Sunday, October 22, 2006

The Cost of Not Having a Lawyer Prepare Your Will

Sometimes people call me to ask if they have to retain a lawyer to prepare their wills. The answer is no. Although in British Columbia, only a lawyer or a notary public may legally charge a fee for preparing a will, there is no law that says you can't do it yourself.

The better question is, should you?

Mrs. Marjorie Dobson died on June 11, 2004. She was twice widowed, and did not have any children. She had some nieces and nephews, and her second husband, Art Dobson, did have children.

After their marriage, Mrs. Dobson and Art Dobson made mirror image wills. If one died before the other, the survivor would inherit everything. On the death of the survivor, his or her estate was to be divided among various relatives of each of Mr. and Mrs. Dobson.

Art Dobson died before Mrs. Dobson, leaving his estate to her.

After Mr. Dobson's death, Mrs. Dobson made a new will, which was witnessed by a Mr. and Mrs. Bell. Mr. Bell had some limited authority to administer oaths as a notary public, but was not entitled to draw wills for a fee. Despite the fact that he was not professionally qualified to draw wills, he may have assisted in drawing Mrs. Dobson's new will, dated September 6, 1996.

Mrs. Dobson's new will left all of her assets to her executor in trust. This is a fairly standard clause. In the will, Mrs. Dobson gave three beneficiaries specific amounts of money. The will then contained a direction to the executor to "pay to and transfer from the cash residue of my the following persons, share and share alike...," followed by the names of various of her and her late husband's relatives.

When Mrs. Dobson died her main assets were her house, which was worth approximately $117,000 and cash or bonds worth approximately $140,000.

Mrs. Dobson's nieces and nephews argued that, because the will did not contain a clause authorizing the executor to sell Mrs. Dobson's assets (which is a very common clause), and the will left only"cash residue" to the beneficiaries named in the will, the will did not dispose of the house. If the will did not dispose of the house, the nieces and nephews would inherit the house as her nearest blood relatives. They would receive the house on a partial intestacy, pursuant to Part 10 of the Estate Administration Act, RSBC 1996, c. 122 .

The main question before Mr. Justice Williams in Laws v. Rabbitt, 2006 BCSC 1519 was whether Mrs. Dobson had disposed of the whole of her estate in her will, including her house, to those of her and her late husband's relatives she named in the will. Or, did she leave out the house in her will?

You might be inclined to say, "Well, just ask Mr. Bell or some of Mrs. Dobson's friends if she told them what she intended." That would make some sense, but the law does not permit this kind of evidence. The theory is that to allow this kind of evidence would circumvent the rule that a will must be in writing, and that the witnesses must sign the will in the presence of the maker. In any case, Mr. Bell had died before this case went to court.

Mr. Justice Williams set out the relevant principles for interpreting the will at paragraph 57 as follows:

... it is my understanding from the authorities that the basis upon which I should proceed is to examine the will to determine whether there appear to be words that are omitted or not clear. Where there is an omission that is plain on its face or an ambiguity, I may apply common sense to make a change or addition, but may only do so where the testator’s intention is clear. I am entitled to consider the context of the whole will and surrounding circumstances which existed at the time of the execution of the will, and I should prefer an interpretation that will avoid an intestacy. I am not permitted to consider evidence of the testator’s intention as provided by the party who drew the will or from any person who purports to be able to say what that intention was. Any affidavit which offers double-hearsay evidence is not admissible.

In reaching the conclusion that Mrs. Dobson did not dispose of her house in the will, Mr. Justice Williams considered that Mrs. Dobson had brought the house into her marriage with Mr. Dobson, and had kept it in her name throughout. Mr. Dobson had previously sold his house, and given his children some of the sale proceeds.

In light of the surrounding circumstances, Mr. Justice Williams declined to either read in a clause authorizing the executor to convert the house into cash, or to give the words "cash residue," a broad interpretation to include all of the residue of Mrs. Dobson's assets.

Accordingly, while Mr. Dobson's family will share the cash and bonds, only Mrs. Dobson's nieces and nephews are entitled to the house.

Although I understand Mr. Justice Williams' reasoning, on reading this decision, I am left with the suspicion that Mrs. Dobson really intended for Mr. Dobson's family to share in her entire estate including the house. I doubt that Mrs. Dobson would have had an inkling that there was any distinction between "cash residue" and "residue," or that she would have intentionally omitted or overlooked her house when she made her will.

If she had someone draw up her will who was competent to do so, I suspect that the outcome would have been different. Of course, if her will had been competently drawn, the lawsuit would not have been necessary. A properly drawn will would have either clearly given the house to just her nieces and nephews, if that is what Mrs. Dobson intended, or included the house in the residual gift to both her and Mr. Dobson's relatives.

I don't know how much the parties to this court case spent on legal fees, but I am confident that it was many times more--perhaps over a hundred times more--than what it would have cost for Mrs. Dobson to get the will professionally drawn by a lawyer.

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