Saturday, October 20, 2012

Death-bed Will: Machander v. Drader

Perhaps the most difficult circumstance an estate-planning lawyer may encounter is a telephone call advising that someone dying in the hospital wishes to make a new will. The call usually comes from a family member or friend, who may be a potential beneficiary of the dying person’s will. Does the lawyer have a couple of weeks, a couple of days, or a few hours to get instructions, draft and get the new will signed? Does the dying person have the mental capacity to make a new will? Is he or she vulnerable to undue influence?

In less pressing circumstances, a lawyer can arrange a full interview with the will-maker alone, ask detailed questions to determine if there is any reason to be concerned about capacity or improper influence, and draft a will for the will-maker to review before a later appointment at which the will can be signed. If the lawyer has any reason to be concerned about capacity, he or she can with the will-maker’s permission speak with the will-maker’s physician. Those are steps a lawyer can take when the will-maker is not near death.

But in the case of a death-bed will, the lawyer who takes all of these steps runs a significant risk that his or her client will die before the will is signed, leaving the dying person either without a will or one that no longer reflects his or her wishes.

Mr. David Mulroney, an experienced lawyer in Victoria, British Columbia, received such a call. Marlys Drader telephoned him on November 15, 2010, and advised him that David Machander was seriously ill in hospital and wanted to make a will. She was living in a marriage-like relationship with Mr. Machander, who was legally married to, but separated from, Mary Machander. Mr. and Mrs. Machander’s divorce was nearing completion.

Mr. Machander had been trying for several months to contact a lawyer who had acted for him previously for several months in order to change his will.

After trying to contact Mr. Machander’s former lawyer, Mr. Mulroney arranged to meet with Ms. Drader in the hospital later that same day. He asked her to wait for him before seeing Mr. Machander. Mr. Mulroney went to the hospital with his legal assistant taking some documents, including a draft will that was ultimately signed. Ms. Drader introduced Mr. Mulroney to Mr. Machander. As had been discussed, Ms. Drader left the room so that Mr. Mulroney could speak with Mr. Machander without her being present.

Mr. Mulroney video taped the meeting. Before showing Mr. Machander the draft will, Mr. Mulroney asked him open-ended questions about who he wanted to benefit in his will. Although there was some ambiguity in his answers in that he referred at times to Ms. Drader receiving half of his assets, Mr. Mulroney understood and confirmed that his intentions were to be to leave everything to Ms. Drader.

Mr. Mulroney asked Mr. Machander about who he would want to benefit if Ms. Drader did not outlive him. He said “just her.”

He asked a few other questions such as what year it was and where Mr. Machander lived, both of which Mr. Machander were able to answer.

After questioning Mr. Machander, Mr. Mulroney took out the will and reviewed it with him. The draft will was quite simple, and included a gift of the residue of Mr. Machander’s estate to Ms. Drader if she survived him by 14 days, with a provision that if she did not survive him by 14 days, his estate would go to his parents. Because he did not confirm the gift to his parents, Mr. Mulroney crossed that provision out.

Mr. Machander then signed the will in the presence of both Mr. Mulroney and his assistant, both of who also signed as witnesses in the presence of Mr. Meander and each other.

David Machander died three days later.

Mary Machander and other beneficiaries of a previous will Mr. Machander made in 2003 challenged the validity of the 2010 will. They argued that Marlys Drader, as his executor had not met the burden of proving the validity of the 2010 will in light of what they claimed were suspicious circumstances surrounding the preparation of the will, and his capacity to make a will.

Mr. Justice Savage in Machander v. Drader, 2012 BCSC 1492 (CanLII), summarized the legal principles:

[37] The propounder of a will has the burden of proving that the testator knew and approved the contents of his or her will. In doing so, the propounder is aided by a rebuttable presumption. 
 [38] Once it is established that the will was read by the testator, or the contents otherwise brought to his or her attention, and that he or she appeared to understand it, the testator will be presumed to know and approve of the will: see for example Vout v. Hay, [1995] 2 S.C.R. 876 at para. 26, 125 D.L.R. (4th) 431, in the context of a testamentary gift; Barkwill v.Parchomchuk, 2011 BCCA 207 at para 15; Maddess v. Estate of Johanne Gidney, 2009 BCCA 539 at para. 29; and York v. York, 2011 BCCA 316 at para. 36, 335 D.L.R. (4th) 292. 
 [39] The will was read in the presence of Mr. Machander and he appeared to understand it, therefore the presumption in favour of the will would normally apply. 
[40] The presumption in favour of a will can be rebutted by evidence which, if accepted, would tend to negative knowledge and approval. This is known as the suspicious circumstances doctrine. If the presumption is rebutted, the propounder of the will is required to prove the will on a balance of probabilities. 
[41] As often happens with the elderly or infirm, a will may be prepared, or its preparation is obtained, by a person who takes a benefit under it. While the beneficiary may not have procured the will under coercion or fraud, which is not alleged here, these are circumstances that may arouse the suspicion of the Court: Barry v. Butlin, (1838) 2 Moo. P.C. 480 at 482-83.

[42] In Vout v. Hay, Sopinka J. at para. 27 referred to the doctrine:
Where suspicious circumstances are present, then the presumption is spent and the propounder of the will reassumes the legal burden of proving knowledge and approval. In addition, if the suspicious circumstances relate to mental capacity, the propounder of the will reassumes the legal burden of establishing testamentary capacity. Both of these issues must be proved in accordance with the civil standard. There is nothing mysterious about the role of suspicious circumstances in this respect. The presumption simply casts an evidentiary burden on those attacking the will. This burden can be satisfied by adducing or pointing to some evidence which, if accepted, would tend to negative knowledge and approval or testamentary capacity. In this event, the legal burden reverts to the propounder.
[43] As noted by Garson J.A. in York, the testamentary capacity test is set out in the leading English case: Banks v. Goodfellow (1870), L.R. 5 Q.B. 549 at 565, which was adopted by Wilson J.A. in Re: Rogers (1963), 39 D.L.R. (2d) 141 (C.A.) at 148-49, 42 W.W.R. 200:

It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties — that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.

Mr. Justice Savage found that the will was valid. With respect to the argument that there were suspicious circumstances, he wrote:

[45] Do the circumstances surrounding preparation of the will raise the spectre of suspicious circumstances? In my view they do not, for the following reasons, which I find established on the evidence:

a) Mr. Machander had long held the view that the 2003 Will was outdated and did not reflect his current circumstances. The will was outdated and inappropriate. It gave the residue of his estate to an estranged spouse with whom he had divided assets and was on the eve of obtaining an order absolute of divorce; 
 b) Mr. Machander advised others of his intention to change his will, including third parties other than the beneficiary of the 2010 Will. He tried to act on that intention but was frustrated by being unable to locate his former solicitor; 
 c) Mr. Machander revoked the 2003 Will and replaced it with the 2010 Will which made the woman with whom he was in a marriage-like relationship his beneficiary. There is nothing in the details of that relationship that give rise to a suspicion that it was anything but genuine and loving; 
 d) The change in the will was entirely appropriate from the standpoint of his current relationship and the lack of a close relationship with his parents and siblings, i.e., the absence of there being any other moral claim on his beneficence; 
 e) Although the beneficiary contacted the solicitor regarding the contents of the 2010 Will, Mr. Machander’s condition did not allow him to make direct contact. Ms. Drader was the logical choice to convey his wishes; and 
 f) The taking of the will was by an experienced solicitor. The solicitor had no significant relationship to any person in the proceeding. The solicitor was entirely forthright in his evidence. A video record of the proceeding was made of the events for the court or any interested person to view.

Mr. Justice Savage found that Mr. Machander did know and approve of the contents of the will. Mr. Machander also had capacity to make a will. He understood that he was making a will, and had expressed a continuing intention to make one. He understood the property he intended to dispose of, which consisted primarily of a bank account with funds from the division of his matrimonial property. He comprehended whom he wanted to benefit, having expressed his intention to benefit Ms. Drader to at least one other person. He understood the manner in which his assets would be distributed.

Often in these cases, the court needs to rely on the evidence of the lawyer who drew the will. In this case, the court found Mr. Mulroney’s decision to video tape the interview quite helpful. Mr. Mulroney was able to give the court a complete and accurate record of what occurred.

I suggest that there are at least two other aspects of the process Mr. Mulroney followed that are important. First, after the introductions, he excluded Ms. Drader from the room during his interview with Mr. Machander. Had she been present, it would have been more difficult to confirm that what Mr. Machander said he wanted reflected his own wishes, or whether he said he wanted to benefit her because she was present and he didn’t want to offend her. Secondly, Mr. Mulroney asked him questions about his wishes before showing him the draft will. Had Mr. Mulroney shown him the will first, or relayed the instructions that Ms. Drader had given to Mr. Mulroney before questioning him, it would be more difficult to determine if Mr. Machander truly comprehended those he wished to benefit or consider, or if, instead, he was merely repeating what he read or was told.

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