CONTESTING A WILL OR AN ESTATE

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1 CONTESTING A WILL OR AN ESTATE I. INTRODUCTION There are a numbers of ways to "contest" a will or estate - challenge the validity of the Will, vary the terms of the Will or make another type of claim against the estate. The following discussion is a general overview of the legal principles involved and is only applicable to the law in British Columbia. If you have a situation arising in another province or country, you should contact a lawyer in that jurisdiction as all provinces and countries have their own legislation that governs these issues. II. CHALLENGING THE VALIDITY OF A WILL In order to challenge the validity of a Will, a probate action must be commenced. If a Will appears to be executed properly, the Court will deem it to be valid unless someone comes forward with allegations of improper execution, testamentary incapacity, or undue influence. Usually those making the allegations are beneficiaries named under a prior Will or beneficiaries if, as a result of the Will being declared invalid, the deceased will die without a will (i.e. dies intestate). One of the executor's duties is to try to uphold the validity of a Will. The executors must prove that the Will was properly executed and that the testator had "testamentary capacity." The person alleging undue influence must prove that aspect. If these types of allegations are made, the executor will commence a probate action to "prove the will in solemn form". A caveat can be filed by a beneficiary or interested party setting out the allegations - this prohibits the Will from being probated in "common form" - i.e. without commencing an action or having a trial to prove the will. If the Will has already been admitted to probate in common form, i.e. a grant of probate has been issued to the executor, a probate action can still be commenced but it is preferable to start the action before probate is granted. If the Will is found to be invalid, the testator's next most recent Will would be used. It is also possible that this next most recent Will is not valid and in that case, the Will before that would be used. If there is no prior valid Will, the deceased will have died intestate and the deceased's estate will be distributed according to the legislation dealing with estate administration and intestacy situations which in British Columbia is the Estate Administration Act.

2 - 2 - A. Will not Properly Executed In British Columbia, the Wills Act governs the execution of Wills. If the letter of the law is not followed, the Will is not valid. For example, the will must be in writing and the executed in the presence of two witnesses. Wills that are done at home often have not been executed properly and the Will is then invalid. Other provinces, such as Manitoba, allow holograph wills (i.e. handwritten but unwitnessed Wills). If you have moved to B.C. from another province or country, it is a good idea to have your Will reviewed by a lawyer in here in B.C. B. Testamentary Incapacity The testator, at the time the will is executed, must have "testamentary capacity" - i.e. they must know what a Will is, they must know generally the nature of their assets (what property they own, the approximate value of the property, what bank accounts and their approximate balances etc.), they must know to whom they owe a moral duty (are they married, do they have children, are they in a common law relationship) and they must be free from delusions. If a testator does not have testamentary capacity, any Will they execute will not be valid. If a probate action is commenced and one of the allegations is lack of testamentary capacity, the executors must produce evidence to show that the person did have testamentary capacity. This often means that the evidence of the witnesses to the Will, the person who drafted the Will and the testator's doctor will be required at the trial to prove that the testator had the necessary testamentary capacity. C. Undue Influence The individual alleging undue influence, unlike allegations of improper execution and testamentary capacity, must prove that the Will in question was a result of undue influence and that the Will does not reflect the testator's free wishes. This is a very difficult allegation to prove and will depend on the facts surrounding the testator giving Wills instructions, the execution of the Will, who the stands to benefit from the Will, to whom the testator owed a duty etc. If the primary beneficiary under the new Will is the person holding a power of attorney for the testator, the care-giver for the testator, or a stranger this raises a suspicion that the testator may have been unduly influenced. Similarly if the primary beneficiary gave the Wills instructions and was present during execution, a

3 - 3 - presumption of undue influence may also arise. If undue influence can be proven, the Will would be invalid. See the case comment on Vout v. Hay. III. WILLS VARIATION ACT If there is a valid Will, a Will can be varied under the British Columbia Wills Variation Act. Each of the provinces have their own"dependents relief" legislation and if a person died outside of B.C., a lawyer in the province or country where the person died should be contacted. In B.C. only the spouse or children of the deceased can apply to have the Will varied. Some provinces and territories limit claims to children under a certain age whereas in B.C. adult children can apply. Once a Will has been admitted to probate the person or persons entitled to apply under the Wills Variation Act may commence an action against the estate to try and vary the Will. In B.C. a Wills Variation Act action must be commenced within six months from the date of probate. The courts, in deciding whether to vary a Will, consider the size of the estate, the financial means of the various claimants, the relationship the claimants had with the deceased, and whether they received any gifts outside of the Will on the deceased's death (such as the proceeds from a life insurance policy) or received gifts during the deceased's lifetime. When making estate planning decisions, you may want to consider options that will avoid the Wills Variation Act. One option is to die without a will whereby the distribution of your estate will be governed by the Estate Administration Act. Another option is to ensure there are no assets in the estate on death by way of trusts created during your life time, joint tenancy holdings of property and bank accounts, and beneficiary designations on insurance policies, R.R.S.P.s and R.I.F.s. If there are few assets left in your estate on death, potential claimants may be discouraged from advancing a claim given the small monetary value of the estate. If gifts or transfers of assets into joint names were made at a time when the deceased did not have the mental capacity to make those transfers or gifts, or was unduly influenced, a disappointed claimant or the estate could commence a trust claim seeking to have those assets put back into the deceased's estate, thereby making the variation action more viable. See the article on "Undue Influence". IV. INTERPRETING WILLS

4 - 4 - If the language contained in a Will is too vague or uncertain, the Executor may have to apply to Court to have the Will interpreted. Examples of uncertainty are as follows: if a beneficiary is not clearly defined (for example a charity named no longer exists), or if a property is not clearly defined (for example, the testator purports to give away a property when in fact the building was owned by a company in which he held 100% of the shares). It may also be necessary to interpret certain clauses in the Will that give the Executor authority to do certain tasks - if the wording is uncertain the Executor will apply to have the Court clarify the boundaries within which he can administer the estate without repercussion. These types of applications are simply a matter of legal argument and the Will is interpreted generally giving words their ordinary meaning. The intention of the testator in these types of cases are, oddly enough, often not considered by the Court. Case law has determined the meaning of certain words for example, "children", "effects", "issue" etc. by the estate. The legal costs of the applications to interpret a Will, unless frivolously brought, will be paid V. CONSTRUCTIVE TRUSTS/UNJUST ENRICHMENT There is another type of action that is often described as "contesting" a Will or resulting in a claim against an estate when the deceased failed to provide for an individual in his Will. This type of action usually involves the disappointed individual relying, to their detriment, on the deceased's assurances they would receive a benefit under the Will. A common situation is where a common-law spouse has contributed to the purchase of a property that was registered in the deceased's name alone or have worked in the deceased's business for little or no compensation. If the contribution was for the purchase or renovation of a specific asset (a house, for example), the individual may be able to successfully apply to obtain an interest in that asset and this type of action is referred to as a "constructive trust claim". If it was more of a general contribution to the overall maintenance of the home and expenses, for example, the deceased's estate may have been "unjustly enriched" by those contributions and the contributor may be entitled to a sum of money to compensate them. The compensation can either be on a fair market value basis for the services performed (quantum meruit) which is usually calculated on an hourly rate basis or on a lump sum award made by the judge which may be a percentage of the estate. The remedy available will depend on the circumstances.

5 - 5 - There are other circumstances where an estate may be involved in a law suit. Sometimes couples execute mutual wills and do so on contractual basis that the survivor will not alter their Will and if they do, the survivor's estate may be sued alleging that the estate is held in trust for the beneficiaries under the prior mutual will. A breach of contract claim can also be commenced against a deceased's estate where the deceased breached a contract (often an oral contract) by failing to execute a Will leaving a bequest or certain asset to an individual. The disappointed individual often has agreed to perform (and by death has performed) services in exchange for the bequest. SUMMARY Should you find yourself in a situation involving any of the above scenarios, please obtain legal advice from a lawyer in your province or country immediately - the time limitations to commence these types of actions vary from province to province and from country to country.