A number of proposed changes will, if implemented, have an impact on wills, estates and trusts practices. I will summarize a few of them in this post.
Testamentary and Standby Guardianship
Currently, if you are the parent of a child, you may appoint a guardian in your will. But if you are a guardian, who is not the child’s parent, there is no provision allowing you to appoint a guardian in your will in case you die before the child becomes an adult. Nor is there any provision allowing you as a parent or guardian to appoint a person as the child’s guardian in case you become ill. The proposed new legislation will allow a child’s guardian (including a guardian who is not the child's parent) to appoint a guardian in a will, or to appoint a standby guardian in case he or she becomes unable to continue his or her parental responsibilities. This proposal would implement changes recommended by the British Columbia Law Institute. I wrote about this issue in a previous post here.
Exclusions of Inheritances and Assets held in Trust
The proposed legislation would exclude assets one spouse inherits or receives as a gift from the property divided between the spouses on the breakdown of the marriage or relationship. It would also exclude “property held in trust for the benefit of a spouse, unless the spouse has an immediate and absolute interest in the trust property or has the power to terminate the trust.”
It should be noted that the exclusions would not be absolute. The court would have discretion to divide excluded property if:
“(a) one of more items of family property are not available to effect the division of family property under section 80 [equal division of family property and family debt] or section 81 [unequal division of family property and family debt]; or
(b) it would be clearly unfair not to do so having regard to
(i) the duration of the spousal relationship, or
(ii) a spouse’s direct or indirect contribution to the preservation, maintenance,
improvement, operation, or management of excluded property.”
Division of Property on Breakdown of Common Law Relationships
The White Paper recommends giving common law spouses similar rights to a division of property on a marriage breakdown as married spouses. I note that the definition of spouse in the proposed legislation differs from the definitions in the Estate Administration Act, Wills Variation Act, and the new Wills, Estates and Succession Act (which as at the date of this post is not in effect.) The definition of spouse in the proposed legislation includes a person who:
“(b) lived with another person:
(i) in a marriage-like relationship for a continuous period of at least 2 years, or
(ii) in a marriage-like relationship of some permanence if the persons are together the parents of a child
and, for the purposes of this Act, the marriage-like relationship may be between persons of the same gender, ….”
In contrast, the new Wills, Estates and Succession Act will not treat a person who lived with another “in a marriage-like relationship of some permanence if the persons are together the parents of a child,” as a spouse unless they lived with each other in a marriage-like relationship for at least 2 years. This means that in some cases a person may be considered a spouse of another and have all of the rights of a spouse on separation under the proposed new legislation if they are parents of a child, but have less rights to property on the death of the other parent.
Spousal and Child Support
If the White Paper is implemented the obligation to pay spousal or child support will continue after the payer’s death. Payments would then have to come out of his or her estate. The parties may, however, agree that they will not bind the payer’s estate. The payer’s personal representative would also be able to apply to court to reduce or terminate support.
If you wish to make comments on the White Paper, you only have a few days left. The consultation ends on October 8, 2010.
Comments may be mailed, faxed or emailed to:
FAMILY LAW WHITE PAPER
Civil Policy and Legislation Office
Justice Services Branch
British Columbia Ministry of Attorney General
PO Box 9222 Stn Prov Govt
Victoria, British Columbia V8W 9J1
Facsimile: (250) 387-4525