Tag: testamentary freedom

29 Sep

$1.2 Billion Publishing Empire Left to Girlfriend and Not Sons

Ian Hull In the News, Wills Tags: , , , 2 Comments

Earlier this year, the CEO of Scholastic Inc., M. Richard Robinson Jr., unexpectedly died leaving his family and many others shocked about his succession plans.

Scholastic Inc. is the publishing house behind many well-loved children’s books, including The Magic School Bus, Goosebumps, and Captain Underpants. It also published the cult-classics Harry Potter and The Hunger Games, contributing to the $1.2 billion company valuation.

Scholastic Inc. was founded by Mr. Robinson’s father and so naturally his two sons, John, 34, and Maurice, 25, expected to inherit the family business. However, they must have been surprised when the contents of their late father’s Will were eventually revealed.

Mr. Robinson left all of his personal possessions and control of Scholastic Inc. to Iole Lucchese, the company’s chief strategy officer.

Having never discussed testamentary intentions, the sons were left with virtually nothing, not even an explanation. Both sons were perplexed upon the revelation, not being able to understand why their father made the decision to cut them out of his Will, especially since they had actively been in each others’ lives.

Their mother and Mr. Robinson’s ex-wife, Helen Benham, was also disappointed, as she had worked for Scholastic Inc. for over 30 years and had rekindled an amicable relationship with Mr. Robinson prior to his death. Mr. Robinson had allegedly told Ms. Benham, “you care more about Scholastic than I do” on several occasions, so she must not have been prepared for the cold shoulder she received upon his death.

While it may be a difficult pill for Mr. Robinson’s family to swallow, given that the American succession laws will be applied, it is difficult to know how the lack of provisions made for his family will be treated. In Ontario, however, even if we may expect parents to leave behind something for their children, our succession laws do not require a parent to do so.

In Ontario, there is a strong emphasis on testamentary freedom and in many cases, therefore, individuals are not subject to any legal and moral obligation to provide for their family if they do not wish to. This was made clear in Verch Estate v. Weckwerth, where the Ontario Court of Appeal found that independent adult children who are excluded from their parents’ Will do not necessarily have grounds to make a moral claim against the estate. Courts typically only intervene when dependant spouses or children who were being supported prior to the death demonstrate that a testator failed to make adequate provision for their continued support after death. As a result, there is therefore no right of inheritance in Ontario.

While John and Maurice may plan to pursue legal action, it remains to be seen whether they will be successful or not.

Thanks for reading,

Ian Hull & Ekroop Sekhon

08 Aug

Testamentary Freedom From a Distance 

James Jacuta Estate & Trust, Estate Litigation, Estate Planning, Trustees, Uncategorized, Wills Tags: 1 Comment

We live in a big and beautiful country that is great for summer vacation travel from sea to sea. The vast distance from British Columbia to Nova Scotia is not just geographic, as shown by court decisions involving the review of wills. There is also a great deal of public policy distance between these provinces.

In the recent British Columbia decision on July 17, 2019 of  Grewal v Litt, 2019 BCSC 1154 the  four daughters of the deceased sought a court-ordered variation of the mirror wills of their parents using the Wills, Estates and Succession Act, S.B.C. 2009, c. 13. In their wills, the parents left 95% of their nine million dollar estate to their two sons and the remainder to their four daughters. The daughters sought and obtained a variation based on the facts and legislation with the court ordering 15% to each of the four daughters and 20% to each of the two sons.

In the Nova Scotia decision in Lawen Estate v Nova Scotia Attorney General, 2019 NSSC 162, the court ruled that the deceased had a great deal of testamentary freedom and that this freedom was constitutionally protected. The Estate of Jack Lawen was subject to a claim by some of his adult and competent children under the Nova Scotia Testator’s Family Maintenance Act for a change in the distribution of assets from what was specified in his will. In this case, the daughters applied, but they were not successful. It is interesting to note that the Judge agreed with the argument that the Canadian Charter of Rights and Freedoms could be used to strike down those provisions of the legislation that allowed the adult competent children to even bring their application to the court. The Charter, it was argued, protects the right to decide where the property would go and to disinherit his children. Presiding Justice John Bodurtha wrote in his decision dated May 24, 2019, “A testamentary decision is a fundamental personal decision that is protected under section 7” of the Charter.

Legislation that infringes and limits a testator’s freedom, however, can be justified in some instances, and to certain degrees, depending on the province and the case facts. If you try to disinherit your dependant spouse then the courts would step in and limit your testamentary freedom. This also applies to not providing for dependants who are minor children, non-competent adult children, and even competent adult children in some provinces. One could ask, however, if it is fair and just that the daughters in British Columbia could achieve an equitable distribution of the family estate, but in Nova Scotia, they would have failed.

Canadian limitations on testamentary freedom are small and balanced in comparison to the forced heirship provisions of many European civil law jurisdictions. In those countries, a testator is forced by law to leave a portion of the estate to family members. The percentage of the estate to be distributed and those who are eligible varies by jurisdiction.  It is an interesting public policy approach to make the family unit legally paramount in forced heirship jurisdictions, and not the individual testator.

Thanks for reading!
James Jacuta

25 Jul

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

Hull & Hull LLP 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

21 Mar

Testamentary Wishes Must be Respected

Lisa-Renee Estate & Trust, General Interest, In the News, Wills Tags: , , , , , , , 0 Comments

In a recent case, Ilott v. The Blue Corss & Ors, [2017] UKSC 17 (15 March 2017), the Supreme Court of the United Kingdom has affirmed that a testator has testamentary freedom to disinherit his or her child.

As outlined in a recent National Post article, the Court rejected a daughter’s proceeding to set aside her late mother’s will, which left the majority of the mother’s estate to several animal charities.  In the will, the mother also directed the executors of her estate to resist any efforts her daughter may make to challenge the will.

The disappointed daughter exercised her rights pursuant to the Inheritance (Provision for Family and Dependants) Act 1975 (the “1975 Act”), which allows certain individuals such as spouses and children to make a claim for reasonable financial provision from an estate.

Unlike Part V of Ontario’s Succession Law Reform Act, the 1975 Act does not require the deceased testator to have provided his or her dependant with support or to have been under a legal obligation to provide support immediately before his or her death.  Rather, the 1975 Act requires the surviving child to prove that the deceased’s will did not include reasonable financial provision for his or her child in light of the child’s own financial resources and needs.

Interestingly, the daughter appealed the District Judge’s award of £50,000.00 to her and the Court of Appeal’s decision awarding her £143,000.00 to buy the house she lived in and an additional £20,000.00.  On appeal, the Supreme Court reversed the Court of Appeal’s decision and restored the District Judge’s decision on the basis that the District Judge’s decision struck an appropriate balance between the mother’s testamentary wishes and the daughter’s claim for reasonable financial provision from the estate. In doing so, the Supreme Court upheld the long standing principal that people remain at liberty to dispose of their assets and property subject to provisions of the 1975 Act.

Other Articles you May be Interested In:

Testamentary Freedom Reconsidered
Is Discrimination a Restriction on Testamentary Freedom?
Validity of In Terrorem Conditions

Thanks for reading!

Lisa Haseley

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