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. 

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.

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

6  (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.