Tuesday, October 14, 2008

Graham v. Chalmers

In British Columbia, when a child applies to vary a will under the Wills Variation Act, the court may increase the share of another child, even though the other child has not made a claim. This is because section 4(1) says that once a child or spouse brings a suit under the Wills Variation Act, the suit may be treated as one brought on behalf of all of those entitled to apply.

The court could even increase the share of a child (or of a spouse) who opposed the Wills Variation Act claim. This is what happened in Graham v. Chalmers, 2008 BCSC 1246.

Dolores Graham died in June 2004. She left two children, Janet Graham and Sandi Chalmers. Ms. Chalmers had two children, Shannon Chalmers and Paul Chalmers. Shannon was 22 years old at the time of the trial, and Paul was 16. In her will, Dolores Graham left Janet Graham $25,000 (to offset a gift she had made to Sandi Chalmers), and divided the residue of her estate equal among her two children and two grandchildren.

The value of Dolores Graham’s estate when this case went to trial was roughly a million dollars.

Janet Graham brought a claim under the Wills Variation Act on the basis that her mother had not made adequate provision for her. The Wills Variation Act gives the Supreme Court of British Columbia discretion to increase the share of an adult child to an amount the court considers adequate, just and equitable in the circumstances.

Madam Justice Fenlon found that Dolores Graham had not made adequate provision for Janet Graham. She found that Dolores Graham’s purpose in leaving a quarter of the residue to each of her grandchildren was to provide for their education. Madam Justice Fenlon found that this purpose could still be met if the grandchildren’s share was reduced to $100,000 each. Janet Graham would retain the $25,000 gift. Madam Justice Fenlon then ordered that the residue of the estate of approximately $800,000 be divided equally between Janet Graham and her sister Sandi Chalmers.

The order dividing the residue of the estate equally between Dolores Graham’s two children makes good sense, but it is ironic. Sandi Chalmers, whose children benefitted under the will, had argued that the will be upheld. In the result, the court increased her share from about $250,000 to about $400,000.

[Since I wrote this post, the British Columbia Court of Appeal varied the award to provide each granchild with 10 percent of the residue of the estate, and each child to 40 percent. See my post on the Court of Appeal decision here.]

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