Sunday, March 17, 2013

B.C.'s New Family Law Act Is Likely to Affect Future Wills Variation Act Claims

British Columbia’s new Family Law Act will come into force tomorrow, March 18, 2013.

In addition to the far reaching implications the new legislation will have for married and those unmarried couples who meet the criteria of spouses in section 3 on the breakdown of a marriage, the Family Law Act will likely have an impact on the rights of a surviving spouse on the death of the other.

You have to look beyond the provisions of the new Act to consider its implications on the rights of a surviving spouse to the Wills Variation Act and the cases decided under that legislation.

The Wills Variation Act provides that if a deceased person had not made adequate provision in his or her will for a spouse or children, and an application is made to the Supreme Court of British Columbia, the Court may make such provision as the Court considers “adequate, just, and equitable in the circumstances.”

The Supreme Court of Canada, in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807, set out an analytical framework for determining what provision is adequate, just and equitable, which I have written about here. Madam Justice McLachlin wrote that the courts should consider the deceased’s legal obligations just before death to his or her spouse and children. In the case of a spouse, the legal obligations include those obligations set out in provincial law governing the division of assets on the breakdown of a marriage. After considering the deceased’s legal obligations, the court then considers the deceased’s moral obligations to his or her spouse and children.

The changes in the new Family Law Act to the division of assets on the breakdown of marriage or of a marriage-like relationship will likely affect a court’s determination of the deceased’s legal obligations following the analysis in Tataryn.

There are at least a couple of fundamental changes to the division of property in the new Act. First, the division of property provision now applies to certain unmarried couples, because a “spouse” now includes a person who has lived with another person in a marriage-like relationship, and has done so for a continuous period of at least 2 years.

Secondly, under the old Family Relations Act, there was a presumption that each spouse was entitled to half of the “family assets” as defined in the legislation, although the court could reapportion assets if an equal division would have been unfair.

Under the Family Law Act, the focus is on the accumulation of wealth during the marriage (or marriage-like relationship in the case of unmarried spouses). “Family property,” is divided equally, but some categories of property, including property acquired by a spouse before the relationship began is excluded from “family property.” But the increase in the value of the excluded property since the relationship began (or since it was acquired if excluded property is acquired during the relationship) is divided equally. The spouses may agree to a different division, and the court may order an unequal division if an equal division of family property would be “significantly unfair.”

To the extent that the Family Law Act changes the legal obligations a now deceased spouse would have had on the breakdown of the relationship to a surviving spouse, this may affect the Court’s assessment of whether the provision made in the will meets the deceased’s legal obligations, and ultimately on whether the deceased made adequate provision for his or her spouse in the will.

In some cases, the legislative change may weaken the surviving spouse’s claim. For example, if the deceased acquired most of his or her wealth before the relationship, the deceased’s legal obligations may be met by a lesser provision for the surviving spouse under the new Act than under the old Family Relations Act.

On balance, I expect that the new legislation will strengthen the claims of many common law spouses (especially those who were in long-term relationships with their deceased spouses) who would not have had a claim to a division of property under the old legislation.

But it should be borne in mind that under the Wills Variation Act, the court may also consider the deceased’s moral obligations, and this may reduce the impact of changes to the family law legislation in Wills Variation Act claims. For example, in some cases, an example being Pickets v. Hall, 2009 BCCA 329 (which I wrote about here), the courts have found that a deceased common law spouse had a significant moral obligation to the surviving spouse even if the deceased had met his or her legal obligations in the will. A court may make a substantial variation on the basis of those moral obligations.

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