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Estate Litigation

An Estate Litigation Overview For Non-Lawyers in British Columbia

The Wills, Estates, and Succession Act is the legislative framework in British Columbia outlining the creation and validity of wills, the distribution of estates in the absence of a will, claims for wills variation, and the probate and administration of estates.

Following a death in British Columbia, the decedent’s estate is divided up and passed on to beneficiaries who are named in the will or trust or automatically regarded as beneficiaries by the WESA. In some cases, the individual in question will have left a will, ensuring they have a plan in place for their estate assets and how the assets are distributed to surviving family members, friends, and other interested parties such as financial institutions.

What is Estate Litigation?

The following are common areas of estate litigation, whereby beneficiaries of estates and other interested parties can enter into a process of estate settlement or probate to resolve areas of estate disputes.

Estate Plans and Areas of Potential Dispute

In many cases, BC’s Wills, Estates, and Succession Act (WESA) dictates who an estate’s beneficiaries are and how an estate is to be distributed. It can be also valuable for some to hold specific assets, like land, homes, or investment accounts jointly with other owners, called joint tenancy. These other owners may still be owed a portion of the estate, even if they are left out of the will.

For some, estate planning may only involve the simple execution of a will or making substantial lifetime gifts to loved ones. If these individuals refrain from detailed estate planning during their lifetime, their families can be exposed to estate disputes in the future. Still, well-structured estate plans don’t always protect against estate litigation.

When no estate plan is in place, a probate court will often deal with estates and assets according to province law. Known as intestate succession, BC’s WESA typically dictates the order beneficiaries are considered when distributing assets to a family member, prioritizing the spouse, then children, then parents, and finally siblings. However, after their appointment, the estate administrator can generate an estate plan to distribute assets within the guidelines of the WESA. Estates with significant value requiring complex asset distribution and the satisfaction of debts owed to third parties will require probate.

To navigate these complexities, some seek assistance from accountants and estate lawyers to create estate plans that not only mitigate potential tax implications but minimize the likelihood of disagreements among successors and other beneficiaries.

Estate Litigation and Joint Tenancy

The principle of joint tenancy mandates that when one joint tenant passes away, their interest in the property automatically transfers to the surviving joint tenant(s). In cases where a spouse or child of a deceased person feels unfairly treated due to a will or property passing outside due to joint tenancy laws, Canadian and British Columbian laws offer several grounds to challenge a will or property transfer before death.

Will Validity

Estate disputes can emerge when the will’s validity is in question, the executor has acted improperly, or a beneficiary has experienced an unfair disinheritance. Any component of an estate plan, including wills or trusts, can face challenges. It’s also possible to contest a pre-internment gift or asset transfer, especially if there are concerns regarding the validity of the will due to illicit or unethical behaviour such as undue influence. Claims can encompass assets within or outside a will.

Regarding will variation claims, WESA outlines the rights of beneficiaries in BC. Surviving spouses and children of the deceased possess the right to contest the distribution in the will if they’ve been unfairly disinherited or lack proper maintenance. The WESA empowers the BC Supreme Court to modify a will to ensure fair estate asset distribution, particularly in cases where a spouse or child hasn’t received adequate provision.

Challenges to Wills

Challenges to wills often hinge on technicalities, particularly when the will’s format doesn’t adhere to the formal regulations that define a valid will. These requirements include proper signing and witnessing.

Recent changes brought on by the BC WESA enable documents not meeting the conventional prerequisites of a will to be deemed valid, provided that the court believes they express the deceased person’s true testamentary intent.

Will Variances

The WESA established clear succession guidelines for will variation when applicable. If an otherwise valid will should be varied or changed because it fails to meet the needs of, or provide the proper support for, the will maker’s spouse or children, the WESA sets clear guidelines. The court’s standard for whether a will treats a spouse or child unfairly is based on what it considers the will maker’s “moral obligations.” However, only spouses or children can ask the court to vary a will. Generally, spouses and minor children have a legal right to be supported by their spouse/parent. If the will fails to make any, or makes inadequate, provisions for these individuals, the court may issue a variance.

Will makers may be obligated by law to provide for their children, including adopted children, but they are permitted to divide assets between those children differently. If children whose share of a will’s assets is intentionally reduced and the court deems that this choice was made for sound reasons, the will may not be varied.

Before deciding to grant a will variance, the court will consider a number of factors. The size of the estate, what assets if any were transferred by the will-maker when he or she was still alive, and the relative financial positions of the successors, can all impact the decisions to grant a variance or not.

Estates and Trusts

In some cases, a will maker’s assets are transferred before their passing to a spouse or sibling. Canadian common law dictates that when a parent transfers property to an adult child, there’s an assumption the property is being held in trust. This includes joint tenancy properties. If the transferring family member passes while the asset in question is held in trust, the recipient child must demonstrate the property was a gift. Heirs may pursue litigation when other family members would have been a beneficiary of said asset as a component of the estate.

Common Types of Disputed Estates

Estate litigation covers a spectrum of legal disputes encompassing trusts, wills, and estates. Some of the cases we handle involve various issues, including:

Inheritances under the Wills, Estates, and Succession Act: The act establishes the time limits that people have to dispute a will and dictates the process by which people can ask the court to invalidate or modify a will. It is also used to resolve disputes related to a will’s improper execution, a lack of testamentary capacity of the will maker, or cases of undue influence.

Incapacity: In the context of wills, incapacity refers to the legal inability of an individual to make decisions or understand the consequences of their choices regarding their estate, particularly in relation to the formation of a will. Testamentary capacity, also known as sound mind or mental capacity, is a crucial requirement for a will to be considered valid. In BC, Guardianships and Committees of the estate are appointed by probate courts in limited cases when the would-be will maker is mentally unable to make decisions pertaining to their estate.

Claims against executors and trustees: In cases of alleged executor or trustee impropriety during the course of estate or trust proceedings, beneficiaries can move to remove and replace individuals as executors of an estate under select circumstances. Beneficiaries must demonstrate to the courts that the current executor violated their fundamental legal and fiduciary obligations to an estate’s beneficiaries under the WESA, common law, and the provisions contained within a will or trust, when applicable.