The recently released Court of Queen’s Bench of Alberta decision From Estate, 2019 ABQB 988, underlines the importance of a will-maker expressing adequate knowledge over the contents of their assets and making sure that the motives for distribution are not influenced by delusion. If a will-maker’s knowledge is considered limited, the Will may not be valid, as was the case in the From Estate decision.
From the age of 12, Randy From worked with his father, Lorne From, at the family business. Lorne always intended for Randy to one day take over the business, so in 2000 he gifted 40% of the ownership to Randy. In 2001, Lorne made a Will by which he gave Randy the remaining ownership interest in the business and then divided the rest of his estate equally between Randy and his daughter Carla.
In the subsequent years, Randy began playing a more important role in the business, and in 2007 he purchased the entirety of the business from his father. Around that time, Lorne suffered from several serious medical conditions, including multiple strokes which left him with memory limitations. Lorne’s relationship with Randy began to deteriorate when Lorne became increasingly hostile towards his son, claiming erroneously that he had run out of money and that Randy had unfairly purchased the company from him for less than its fair market value.
In 2015, Lorne went to a lawyer to update his Will. He advised the lawyer that he had memory issues but was otherwise assessed to be adequately competent. He strongly believed that Randy had received an unfair deal when purchasing the remainder of the business, despite not being able to provide any documentation to prove this contention. Because of this belief, Lorne decided to disinherit Randy from his estate.
In deciding if Randy’s challenge of the validity of the 2015 Will should succeed, Justice Goss found that Lorne did not have the sufficient testamentary capacity to make the 2015 Will. He did not have a clear understanding and memory of the extent of this property, and could not remember clearly the sale of his business or the amounts paid. Justice Goss found that the decision to disinherit Randy was based on delusions about Randy and the sale of the family business, and therefore the 2015 Will was invalid.
This decision serves as an important reminder of the diligence required by estate practitioners when assessing a will-maker’s mental capacity while drafting a Will and engaging in estate planning. If the will-maker bases testamentary decisions on delusions about their assets or their beneficiaries, the Courts may find the Will to be invalid due to a lack of testamentary capacity.
Written by Isabel Romeral and Cameron Smith