator must be of a sound mind. That is, they must have capacity to make a will. The reason a sound mind is so important, says the court in Banks v Goodfellow, is because of the moral responsibilities people have to others. The court reasons that if the law [as it was then] permits people the freedom to do what they want with their property, then courts must make sure that testators have testamentary capacity because “a moral responsibility of no ordinary importance attaches to the exercise of” testamentary freedom (at p. 817).

In other words, with great freedom comes great responsibility.

Testamentary capacity was a means to ensure that people were capable of carrying out their freedom responsibly. Failure to fulfill one’s moral responsibilities (such as, provision for a spouse or a next of kin) was one factor that aroused the suspicion of the court, and when issuing decisions, it was a key consideration in a court’s assessment of the testator’s capacity.

The point is:  courts have long recognized that moral responsibilities attach to testamentary freedom. In 1870, testators were absolutely entrusted by the law to fulfill their moral responsibilities. However, that not always being the case, succession law has developed to ensure some of those moral obligations are met (for example, one’s moral obligations to one’s spouse or to a dependent). It may be possible to describe developments in succession law as giving greater affirmation to our individual and collective moral responsibilities. As such, one might ask whether the future of succession law will continue to develop along those lines, namely, giving new definition to what constitutes a moral obligation in the twenty-first century.

Thank you for reading.

Ian Hull

06 May

Hull on Estates #377 – Moral obligations

Hull & Hull LLP Hull on Estates, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes Tags: , , , , 0 Comments

Listen to Hull on Estates #377 – Moral obligations

Today on Hull on Estates, David Morgan Smith and Doreen So discuss the case of Verch Estate v. Weckwerth 2014 ONCA 338 and the legal implication of moral obligations in estate disputes in Ontario. If you have any questions, please email us at hull.lawyers@gmail.com, or leave a comment on our blog page.

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