Making and Executing a Will (16:III): Difference between revisions

The will-maker must have the requisite testamentary capacity. No person of unsound mind, who lacks testamentary capacity, is capable of making a valid will. Testamentary capacity is defined through the common law, not statute. The basic test is found in ''Banks v Goodfellow'', (1870) LR 5 B 549 (QB) at para 569 [''Goodfellow'']; for a recent application of this test, see ''[https://www.canlii.org/en/bc/bcsc/doc/2022/2022bcsc402/2022bcsc402.html Nassim v Healey]'', 2022 BCSC 402 at para 41 [''Nassim''].

According to the ''Goodfellow'' case and subsequent decisions, to have testamentary capacity a will-maker must:

In ''Nassim'', the courts also outline a more “modern” form of the ''Goodfellow'' test that was quoted in ''[https://www.canlii.org/en/bc/bcsc/doc/2013/2013bcsc305/2013bcsc305.html Laszlo v Lawton]'', 2013 BCSC 305 at para 188 ''[Laszlo],'' "The testator must be sufficiently clear in his understandings and memory to know, on his own, and in a general way (1) the nature and extent of his property, (2) the persons who are the natural object of his bounty and (3) the testamentary provisions he is making; and he must moreover, be capable of (4) appreciating these factors in relation to each other, and (5) forming an orderly desire as to the disposition of his property…"

The law presumes that a will-maker has the requisite capacity if a will was duly executed in accordance with the formal statutory requirements after being read over to a will-maker who appeared to understand it.

Nevertheless, a student or lawyer should always assess the will-maker’s capacity when taking instructions from the will-maker. This decision should be based on the will-maker’s instructions, not any assertion from the will-maker that they are capable. To this end, avoid asking the will-maker direct questions about capacity, such as “are you capable?”

The rules regarding the burden of proof in relation to testamentary capacity were set out by the Supreme Court of Canada in ''[https://www.canlii.org/en/ca/scc/doc/1995/1995canlii105/1995canlii105.html Vout v Hay]'' [1995] 2 SCR. 876, 125 DLR (4th) 431 [''Vout'']. Essentially, if a will is duly executed in accordance with the formal statutory requirements after being read by a testator who appears to understand the will, it is presumed that the testator possessed the requisite capacity and knew and approved the contents of the will. This presumption may be rebutted where “suspicious circumstances” or undue influence exist (see below).

A will or a portion of it that is made as a result of undue influence is not valid. Undue influence is not mere persuasion but is physical or psychological '''coercion'''. There must be capacity to influence and the influence must have produced a will that does not represent the will-maker’s intent. Section 52 of WESA now provides that, if it is shown that the will-maker was in a position where the potential for domination or dependence was present, the burden shifts to the party seeking to defend the will to show that the will was not procured through undue influence. A spouse, parent, or child, etc. may put their claims before the will-maker for recognition. This does not constitute undue influence unless it amounts to coercion. If the will-maker continues to be capable of making decisions freely, the advice or persuasion does not amount to undue influence. See ''[https://www.canlii.org/en/bc/bcsc/doc/2013/2013bcsc976/2013bcsc976.html?autocompleteStr=Leung%20v%20Chang%2C%202013%20BCSC%20976%20&autocompletePos=1 Leung v Chang]'', 2013 BCSC 976 for a framework for the burden of proof in litigation regarding contested wills.  

To challenge a will on the grounds of undue influence, the asserting party must show that the will does not represent the will-maker’s true intentions due to the coercion. If this can be shown, undue influence is presumed. The party that wishes to defend the will may rebut this presumption by showing that the will was a result of the testator’s own “full, free and informed thought”. See ''[https://www.canlii.org/en/bc/bcsc/doc/2010/2010bcsc64/2010bcsc64.html?autocompleteStr=Stewart%20v%20Mclean%2C%202010%20BCSC%2064&autocompletePos=1 Stewart v Mclean]'', 2010 BCSC 64 at para 96. Factors that can assist with rebutting the presumption includes proof that:  

Notwithstanding section 52 of ''WESA'', an individual challenging a will on the basis of undue influence should have sufficient evidence to establish actual undue influence – in challenging the validity of a will, it may be insufficient to simply point to a relationship where there was a potential for the testator’s domination or dependence, without more. An allegation of undue influence is a serious allegation which should not be made lightly. See ''[https://www.canlii.org/en/bc/bcsc/doc/2018/2018bcsc1032/2018bcsc1032.html?autocompleteStr=Ali%20v%20Walter%20Estate%2C%202018%20BCSC%201032&autocompletePos=1 Ali v Walter Estate]'', 2018 BCSC 1032; ''[https://www.canlii.org/en/ca/scc/doc/1991/1991canlii69/1991canlii69.html?autocompleteStr=Geffen%20v%20Goodman%20Estate%2C%20%5B1991%5D%202%20SCR%20353&autocompletePos=1 Geffen v Goodman Estate]'', [1991] 2 SCR 353, 81 DLR (4th) 211; ''[https://www.canlii.org/en/ca/scc/doc/2017/2017scc61/2017scc61.html Cowper-Smith v Morgan]'', 2017 SCC 61.

Allegations of undue influence should not be readily brought. A failed allegation of undue influence may attract severe monetary consequences against the accuser. When one alleges undue influence, they are accusing another of being a fraudster. A failed allegation of fraud more readily justifies an award of special costs against the accuser. Therefore, a party who fails to prove a case of undue influence runs the risk of having to pay the full legal costs of the defending party. As such, undue influence should be carefully considered and investigated before commencing a court action. See ''[https://www.canlii.org/en/bc/bcsc/doc/2011/2011bcsc923/2011bcsc923.html?autocompleteStr=Mawdsley%20v%20Meshen%2C%202011%20BCSC%20923&autocompletePos=1 Mawdsley v Meshen]'', 2011 BCSC 923.  

Suspicious circumstances may arise where a person who prepares a will also takes a benefit under it, though this is not exhaustive of all circumstances that raise a suspicion. The suspicion is that the will-maker did not know or approve of the contents of the will, and this suspicion must be removed before probate will be granted (see ''[https://www.canlii.org/en/ca/scc/doc/1934/1934canlii13/1934canlii13.html?autocompleteStr=Riach%20v%20Ferris%2C%20%5B1934%5D%20SCR%20725&autocompletePos=1 Riach v Ferris]'', [1934] SCR 725, [1935] 1 DLR 118; see also more recent applications in ''[https://www.canlii.org/en/bc/bcca/doc/1989/1989canlii2923/1989canlii2923.html?autocompleteStr=Clark%20v%20Nash%2C%20(1989&autocompletePos=1 Clark v Nash]'', (1989) 61 DLR (4th) 409 (BCCA), 34 ETR 174 and ''[https://www.canlii.org/en/bc/bcsc/doc/1997/1997canlii2935/1997canlii2935.html?autocompleteStr=Johnson%20v%20Pelkey%2C%20(1997)%2036%20BCLR&autocompletePos=1 Johnson v Pelkey]'', (1997) 36 BCLR (3d) 40 (SC), 17 ETR (2d) 242.  

Suspicious circumstances surrounding the making of a will is not a stand-alone ground to challenge the validity of a will; however, if a challenger of a will can demonstrate that suspicious circumstances existed when the will was drafted, this may shift the burden to the propounders of the will to prove that the testator had knowledge and approved of the contents of the will when it was made. In ''[https://www.canlii.org/en/ca/scc/doc/1995/1995canlii105/1995canlii105.html?autocompleteStr=Vout%20v%20Hay%2C%20%5B1995%5D%202%20SCR%20876&autocompletePos=1 Vout v Hay]'', [1995] 2 SCR 876 at para 25 [''Vout''], the Court held that suspicious circumstance may be raised by:  

:b) circumstances tending to call into question the capacity of the testator, or  

The Court in ''Vout'' held that where the party seeking to overturn the will can point to some evidence, that if believed would prove suspicious circumstances, the burden of proof shifts to the propounder of the will to prove on a balance of probabilities that the will-maker knew and approved of the will’s contents and had the necessary testamentary capacity. This problem is best avoided by ensuring the will is prepared by the will-maker or some independent party (e.g., a student or lawyer) and not by a beneficiary, or the spouse of a beneficiary, under the will.

The will-maker should appoint a person that is willing to act, familiar with the estate, young enough to outlive them, and preferably living in BC. An alternative Executor should also be appointed in case the first Executor is unavailable. The Executor, if they accept the position, must carry out the duties of Executor. The Executor may renounce, under section 104 of ''WESA'', if they have not already intermeddled with the estate. In this scenario, the administration of the estate passes as if they have never been appointed Executor.

An Administrator is appointed by the court to administer the estate of a person who dies intestate (without a valid will). Section 130 of ''WESA'' provides the order of priority among applicants for the administration of an intestate estate. An Administrator cannot act until the court issues a Grant of Administration. A “Grant of Administration with Will Annexed” may be granted where there is a will, but the Executor named in the will cannot or will not act (e.g. due to refusal to act, incapacity, or death of the Executor). The order of priority for administration with will annexed is provided in section 131 of ''WESA''. The Administrator’s legal capacity to act starts from the date of the issuance of the Grant of Administration.

A personal representative is a fiduciary at law and must act to the benefit of the estate and the beneficiaries. They cannot purchase from the estate unless they are given specific power to purchase in a will. They are accountable to the estate for any profit made while acting as Executor or Administrator. If the personal representative makes mistakes and causes loss to the estate, that person could be held personally liable and could be required to replace the loss unless the court finds that they acted honestly and reasonably.

A personal representative may be entitled to remuneration under a remuneration contract or pursuant to an express authority under the will. Otherwise, they are entitled to fair and reasonable remuneration, not to exceed 5 percent of the gross aggregate value of the estate under section 88 of the ''Trustee Act'', RSBC 1996, c 464, and an annual care and management fee not exceeding 0.4 percent of the average market value of the assets. A personal representative may be a beneficiary under the will, though it is a rebuttable presumption that any benefit other than a residuary bequest under the will is in lieu of compensation. See ''Canada Permanent Trust Co v Guinn'', (1981) 32 BCLR 288 (SC).  

'''If the client requires a trust company to be appointed as the Executor, the client should be referred to a private lawyer.'''

Section 37(1) of ''WESA'' requires that a will be in writing. The will-maker and two or more witnesses in the presence of the will-maker must sign the will. It may be typed or handwritten, or both, as in the case of printed will forms. Subsection 3 sets out that a will is deemed to be in writing if the will is in electronic from.

A fundamental rule of drafting is to ascertain the '''will-maker’s intent''' regarding how the estate will be divided. Have the will-maker consider present desires as well as future possibilities. A beneficiary may predecease the will-maker and the will-maker may want the deceased’s share to go to someone else. Potential will variation claims must be anticipated. '''A qualified lawyer should be consulted if a wills variation claim may occur.''' See '''Section VI: Wills Variation Claims''', to determine when this issue might arise.