Court allows disinheritance of estranged children

The recent decision of Kong v. Kong confirms (and not for the first time) that in some circumstances the court will support the decision of a parent to exclude an adult child from their will entirely, and deny a claim under BC wills variation legislation. In this case the court disallowed the claims of two disinherited sons, and allowed two others only a 5% share of the estate.

A few observations from this case:

  • Hostile conduct by the child and failing to accept reconciliation when offered can negate the parent’s moral duty to the child.

In this case the evidence showed that one of the sons who was excluded from the father’s will treated his parents harshly in relation to a sale of a residence that they shared; the same son later made strong allegations about the father in the context of a legal dispute over their mother’s estate. These actions angered and offended the father. Nevertheless, the father reached out in his final days and asked the son to visit him in the hospital. The son refused the invitation. The court found that this behavior negated any moral obligation the father may have had to the son.

  • Even where a variation is allowed, the will-maker’s wishes remain influential.

Sometimes people wonder whether leaving a modest gift to an estranged child is more likely to preclude a successful wills variation claim than leaving nothing to the same child. However, in this case the court said that the will-maker’s clear intent to leave everything to one child meant that in the two instances where it allowed variation, the variation ought to be minor.

  • In considering whether a will-maker’s reasons for disinheriting were valid and rational, the court will consider all of the circumstances, not just direct statements made by the deceased.

The claimants tried to argue that evidence of their actions in respect of the father, including in the context of the prior family litigation, should be excluded. They wanted the court to consider whether the father’s decision was “valid and rational” only on the basis of the evidence of what the father had said to his lawyer. The court rejected this approach, stating:

The implication of the plaintiffs’ position in this case would be to limit the court’s analysis to the testator’s expressed, and therefore subjective reasons, rather than making an objective inquiry into the reasons for disinheriting grown children with reference, as necessary, to community standards. In my view the plaintiffs’ approach amounts to excluding important evidence about the testator’s relationship with his grown children.

The Even-Hand Rule

If you are acting as an executor, it is important to remember the even-hand rule: unless the Will says otherwise, the executor must treat all of the beneficiaries equally (i.e. with an even hand).

The even-hand rule is not always straightforward because different beneficiaries may receive different interests in the estate.  Consider a case where Beneficiary A has a life interest in an asset and Beneficiary B receives the remainder of that asset when Beneficiary A passes away.  The executor must maintain an even hand between the two beneficiaries.  Practically speaking, it is not a straightforward task.  How does the executor treat two unequal interests equally?

In Flaska Estate, Re, 105 A.C.W.S. (3d) 990 (Ont. S.C.J.), for example, the Court held that the executors did not maintain an even hand between a life tenant and a remainderman when they invested the entire estate in fixed income investments.  As a result of their investments, the executors failed in their duties to the life tenants to maximize the interest income available to them.  In other words, the executors failed to act with an even hand because they did not pay equal consideration to the interests of all beneficiaries.

The even-hand rule arises in other situations as well.  Therefore, an executor (or other trustee for that matter) must remain cognizant of the rule.

Application of WESA: Date of Death or Date of Will?

Since March 31, 2014, the Wills, Estates and Succession Act (“WESA”) has been the applicable legislation regarding wills and estates matters in British Columbia. WESA gives the courts the power to “cure” deficiencies in Wills that would formerly have been invalid for failure to comply with the required formalities under the less forgiving Wills Act (repealed by WESA).

Can the courts “cure” a deficient Will made prior to the WESA regime? The general application of WESA is that it applies if the death of the person whose Will and/estate is at issue occurred on or after March 31, 2014. As such, the courts do have the power to “cure” a deficient Will as long as the will-maker passed away after WESA came into effect.

The recent decision in British Columbia v. Sheaffer (“Sheaffer”) is an example of the Court drawing a hard line in terms of the March 31, 2014 cut-off date for the application of WESA. The dispute arose because of a second unsigned will of the deceased that differed from the original, which was properly executed. The question of which legislation was applicable is important because, under the Wills Act, the second will was insufficiently executed and therefore invalid. On the other hand, under WESA, the Courts would have the authority to accept a document despite a lack of the traditional formalities, if the Court is satisfied that the document represents the will-maker’s true intentions. In this case, the will-maker passed away in 2011 so the Court applied the Wills Act and found the second will to be invalid.

The Defendant argued, among other things, that the March 31, 2014 cut-off date is arbitrary and fundamentally unfair, and it violates his Charter rights. The argument failed and the Court found that the transitional sections of WESA and applicable date are a practical necessity. The Court does not have discretion to stray from the strict imposition of the transitional structure, specifically the March 31, 2014 cut-off.

The decision in Sheaffer forms a guideline for litigants hoping to find relief under the curative provisions of WESA. The courts are not likely to entertain arguments under WESA unless the will-maker passed away after March 31, 2014. The costs of the litigation may form another deterrent for litigants from improperly pursuing a matter under WESA. Typically, both parties’ costs in estate matters are awarded out of the estate when the litigation was brought because of the will-maker’s conduct. However, litigants that force this issue may end up paying their own costs and the costs incurred by the estate, as was the case in Sheaffer.

Thank you to Elina Hartshorne for assisting with this blog post.