Tag: testamentary freedom
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.
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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.
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In a recent case, Ilott v. The Blue Corss & Ors,  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.
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A recent case arising from British Columbia addresses whether a deceased parent is able to disinherit their child as a result of their sexual orientation.
As outlined in the recent National Post article, found here, a daughter has commenced a claim against her father’s estate on the basis that she was left out of the Will because she is in a lesbian relationship. Specifically, the father’s Will leaves the entirety of his estate to his other children, and nothing to the disappointed daughter.
The disappointed daughter alleges that her parents never accepted her sexual orientation and isolated themselves with her and her long-time partner. For example, the parents did not attend their daughter’s wedding. Apparently, this is the basis for the disinheritance.
Interestingly, this is not the first time the BC Courts have been required to address sexual orientation in Wills. In the 2006 BCSC decision of Peden v Peden, Justice Groves struck down a Will where a deceased father failed to approve of his son’s homosexuality on the basis that, “…homosexuality is not a factor in today’s society justifying a judicious parent disinheriting or limiting benefits to his child”.
Although, the laws in BC and Ontario are different with respect to the requirement of a testator to make adequate provision for spouses and children, given the recent decision of the Ontario Court of Appeal in BMO v Spence, it will be interesting to follow the applicability of sexual orientation to challenging an Ontario Will.
Last year, Spence v. BMO Trust Company, 2015 ONSC 615 was one of the most significant estate cases of 2015. In Spence, the testator made a Will that unambiguously and unequivocally disinherited one of his daughters. The disappointed daughter applied to the Ontario Superior Court of Justice for an order setting aside the Will on the ground that she was disinherited solely because she had a child with a white man. A third party swore an affidavit corroborating the Applicant’s evidence that her father disinherited her for reasons that were racially discriminatory. Justice Gilmore accordingly set aside the entire Will on the basis that it was contrary to public policy against racial discrimination. The Respondent BMO Trust Company appealed the decision.
This week, the Ontario Court of Appeal released its long awaited ruling in Spence v. BMO Trust Company, 2016 ONCA 196. The Court of Appeal overturned Justice Gilmore’s decision, stating that the principle of testamentary freedom to choose one’s beneficiaries is generally immune to judicial scrutiny.
In reaching its decision, the Court of Appeal appears to have significantly restricted the scope of the public policy doctrine in estate cases. Simply put, a Will that does not impose any conditions that, on its face, offend public policy appears to be valid regardless of the testator’s intentions. Thus, the Court in Spence found that the testator was free to disinherit his daughter even if his intention appeared to be racially discriminatory.
It remains to be seen whether the Applicant will seek leave to appeal to the Supreme Court of Canada.
To hear an interesting discussion about the earlier decision in this case check out Hull on Estates podcast #404
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.
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