Ensuring Lasting Legacies: Navigating Wills Variations in BC

What is Wills Variation

At its core, “wills variation” in BC provides an avenue for spouses and children of a deceased person who left a Will to contest the distribution of an estate if they believe it is inequitable. Specifically, section 60 of the Wills, Estates and Succession Act (Br

itish Columbia) (the “WESA“) creates a legislative remedy for spouses and children to ask the court to change the distributive provision of a Will in their favor where they feel that the Will fails to make adequate, just, and equitable provision for them.

The WESA is a significant piece of legislation aimed at promoting fair distribution of assets to spouses and children. The inception of the WESA’s predecessor legislation, the Wills Variation Act (British Columbia) was materially

informed by historical favoritism under wills on gender lines. Inequitable wills tended to disproportionately affect women more than their male counterparts, which was recognized by Boughton Law’s Wally Opal who vigorously sought to create a remedy for this by way of leading the charge in creating wills variation rights.

The reasons for disinheritance and unequal treatment in connection with bias have tended to expand and, while they still include gender bias, sexual orientation and religious practices are increasingly common reasons will-makers cite for unequal estate distributions.

There is no consensus on whether the aim of creating recourse for such biases is achieved with this legislation or whether it represents a material infringement on the autonomy of a will-maker, but all people making a Will in BC need to be aware of its impact.

The law imposes both a moral and legal duty on an individual will-maker. The moral obligation has been described by the court as “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards”.  This moral duty can be negated where there is just cause.

The wills variation remedy is open only to spouses and children; it does not extend to step-children who have not been adopted, siblings, or other family members.

Balancing a Will-Maker’s Autonomy and Wills Variation

In the recent case Tom v. Tang, 2023 BCCA 221, the court addressed the pressing question of when a will-maker’s decision to treat children unequally will be upheld.  The court affirmed that a will-maker’s moral duty to an adult child is evaluated using the objective standard of the reasonable will-maker. The reasons for a will-maker’s decisions are highly relevant, and are required to be both true and objectively rational.

In the Tom case, a mother changed her longstanding Will to:

1 – leave her home to two daughters who had become her primary care givers, and

2 – leave the residue of her estate (everything that remains after bills and taxes are serviced) equally amongst all 5 of her children.

The net economic distribution under the Will was that the two daughters would receive almost 85% of the estate’s value.

Mrs. Tom had outlined her reasons for this change in a letter, which were driven by the caregiving functions of the two daughters. None of the children took issue with this classification, and the issue was the scale of the gift in favor of the two daughters.

The BC Court of Appeal agreed that Mrs. Tom’s reasons were rational, but did not agree that the reasons outweighed the moral duty to the other children to the extent that their inheritance should be so dramatically reduced, particularly as all five children had been actively engaged in, and supportive of, Mrs. Tom’s life. Mrs. Tom’s will was varied such that each of the two daughters received 30% of the estate.  The objective analysis was therefore materially informed by both Mrs. Tom’s reasons and the conduct of all the children.

Steps to Take to Limit Exposure to Wills Variation

There are a bounty of estate planning steps that BC individuals can take to limit the exposure to a wills variation claim, ranging from use alter ego and joint partner trusts to beneficiary designations. Where a will is the tool used and there is a wills variation risk, it is extremely helpful to prepare a document setting out, as Mrs. Tom did, the reasons for the distribution being made.

Because the wills variation regime does not extend to step-children, this creates additional wills variation exposure for blended families, as they must balance their legal and moral obligations to their spouse and their children from a prior relationship(s). This becomes increasingly complex the longer the length of the relationship and the more economic interdependence there is.

It’s quite common in such circumstances for the couple to use one or more of:

1. mutual will agreements (agreements where they agree not to change core distributive terms of their wills),
2. spousal trusts (trusts typically created under the will that allow the surviving spouse to use all or part of the assets owned by the first spouse and receive all the income from it and, on the death of the last spouse the will of the first spouse to die still applies to distribute what remains of these assets, typically to his or her children), and
3. family law agreements (such as cohabitation or prenuptial agreements, to set expectations at the outset of the relationship and on an ongoing basis).

In creating any plan, it is important that the will-maker keep in mind that equal division of assets does not necessarily equate to fair treatment. In the Tom case, for example, it would not have been fair to provide equal treatment amongst all five children where two had taken on additional caregiving roles.

What Now?

BC’s wills variation regime provides a safeguards against inequitable distributions of estates where the distribution is irrational and out of line with what a reasonable will-maker would do in the circumstances, offering a recourse for eligible individuals who feel unjustly treated.

By proactively engaging legal professionals, maintaining open communication, and regularly reviewing and updating their wills, individuals can help ensure that their final wishes are honored and that their legacies leave a positive and lasting impact on their loved ones.

If the window for that has closed and the will-maker has passed and seems to be falling short of the legal and moral obligation to a spouse or children, options include mediation and a court application.

In these situations, mediation could be the better option compared to litigation. Overall, mediation can represent a less costly and faster path to resolution, compared to court proceedings. As well, mediation give the parties an opportunity to structure any form of agreement arising out of the mediation—something a Court cannot do. This flexibility can be particularly helpful when dealing with emotionally charged matter like estate disputes.

For more information on proactive estate planning, please contact Rose Shawlee and Catherine Kim.

For questions about estate disputes, please contact Richard DeFilippi, Wally Oppal, K.C., and Lauren Morris.