Hutchison v. Weidman Estate

In British Columbia, the Wills Variation Act allows a child to apply to court to vary his or her parent's will if the parent did not make adequate provision for the child in the will. This does not mean that parents have to treat their children equally. The judge hearing the case may consider the parent’s reasons for favouring one child over others. If a child has greater need than the others, a parent may have good reason to leave a larger share to that child.

A recent case, Hutchison v. Weidman Estate, 2010 BCSC 1356, illustrates this point.

In his will, Bernard Walter Weidman left his entire estate, worth a little over $1 million to his daughter Sharon Weidman. He had three other children, but did not leave anything to them. He died in January 2007.

One of the other children, his daughter Cheryl Hutchison, brought a claim under the Wills Variation Act to vary her father’s will. She was a registered nurse, but has some health problems, and has been out of work. She owns her own home worth about $700,000, and has built up a registered retirement savings plan. She is 53.

Sharon Weidman has had significant health problems throughout her life, including epileptic seizures. She has cognitive difficulties, and has held low paying jobs. She was unemployed when the case came to trial. She owns her own apartment, in an older building, that may have a major roof problem. The court heard medical, vocational and actuarial expert evidence, indicating that she was severely limited in her employment prospects, and may require expensive care in the future. She is 51.

Neither of the other two children made any claim to a share of their father’s estate. One of them, Carol Cunniff, gave evidence in support of Sharon Weidman.

Cheryl Hutchison’s position at trial was that she should be awarded 45 % of the estate, with 55% left to Ms. Weidman.

Mr. Justice Williams held that Bernard Weidman had a moral obligation to make provision in his will to the plaintiff, Cheryl Hutchison. But Mr. Justice Williams also balanced that moral obligation with Bernard Weidman’s moral obligation to Sharon Weidman, and Mr. Weidman’s reasons for leaving his estate to her. Mr. Justice Williams found that Mr. Weidman’s reason for leaving his estate to only one child was his concern about her circumstances.

Mr. Justice Williams compared Sharon Weidman’s circumstances to those of the plaintiff:

[90] Earlier in these reasons, I made reference to Sharon Weidman’s circumstances with respect to her income and assets. In a nutshell, she is unemployed and effectively unemployable. Her home could hardly be described as adequate; in fact, her lifestyle is anything but that. On all of the evidence, I am quite satisfied that her situation is decidedly and distressingly substandard.

[91] Evidence has been filed on behalf of the defendant, setting out an actuarial assessment of the present cost of the future care requirements that have been identified for Sharon Weidman. The actuary has provided a present value for these three different categories of needs which were identified in the report of Ms. Quastel. He estimates that, for all the present and ongoing needs, the value is in the order of $144,400. As for the other three categories of costs, that is, where homemaker service might be required and where assisted living would be required (contingent costs). He estimates the current value of those costs to range between $625,211.82 and $1,472,201.

[92] In my view, the needs of Sharon Weidman are substantial and compelling. There is no doubt that she is a person who is dealing with a constellation of challenges, difficulties and limitations. I accept the evidence which has been adduced as to her circumstances. In my view, the concerns that the testator recognized many years ago have not in any way abated. She is a person of substantial need.

[93] The circumstances of the plaintiff are quite different. I accept on the evidence that she will experience some difficulty from a vocational perspective going forward and that she will not be able to earn a robust income into the future. At the same time, she has advantages which place her in a vastly different situation than that of the defendant Sharon Weidman. I have averted to those earlier.

Mr. Justice Williams awarded Cheryl Hutchison $75,000. The balance of the estate will go to Sharon Weidman.

White Paper on Limitation Act Reform

The B.C. Ministry of the Attorney General has published its “White Paper on Limitation Act Reform.”

The White Paper proposes significant changes to British Columbia’s Limitation Act. I will summarize a few of the highlights of the recommendations in this post. (I have written about our current Limitation Act here.)

If adopted the most of the basic limitation periods will be two years. This stands in contrast with the current legislation which sets out two years, six years or ten years, depending on the type of claim. Some claims would continue under the proposals to have longer basic limitation periods including claims on a judgment (ten years), or claims made by the government.

The basic limitation period would continue to start to run from the date the claimant discovered that he or she had a claim (or should have reasonably discovered the claim), but the language of this section will be simplified.

The ultimate limitation period would be changed to either ten or fifteen years. Currently, it is thirty years for most types of claims, but there is a six year limitation period for medical malpractice claims against hospitals and medical practitioners. The ultimate limitation period applies even if the claim is not discovered until later.

The ultimate limitation period will begin to run from the time of an act or omission giving rise to the claim, rather than when all of the elements of the claim are present. Currently, in the case of a claim in negligence the limitation period does not begin to run until the claimant has suffered damage. For example, if a building is negligently designed, put the damage to the building occurs years after the building is built, the ultimate limitation period does not begin to run until after the damage occurs. Under the proposed changes, the ultimate limitation period will begin to run from the date of the design, even though the damage may occur say fifteen years later.

If someone under the age of 19 has a claim, the running of both the basic limitation period and the ultimate limitation period would be postponed until the minor attains the age of 19, unless notice is given to the minor’s guardian and to the Public Guardian and Trustee to commence a claim earlier, in which case the basic limitation period will begin to run from the date notice is given.

Similarly, the basic limitation period would not begin to run against an adult person while he or she is under a legal disability. But the ultimate limitation period would not be affected by the disability, and would run from date of the act or omission.

The White Paper also includes a proposal to postpone the running of both the basic and ultimate limitation periods for fraud and fraudulent breach of trust, including claims against a trustee who willfully conceals the loss or damage, until the beneficiary becomes fully aware of his or her claim.

Currently, the limitation period for loans payable on demand begins to run from the date a loan is made, rather than from the date of demand. This can create problems for loans made within families. Parents will sometimes make loans to children on demand, without realizing that they may not be able to collect after six years (see my posts on this topic here and here). The White Paper contains a proposal that the basic and ultimate limitation periods would not begin to run until the borrower fails to pay after the lender demands payment.

Certain types of claims, such as claims based on sexual assault would continue to have no limitation period.

Some claims would continue to be governed by other legislation. For example, the limitation period for Wills Variation Act claims is governed by the Wills Variation Act, rather than by the Limitation Act. The White Paper proposes that other limitation periods be listed on a Schedule to the reformed Limitation Act.

You may comment on the White Paper until November 15, 2010 by sending your comments as follows:

Civil Policy and Legislation Office
Justice Services Branch
Ministry of Attorney General
PO Box 9222 Stn Prov Govt
Victoria, B.C. V8W 9J1
Facsimile: 250 387-4525
Email: CPLO_Limitation@gov.bc.ca

2010 Canadian Conference on Elder Law

The Canadian Centre for Elder Law and the Law Commission of Ontario, with the support of the Advocacy Centre for the Elderly, are presenting the 5th annual Canadian (International) Conference on Elder Law.

This years conference will be held on October 28-30, 2010, at the Delta Chelsea Hotel in Toronto, Ontario, Canada.

The Canadian Centre for Elder Law website has the following information:

The conference will bring together Canadian and international experts, academics, lawyers and advocates to promote and advance the discussion of elder law issues.

The theme of this year's conference is "Developing an Anti-Ageist Approach to the Law". The conference will explore issues of elder rights, ageism and the law, access to justice, and law reform for older persons. The Advocacy Centre for the Elderly, a pioneer in promoting and protecting access to justice for older persons, will bring its unique expertise and perspective to the conference, developing a stream of conference programming.

The conference pre-day for the World Study Group on Elder Law will be held on October 28th, and will provide an opportunity for scholars in this area to present research updates and new work in this important field.

...

Registration for the 2010 Canadian Conference on Elder Law is now available! Attendees can register online or can download the registration brochure here. The brochure can be submitted either by fax to 1 (604) 822-0144 or by mail to the Canadian Centre for Elder Law at the following address:

Canadian Centre for Elder Law
1822 East Mall, UBC
Vancouver, BC V6T 1Z1
Canada

Regular registrants will receive a discounted Early Bird Rate of $599.00 until September 30, 2010. Registration for 2010 CCEL ends October 20th, 2010, so submit yours today!

Continuing Legal Education: Estate Litigation Basics 2010

The Continuing Legal Education Society of British Columbia is presenting a course for lawyers on Estate Litigation Basics at the Pan Pacific Hotel in Vancouver, B.C. on October 8, 2010 from 9:00 am to 4:00 pm.

I am going to be speaking on "Challenging Inter Vivos Transfers and Beneficiary Designations."

The course agenda is as follows:

Welcome and Introduction
Amy D. Francis — Legacy Tax +Trusts Lawyers, Vancouver

View From the Bench
The Honourable Madam Justice N. Victoria Gray — Supreme Court of British Columbia, Vancouver

Contested Committeeships
•medical evidence
•views of the proposed patient
•costs
•Adult Guardianship Act
Chelsea D. Wilson — Ramsay Lampman Rhodes, Nanaimo
Networking Break

Challenging Inter Vivos Transfers and Beneficiary Designations
•incapacity
•undue influence
•resulting trusts
•secret trusts
•constructive trusts
•fraudulent conveyance
Stanley T. Rule — Sabey Rule LLP, Kelowna

Construction of Wills

•armchair rule
•Doctrine of Cy-pres
•unborn contingent beneficiaries
•costs

Edward F. Macaulay — Edward F. Macaulay Law Corporation, Vancouver

Lunch (on your own)

Wills Variation Act
•history and overview of the Wills Variation Act
•balancing competing claims between spouses and children
•costs awards in Wills Variation Act cases
Amy A. Mortimore — Clark Wilson LLP, Vancouver

Practicing Estate Litigation: Expert Panel
•managing estate clients and their expectations
•organizing an estate case to avoid conflicts and negligence
•addressing practice challenges unique to estate litigation
Roger D. Lee — Davis LLP, Vancouver
Helen H. Low — Fasken Martineau DuMoulin LLP, Vancouver
Megan Swail — Lawyers Insurance Fund, Law Society of BC, Vancouver

Networking Break

Probate Actions and the Rules of Court
•challenges to the validity of a will
•impact of the new Civil Rules
•costs in probate actions
M. Scott Kerwin — Borden Ladner Gervais LLP, Vancouver

Dealing With the Problem Executor
•duties of executors—accounting requirements
•strategies to resolve disputes without a hearing
•the Registrar’s hearing—what to expect
Kimberly-Anne Kuntz — Bull, Housser & Tupper LLP, Vancouver

The course is being presented both live and by webnar. There will be video repeats throughout the province. For information on registration, check the CLE website here.

Desbiens v. Smith Appeal

When you apply for a grant of probate in British Columbia, you have to deliver a copy of the will and a notice of your intention to apply for the grant of probate to each of the beneficiaries of the will, and to those who may apply to vary the will under the Wills Variation Act, as well as to anyone who would receive a share of the estate if the deceased had died without a will. This is set out in section 112 of the Estate Administration Act.

The B.C. Court of Appeal has confirmed that these notice requirements are no mere formality. If the executor does not use reasonable diligence to find out the current addresses of those who are entitled to notice, the court may set aside a grant of probate. The case is Desbiens v. Smith, 2010 BCCA 394. I wrote about the trial decision here.

In his will, Charles Eldon Smith left everything to his widow. He had three adult children, with whom he had very limited contact. When he made his will, he did not tell his lawyer, whom he made his executor, about his children.

After his death, Charles Smith’s executor learned of the children. She found addresses in Mr. Smith’s address book. She sent the notice of her intent to apply for probate to these addresses, but the addresses were many years out of date. She did not make other efforts to find the children’s addresses.

Mr. Smith’s children found out about their father’s death three years after his death.

The three children then applied to vary their father’s will under the Wills Variation Act on the basis that he did not make adequate provision for them. But by the time they found out about their father’s death, the 6 month limitation period from the date of the grant of probate for bringing the claim had expired. The executor applied to have their claim dismissed on the grounds that the limitation period had expired.

The Supreme Court of British Columbia held that because the executor had not made reasonable efforts to give notice to the children, neither she nor Mr. Smith’s widow could rely on the limitation period.

The executor appealed. The Court of Appeal took a different approach from the Supreme Court Judge, but the effect is the same: the children may proceed with their Wills Variation Act claim. Mr. Justice Groberman for the Court of Appeal held that it was appropriate to revoke the grant of probate, and then issue a new grant to the executor. The limitation period would then begin to run from the date of the new grant of probate, with the effect that the children will be in time to pursue their claims.

In reaching his decision Mr. Justice Groberman discussed the notice requirements. He wrote at paragraph 28:

The notice requirement in s. 112 is a functional one – it is not a meaningless pro forma exercise. It is designed to ensure that the persons listed receive notice of probate. That function will not be fulfilled unless reasonable inquiries are made to ensure that the notices are sent to the correct addresses.

Then at paragraph 33:

[33] I do not suggest that executors and administrators face onerous requirements in determining the addresses of persons entitled to notice under s. 112 of the Estate Administration Act. All that is required is that the person giving notice exercise reasonable diligence in ascertaining the recipients’ addresses. In cases where, having exercised reasonable diligence, they still do not have confidence that they have obtained correct addresses, they must be fully candid in their affidavit in support of probate, and, in appropriate cases, should make application under s. 112(3) of the Act [which allows the court to dispense with notice on a person whose whereabouts are unknown].

Mr. Justice Groberman noted that one of the purposes of the requirement that notice be given is to ensure that anyone entitled to apply under the Wills Variation Act has notice that the estate is being administered. He wrote at paragraphs 66 through 68:

[66] With the enactment of dependent’s relief and wills variation legislation, a grant of probate (or of administration with will annexed) was given an ancillary purpose that was not present in ecclesiastical or common law: that of ensuring that all persons entitled to apply for relief under such legislation had notice that the estate was being administered. Where that purpose is not fulfilled, an important condition precedent for the grant is absent.

[67] The six-month limitation period under the Wills Variation Act is measured from the date that probate is granted for good reason. That is the date on which the court has signified that it is satisfied (by virtue of the requirements of s. 112 of the Estate Administration Act) that reasonable efforts have been made to notify persons having rights to apply under the Wills Variation Act.

[68] Where reasonable efforts to comply with s. 112 of the Estate Administration Act have not been made, probate should not issue. Where a grant of probate has issued notwithstanding a failure to comply with s. 112 of the Estate Administration Act, the Supreme Court has jurisdiction to revoke the grant, just as it would have if another condition precedent to the grant of probate had not been satisfied.

Mr. Justice Groberman held that it is appropriate in this case for the court to exercise its jurisdiction to revoke the probate, and issue a new grant to allow the Wills Variation Act claim to proceed. He noted that the children had brought their claims within six months of the date they found out that probate had been granted. Accordingly, they would not be unduly favoured by the revocation.