Tuesday, November 21, 2006

Wills Variation Act and Sexual Orientation

In a Supreme Court of British Columbia case, Peden v. Peden, Smith et. al., 2006 BCSC 1713, released yesterday, Mr. Justice Groves held that a father's disapproval of his son's sexual orientation is not a rational and valid reason for the father to leave in his will substantially less to one son than to his other sons.

William John Peden died on October 25, 2004. His wife had died before him, and his three sons survived him. In his will, he left two of his sons outright gifts. But left his youngest son, Bruce Peden, a life estate only. In other words, Bruce Peden would receive the income generated from investments held in trust for him, but would not have the capital. (I am not clear from reading the judgment if the executors and trustees had discretion to apply some of the capital for Bruce Peden, but in any case, Bruce Peden would not have control of the capital.)

The division in the will was also unequal in that William Peden left his eldest son, Gary Peden, $150,000 less than the shares set aside for the other two sons, but Gary Peden did not contest this.

The estate was worth approximately $1.7 million. Bruce Peden would receive the income from $610,000, which was estimated to be about $24,000 a year assuming a 4% return.

Bruce Peden brought an application under the Wills Variation Act, RSBC 1996, c. 490, seeking a declaration that his father had not made adequate provision for him in the will. He asked the court to vary the will to give an outright share of the estate, instead of a life estate. If successful, he would get approximately $610,000 to use as he wished, instead of the income from $610,000.

The court found that Bruce Peden was not as well off financially as his brothers, and he was in poor health. He had also provided a significant amount of care for his father, and for other elder family members over the years.

William Peden's main reason for leaving the life estate to Bruce Peden instead of an outright gift was because of his disapproved of his Bruce Peden's sexual orientation.

Bruce Peden's application was successful. In his analysis, Mr. Justice Groves started from the position that a William Peden had a moral obligation to treat the children equally unless there was a rational and valid reason to treat them differently. In this case, William Peden's disapproval of Bruce Peden's sexual orientation was not a rational reason to leave him a life estate only.

Mr. Justice Groves also considered the significant sacrifices that Bruce Peden made to care for his father and other family members before concluding that William Peden did not make adequate provision for his son.

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