Does section 155 (1)(a) of the Wills, Estates and Succession Act permit an executor or administrator to distribute an estate within 210 days of a grant of probate or letters of administration with will annexed without the consent of a disinherited spouse or child, if all of the beneficiaries named in the will consent?
I have now discussed the meaning of section 155 (1) (a) with several other estate lawyers, and I think the wording of this section is quite ambiguous.
It may be useful to set out the section in its entirety to see the context.
Distribution of estate155 (1) The personal representative of a deceased person must not distribute the estate of the deceased person in the 210 days following the date of the issue of a representation grant except(2) The personal representative of a deceased person must not distribute the estate of the deceased person after the period referred to in subsection (1) without consent of the court if(a) a proceeding has been commenced to determine whether a person is or is not a beneficiary or intestate successor in respect of the deceased person's estate,
There are two ways to interpret subparagraph (1) (a). One is that the personal representative (executor or administrator) may make a distribution within the 210 day period if all of the beneficiaries consent provided that the will disposes of the entire estate. This is because (or so those holding this interpretation will argue) if the will disposes of the entire estate there are no “intestate successors entitled to the estate.” There are only intestate successors entitled to the estate if there is no will, or if the will does not dispose of all of the estate. This interpretation seems to correspond with the literal meaning of the words, and my sense is that this may be the most popular interpretation (although my handful of conversation is not exactly a scientific survey of lawyers).
I think the above interpretation is wrong, and it is risky for a personal representative to distribute within the 210 days without the consent of all of those who would be entitled to the estate if there were an intestacy, even though there is a will that disposes of the entire estate. If I am correct—and we won’t know until there is a court decision on point -- then their consent is required in addition to the consent of the beneficiaries.
My interpretation is based on the underlying purpose of section 155 which is to preserve the estate to allow those who wish to make certain claims, most notably claims to vary the will under Part 4, Division 6 of the Wills, Estates and Succession Act, time to do so. If anyone does make a claim to vary the will, the freeze on distribution is extended until the claim is resolved.
This section replaces section 12 of the now repealed Wills Variation Act, and its function is similar. Section 12 of the Wills Variation Act read:
No distribution until 6 months after probate12 (1) Until 6 months have passed from the issue of probate of the will in British Columbia or the resealing in British Columbia of probate of the will, the executor or trustee must not distribute any portion of the estate to beneficiaries under the will except(a) with the consent of all persons who would be entitled to apply, or(b) if authorized by order of the court.
The persons entitled to apply under the Wills Estates and Succession Act are the deceased’s spouse (including a common-law spouse), and the deceased’s children. Those are also the persons who would be entitled to a share of the estate if there is an intestacy.
The significance of the 210 day period is that it is the same time period a person claiming the vary a will has to both file a notice of civil claim in court (180 days) and serve it on the personal representative (a further 30 days).
If section 155 is interpreted to mean that only the consent of the beneficiaries are required if the will disposes of the entire estate, then the protection is significantly emasculated. If the will-maker leaves his entire estate to his nieces and nephews, and nothing to his spouse, then it is the spouse who will not want the estate is not distributed before she files her claim to vary the will. The nieces and nephews may be quite content to consent to an early distribution to them. It is no answer to say that the spouse can later pursue the beneficiaries for her share if she is successful in a claim to vary the will. She may, but it could be quite costly if there are many of them, or some live outside of British Columbia, and she may be without any practical recourse if they spend what they receive and have no other significant assets. Why have the provision at all if not to ensure that the estate is available if someone such as a disinherited spouse successfully applies to vary the will.
Furthermore, subsection 155(1) should be read in conjunction with subsection (2), which says that if proceedings are brought that may affect the distribution, including wills variation claims, then the prohibition on distribution is extended, and the personal representative requires the court’s consent to make a distribution. It would be inconsistent to allow the personal representative to distribute within 210 days without the consent of a disinherited spouse or child, or a court order, but then require a court order after that time period if the spouse or child does file a wills variation claim.
The other problem with the interpretation that the personal representative does not have to get consent for an early distribution of those intestate heirs who are not named in the will, is that the personal representative does not really know who is ultimately “entitled to the estate” until after the time for bringing a claim has passed. If in our example of the disinherited spouse, the spouse does apply to court to vary the will, and is ultimately successful, she will be entitled to a share of the estate by virtue of the court order varying the will. But that will not be determined until well after the personal representative has distributed the estate if he or she has done so within the 210 days after probate.
Section 155 is broader than section 12 of the Wills Variation Act, and is intended to freeze the estate until other potential issues are resolved. For example, a person may seek a court interpretation of a will to determine if he or she is a beneficiary. Or there may be a disagreement about whether a person is a “spouse” as defined by the Wills, Estates and Succession Act.