Saturday, July 25, 2015

World War I Probate


Kimberly Wallis gave me a copy of a grant of probate from the United Kingdom dated October 28th, 1914. The process for obtaining a grant of probate appears to have been very efficient in those days, as the deceased had died just 23 days earlier, on October 5, 1914.

What was most striking about the grant was the page stapled to it, which read:

This Grant is made upon the condition that no portion of the assets shall be distributed or paid during the War to any beneficiary or creditor who is a German or Austro-Hungarian subject wherever resident, or to any one on his behalf, or to or on behalf of any person resident in Germany or Austria-Hungary, of whatever nationality, without the express sanction of the Crown, acting through the Treasury; and if any distribution or payment is made contrary to this condition the Grant of Probate or Letters of Administration will be forthwith revoked.

Upon an application to the Solicitor to the Treasury there will be no difficulty in proper cases in obtaining the sanction of the Treasury to the payment of a moderate sum out of assets to beneficiary or creditors who are German or Austro-Hungarian subjects resident in this country at the commencement of the War and during the War.

Sunday, July 19, 2015

Amendments to Probate Rules Include Provision for Substitution of Personal Representative on Death


As I wrote acouple of weeks ago, the probate rules were amended effective July 1, 2015. Among the changes is a new provision dealing with the procedure for appointing a new personal representative (executor or administrator) when the deceased’s personal representative dies before completing the administration of the estate.

The new provision, Rule 25-14 (1.2) reads as follows:

Substitution of personal representative in the event of death

(1.2)If a deceased's personal representative dies, a person may apply in accordance with Part 8, subject to any directions given by the court under subrule (8) of this rule, to be substituted as the personal representative by filing 

(a) a copy of the death certificate of the personal representative,

(b) an affidavit setting out the request to be substituted as the personal representative and specifying the right to be appointed as personal representative on the basis that the person is one of the following:

(i)   the alternate executor;

(ii)   entitled to apply for administration of the estate in accordance with section 130 of the Wills, Estates and Succession Act;

(iii)   entitled to apply for administration with will annexed in accordance with section 131 of that Act, and
 
 
(c) an affidavit confirming delivery of the affidavit referred to in paragraph (b) to
(i)   every person who was entitled to notice under the original application, and
(ii)   any executors who
(A)  did not receive notice of the original application, and
(B)  have an equal or greater right to apply to be the personal representative.

 
As I read this provision together with Part 8 of the Supreme Court Civil Rules, which deals with how applications are made to court, in most cases, a person applying under this section (or his or her lawyer) will need to appear for a hearing before a judge or court master. Part 8 contemplates a hearing unless the order is one that may be made without notice or by consent of all of the parties. In most cases there will be persons to whom notice must be given, and it is not always convenient to have all parties sign a consent order, or there may be minors or others without capacity to consent.

Unless contested, the hearing should be straightforward, but with the need to appear, and wait in court while other matters are heard, the expense may be higher than if the order could be obtained by desk order (without a hearing).

The application may be made by an alternate executor, if the first named executor dies after probate. It may also be necessary if there are two executors, but he will provides that if one dies, and alternate is appointed. If there is no alternate named, then another person may apply to be appointed as an administrator.

Section 130 of the Wills, Estates and Succession Act sets out the order of priority for appointment as an administrator if there is no will, while section 131 sets out the order of priority if there is a will, but there is no executor or alternate executor willing and able to act. These sections are as follows:

Priority among applicants — intestate estate

130  If a person dies without a will, the court may grant administration of the deceased person's estate to one or more of the following persons in the following order of priority:

(a) the spouse of the deceased person or a person nominated by the spouse;

(b) a child of the deceased person having the consent of a majority of the children of the deceased person;

(c) a person nominated by a child of the deceased person if that person has the consent of a majority of the deceased person's children; 

(d) a child of the deceased person not having the consent of a majority of the deceased person's children; 

(e) an intestate successor other than the spouse or child of the deceased person, having the consent of the intestate successors representing a majority in interest of the estate, including the intestate successor who applies for a grant of administration; 

(f) an intestate successor other than the spouse or child of the deceased person, not having the consent of the intestate successors representing a majority in interest of the estate, including the intestate successor who applies for a grant of administration; 

(g) any other person the court considers appropriate to appoint, including, without limitation, and subject to the Public Guardian and Trustee's consent, the Public Guardian and Trustee. 

Priority of applicants — administration with will annexed

131  If a person dies leaving a will, and the executor named in the will renounces executorship or is unable or unwilling to apply for a grant of probate, or if no executor is named in the will, the court may grant administration with will annexed to one or more of the following persons in the following order of priority: 

(a) a beneficiary who applies having the consent of the beneficiaries representing a majority in interest of the estate, including the applicant;

(b) a beneficiary who applies not having the consent of the beneficiaries representing a majority in interest of the estate;

(c) any other person the court considers appropriate to appoint, including, without limitation, and subject to the Public Guardian and Trustee's consent, the Public Guardian and Trustee.

Finally, if the “chain of executorship applies” (see my previous post), it will not be necessary for anyone to apply under Rule 25-14 (1.2). If the executor dies after receiving an estate grant, but before completing the estate administration, and the will does not name any other executor or alternate executor willing and able to apply, the executor of the now deceased executor may complete the administration. The executor’s executor will need to probate the will of the deceased executor.

The authority of the executor’s executor is confirmed in section 145 of the Wills, Estates and Succession Act:

Executor of deceased executor

145  If a deceased will-maker was an executor of a person who died before the will-maker, the executor of the deceased will-maker has all the rights, powers, rights of action and liabilities of the deceased will-maker with respect to the estate of the deceased person.

Saturday, July 11, 2015

2015 Canadian Conference on Elder Law



The Canadian Center for Elder Law together with the Continuing Legal Education Society of British Columbia are presenting a two day conference: The Journey of Aging – the Law and Beyond. The conference will be held on Thursday and Friday, November 12 and 13, 2015 at the Pan Pacific Hotel, 999 Canada Place, Vancouver, B.C. Here is the description from the CCEL website: 

DAY 1: Connecting Across Discipline and Geography
Join practitioners from law, social work, health care, finance, non-profit and other sectors from across the country and around the world to talk about the challenges and issues involved in working with older adults.

DAY 2: Key Practice Challenges and Hot Topics in Legal Practice
Explore issues engaged in powers of attorney and substitute decision-making, health care decision-making and end of life care, mental capacity and dementia, elder abuse and neglect, and other challenging subjects that arise in representing older adults and their families.

Keynote speakers will include:
  • Isobel Mackenzie, BC’s Senior’s Advocate
  • Dr. Andrew Wister, Chair, National Senior’s Council
  • Barb MacLean, Chair, BC Council to Reduce Elder Abuse
Confirmed presenters:
  • Catherine Romanko, BC Public Guardian and Trustee
  • Andrew S. MacKay, Alexander, Holburn, Beaudin and Lang
  • Geoffrey W. White, Geoffrey W. White Law Corporation
  • Diedre J. Herbert, McLellan Herbert
  • John-Paul Boyd, Canadian Research Institute for Law and the Family
  • Anna Laing, Fasken Martineau
  • Kimberly A. Whaley, Whaley Estate Litigation
  • Honourable Marion J. Allan, Clark Wilson LLP
  • Barbara Buchanan, Law Society of BC
Panels will include:
  • Advance health care planning—implications of the Bentley decision
  • Debate: Would a national power of attorney registry help reduce elder financial abuse?
  • Update on guardianship law in BC—what’s happening one year after legislative change
  • Who do you call when you suspect elder abuse? Introducing the new BC decision tree
  • Physician assisted suicide after Carter—where do we go from here?
  • Late life separation and divorce
  • Dementia and client competency: practice tips, communication strategies and ethical issues
  • The when and how of mental capacity assessments

Registration information is available on the CLEBC site here.

Sunday, July 05, 2015

Changes to Probate Rules and Forms Effective July 1, 2015


Changes to the Probate Rules and Forms were brought into effect on July 1, 2015—that’s right, four days ago. I had heard that changes were coming, but I didn’t know what they were until very recently. The online consolidated Supreme Court Civil Rules has not as of today been updated to include the changes, but you can find them in B.C. Reg. 103, 2015 here.

There is a significant change to the procedure for making applications relating to estate grants in Rule 25-14. Under the rules as they stood before the amendments, many types of applications would be commenced by either a notice of application, if an estate file is already opened, or by requisition if nothing has been filed in relation to the estate. The types of proceedings to which this applies includes some potentially very contentious disputes such as passing over an executor. A requisition is a request to the court, and there are no rules saying who must be served, what they file to oppose it, or how long they have to file. Starting a contested proceeding by requisition doesn’t make sense.

Fortunately, as amended Rule 25-14 will now provide that where there has been an application for an estate grant, an application may be made by notice of application, but if there has not been an estate grant, then you may start a proceeding by a petition. In some cases, such as passing over an executor, it will be mandatory to start the proceeding by a petition rather than by a requisition. This makes a lot more sense.

Here are the amendments to Rule 25-14 (1) and (1.1), with deletions crossed out, and additions underlined:


(1)A person If there has been an application for estate grant, a person may apply in accordance with Part 8, or, if nothing has been filed in relation to the estate, may, despite Rule 2-1 (1) and (2) (a) and (b), apply by requisition in Form P41, for an order

(a) under Rule 25-2 (14),

(b) granting administration with or without will annexed in circumstances in which the right to be appointed as the administrator is contested,

(c) revoking an authorization to obtain estate information or estate grant or an authorization to obtain resealing information or the resealing of a foreign grant,

(d) subject to subrule (1.2), removing or substituting a personal representative or, if different, the holder of an authorization to obtain estate information or the holder of an authorization to obtain resealing information,

(e) discharging a personal representative or, if different, the holder of an authorization to obtain estate information or the holder of an authorization to obtain resealing information,

(f) passing over an executor,

(g) appointing an administrator of an estate under section 132 of the Wills, Estates and Succession Act,

(h) removing or renewing a notice of dispute,

(i) that a foreign grant of probate or administration not be resealed,

(j) requiring security for the administration of an estate,

(k) varying or substituting security for the administration of an estate,

(l) directing that security be assigned to a person named in the order,

(m) respecting production, delivery or filing of

(i)   a testamentary document,

(ii)   a certified or notarial copy of an authorization to obtain estate information,

(iii)   an estate grant,

(iv)   an authorization to obtain resealing information, or

(v)   a resealed foreign grant,

(n) Repealed. [B.C. Reg. 44/2014, Sch. 1, s. 12 (c).]

(o) for the passing of accounts,

(p) fixing and approving the remuneration of a personal representative, or

(q) subject to subrule (2), respecting any other matter concerning

(i)   an authorization to obtain estate information,

(ii)   an authorization to obtain resealing information,

(iii)   a grant of probate,

(iv)   a grant of administration with or without will annexed,

(v)   an ancillary grant,

(vi)   a resealing, or

(vii)   the office of personal representative,

other than a question or matter covered by Rule 2-1 (2) (c) or (d).

How to apply by petition for orders

(1.1) If there has been no application for estate grant, a person may, with notice, apply by petition to the court for an order

(a) passing over an executor,

(b) appointing an administrator of the estate under section 132 of the Wills, Estates and Succession Act,

(c) respecting production, delivery or filing of a testamentary document, and

(d) subject to subrule (2), respecting any other matter referred to in subrule (I).

Sunday, June 28, 2015

What Does Section 155 of the Wills, Estates and Succession Act Really Mean?



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 estate

155 (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
(a) with the consent of all beneficiaries and intestate successors entitled to the estate, or
(b) by order of the court.
(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,
(b) relief is sought under Division 6 [Variation of Wills] of Part 4 [Wills], or
(c) other proceedings have been commenced which may affect the distribution of the estate.
(3) Nothing in this section
(a) affects any right or remedy against a person to whom an estate has been distributed in whole or in part, or
(b) extends any applicable limitation period.

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 probate

12  (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.
(2) Until the period referred to in subsection (1) has passed, a title passing by devise to a beneficiary must not be registered in a land title office unless under a similar consent or order, except subject to the liability of being charged by an order made under this Act.

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. 

Saturday, June 20, 2015

Leah Schurian Joins Sabey Rule LLP

I am pleased to write that Leah Schurian has joined our firm.

While I write frequently about estate disputes, Leah is focused on avoiding disputes through good planning, including estate and business planning. Good planning also reduces the risk of lawsuits in case of a breakdown of a marriage or marriage-like relationship. With that in mind, she drafts and advises on marriage and cohabitation agreements.

Leah also practices real estate law.

Sunday, June 07, 2015

Limitation Period for Contesting the Validity of a Will



What is the limitation period for bringing a claim in British Columbia for contesting the validity of a will under the new Limitation Act?

Perhaps the Limitation Act, SBC 2012, c. 13, is not that new anymore, having come into effect over two years ago on June 1, 2013. But under the transition rules, the previous legislation continues to apply to many claims, and for convenience I will refer to the current Act as the new Limitation Act. In a previous post, I wrote about how the new Limitation Act works.

As far as I know, there have been no reported decisions applying the new Limitation Act to claims contesting the validity of wills in British Columbia. But if an Ontario case, Leibel v. Leibel, 2014 ONSC 4516 (Canlii), is applied in British Columbia, the limitation period may in some cases be as early as two years following the date of death.

Eleanor Leibel died on June 4, 2011. She made two wills on April 9, 2011, one of which is referred to as a primary will, and which her estate trustees probated, and the other, referred to as her secondary will, disposed of assets for which probate was not required in Ontario. She made her wills while terminally ill with brain cancer. She appointed her sister and her separated husband as her estate trustees, and left her estate to her children, Blake Leibel and Cody Leibel. Under her wills, Blake Leibel received a larger share of her assets.

Blake Leibel wrote to the lawyer who drafted the wills a couple of weeks after his mother’s death, expressing concern about the appointment of the trustees, and asking for referrals for independent advice. One of the estate trustees sent copies of the Wills to Blake Leibel who lived in California by Purolator on July 12, 2011.

The Estate Trustees made distributions to Blake Leibel, and, he lent money to a corporation to pay estate income tax liabilities.

On September 5, 2013, Blake Leibel brought an application for a declaration that the 2011 wills were invalid, on the stated grounds that his mother did not have capacity to make the wills, and that she was unduly influenced in making them. Under one of her previous wills, he would have received her entire estate to the exclusion of his brother.

The estate trustees applied to dismiss the application in part on the basis that the limitation period had expired. In reaching her decision that the limitation period for bringing the claim had expired, Madam Justice Greer set out the applicable provisions of Ontario’s legislation as follows:


[35]           In my view, the provisions of the Act apply with respect to Blake’s Application being outside the limit under the Act.  Section 4 of that Act states:
Unless the Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. 
 and Section 5(1) states:
A claim is discovered on the earlier of,
(a)   the day on which the person with the claim first knew,
(i)     that the injury, loss or damage had occurred,
(ii)   that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b)   the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Subparagraph 5(2) of the Act, says that a person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.


Madam Justice Greer found that by July 31, 2011,Blake Leibel had sufficient information to commence a claim. She wrote,


[39]           In applying the “discoverability principle,” Blake had the knowledge to commence a will challenge on or before July 31, 2011.  By that date he knew the following facts:
(a)   Prior to Eleanor’s death Blake knew that Eleanor had recovered from lung cancer but now had brain cancer. 
(b)   He knew Eleanor had changed her previous Wills.
(c)   He knew the date of Eleanor’s death, as Lorne had called him and Cody on that date.
(d)   He received copies of the Wills prior to July 31, 2011, and he knew who the Estate Trustees were under the Wills.
(e)   He knew what Eleanor’s assets were. He had at least a sense of her income, as she had been sending him monthly cheques before the date of her death and had a sense of the value of her assets. 
(f)   He signed corporate documents for a company now owned by her Estate prior to July 31, 2011.
(g)   He had communicated with Ms. Rintoul about his concerns and she gave him the names of three estates counsel to consider, as independent legal advisors. 
Blake, therefore, had all of the information needed to begin a will challenge.  He chose, instead, to take many of his benefits under the Wills before he commenced his Application.  


Madam Justice Greer held that the two year limitation began to run from the date of death, on June 4, 2011. In this respect, the judgment may be open to the criticism that Madam Justice Greer did not apply the discovery principle (although perhaps the presumption in subsection 5(2) applied), but in view of her finding that Blake Leibel had sufficient knowledge by July 31, 2011, and he commenced his application more than two years after that date, he would have been out of time in any event. 

Because the decision is an Ontario decision, it is not binding on British Columbia courts, but may be persuasive in view of the similarities between the provisions of the Ontario legislation and British Columbia’s new Limitation Act. Section 6(1) of B.C.'s Act provides for the basic limitation period as follows:


Basic limitation period

(1) Subject to this Act, a court proceeding in respect of a claim must not be commenced more than 2 years after the day on which the claim is discovered.


The discovery rule in British Columbia is set out in section 8:


General discovery rules

8  Except for those special situations referred to in sections 9 to 11, a claim is discovered by a person on the first day on which the person knew or reasonably ought to have known all of the following:
(a) that injury, loss or damage had occurred;
(b) that the injury, loss or damage was caused by or contributed to by an act or omission;
(c) that the act or omission was that of the person against whom the claim is or may be made;
(d) that, having regard to the nature of the injury, loss or damage, a court proceeding would be an appropriate means to seek to remedy the injury, loss or damage.


Although the limitation period may in some cases begin to run from a date later than the date of death by virtue of the discovery rule, the safe course for anyone wishing to challenge the validity of a will is to file an application in court before the second anniversary of the date of the will-maker’s death.

It should be noted that there are different limitations for different types of estate litigation. For example, wills variation claims under the Wills, Estates and Succession Act must be brought within 180 days from the date of probate. The limitation period is shorter, but does not begin to run until probate.