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Making and Executing a Will (16:III) (view source)
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==== a) Generally ==== | ==== a) Generally ==== | ||
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 p. 569; for a recent application of this test, see Serbina v Frejd, (2016) BCSC 33 (CanLII), para 81. | 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 p. 569; for a recent application of this test, see ''Serbina v Frejd'', (2016) BCSC 33 (CanLII), para 81. | ||
According to the Goodfellow test, to have testamentary capacity a will-maker must understand: | According to the Goodfellow test, to have testamentary capacity a will-maker must understand: | ||
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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 testator who appeared to understand it. | 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 testator who appeared to understand it. | ||
However, a student or lawyer taking instructions from the will-maker should nevertheless always assess the will-maker | However, a student or lawyer taking instructions from the will-maker should nevertheless always assess the will-maker's capacity. 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 will-maker direct questions about capacity, such as “Are you capable?” | ||
Some helpful lines of inquiry to assess capacity include: whether the will-maker can understand the nature of the testamentary act (that he or she is making a will), can recall the property, and can comprehend that he or she is excluding possible claimants under intestacy or through a wills variation claim. Delusions or partial insanity will not destroy testamentary capacity unless they directly affect testamentary capacity or influence the dispositions in the will. | Some helpful lines of inquiry to assess capacity include: whether the will-maker can understand the nature of the testamentary act (that he or she is making a will), can recall the property, and can comprehend that he or she is excluding possible claimants under intestacy or through a wills variation claim. Delusions or partial insanity will not destroy testamentary capacity unless they directly affect testamentary capacity or influence the dispositions in the will. | ||
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==== c) Undue Influence and Suspicious Circumstances ==== | ==== c) Undue Influence and Suspicious Circumstances ==== | ||
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. A spouse, parent, or child, etc. may put his or her claims before the will-maker for recognition. This does not constitute undue influence unless it amounts to coercion. The will drafter should ensure that the will represents the will-maker’s intentions and that he or she is not being coerced into making the will or disposition against his or her wishes. This is especially relevant where the aged or infirm are concerned. (see Wingrove v Wingrove, (1885) 11 PD 81 (PD)); see also for more recent applications in Ashdown v Milburn, (1920) 50 DLR 523 (Sask CA) and Re Marsh Estate, (1991) 104 NSR (2d) 266 (NSCA). | 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. A spouse, parent, or child, etc. may put his or her claims before the will-maker for recognition. This does not constitute undue influence unless it amounts to coercion. The will drafter should ensure that the will represents the will-maker’s intentions and that he or she is not being coerced into making the will or disposition against his or her wishes. This is especially relevant where the aged or infirm are concerned. (see ''Wingrove v Wingrove'', (1885) 11 PD 81 (PD)); see also for more recent applications in ''Ashdown v Milburn'', (1920) 50 DLR 523 (Sask CA) and ''Re Marsh Estate'', (1991) 104 NSR (2d) 266 (NSCA). | ||
==== d) Presumption of Validity ==== | ==== d) Presumption of Validity ==== | ||
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Under the common law, if a will was duly executed in accordance with the formal statutory requirements after being read over to a testator who appeared to understand it, it is presumed that the testator possessed the requisite capacity and knew and approved its contents. | Under the common law, if a will was duly executed in accordance with the formal statutory requirements after being read over to a testator who appeared to understand it, it is presumed that the testator possessed the requisite capacity and knew and approved its contents. | ||
This presumption is rebutted where “suspicious circumstances” exist. 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 Riach v Ferris, [1934] SCR 725; see also more recent applications in Clark v Nash, (1989) 61 DLR (4th) 409 (BCCA) and Johnson v Pelkey, (1997) 36 BCLR (3d) 40 (SC)). | This presumption is rebutted where “suspicious circumstances” exist. 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 ''Riach v Ferris'', [1934] SCR 725; see also more recent applications in ''Clark v Nash'', (1989) 61 DLR (4th) 409 (BCCA) and ''Johnson v Pelkey'', (1997) 36 BCLR (3d) 40 (SC)). | ||
The Supreme Court held in Vout v Hay, [1995] 2 SCR 876, that where suspicious circumstances are proven, the burden of proof shifts to the propounder of the will to prove on 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 under the will or the spouse of a beneficiary. | The Supreme Court held in ''Vout v Hay'', [1995] 2 SCR 876, that where suspicious circumstances are proven, the burden of proof shifts to the propounder of the will to prove on 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 under the will or the spouse of a beneficiary. | ||
The doctrine of “suspicious circumstances” does not apply to undue influence. Under common law, the challenger must always prove undue influence. However, 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. | The doctrine of “suspicious circumstances” does not apply to undue influence. Under common law, the challenger must always prove undue influence. However, 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. | ||
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An Executor is appointed by the will-maker in the will to handle all aspects of the estate after the will-maker’s death. Any person, trust company or financial institution may be an Executor depending on the size of the estate. Although not recommended, a minor may be appointed; however, if he or she has not reached the age of majority on the will-maker’s death, probate may be delayed. | An Executor is appointed by the will-maker in the will to handle all aspects of the estate after the will-maker’s death. Any person, trust company or financial institution may be an Executor depending on the size of the estate. Although not recommended, a minor may be appointed; however, if he or she has not reached the age of majority on the will-maker’s death, probate may be delayed. | ||
The will-maker should appoint a person that is willing to act, familiar with the estate, young enough to outlive him or her, and preferably living in | The will-maker should appoint a person that is willing to act, familiar with the estate, young enough to outlive him or her, and preferably living in BC. An alternative Executor should also be appointed in case the first Executor is unavailable. The Executor, if he or she accepts the position, must carry out the duties of Executor. The Executor may renounce under s 104 of WESA, if he or she has not already intermeddled with the estate. In this scenario, the administration of the estate passes as if he or she had never been appointed Executor. | ||
=== 3. Administrator === | === 3. Administrator === | ||
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=== 5. Remuneration and Benefits === | === 5. Remuneration and Benefits === | ||
A personal representative may be entitled to remuneration under a remuneration contract or pursuant to an express authority under the will. Otherwise, he or she is entitled to a fair and reasonable remuneration, not to exceed 5 percent of the gross aggregate value of the estate under s 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). | A personal representative may be entitled to remuneration under a remuneration contract or pursuant to an express authority under the will. Otherwise, he or she is entitled to a fair and reasonable remuneration, not to exceed 5 percent of the gross aggregate value of the estate under s 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). | ||
A trust company can be appointed Executor but usually will not consent unless the assets are substantial. | A trust company can be appointed Executor but usually will not consent unless the assets are substantial. | ||
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Do not use words and phrases that are open to more than one interpretation. Be clear in describing property and time periods. Remember that certain terms used to describe property or relationships have precise legal meanings. Do not use them casually. Be careful describing property and beneficiaries. For example, the clause “I give the assets in my bank account to John” is poorly drafted. It may mean a savings account, checking account, or both. John may be a son, nephew or lover. | Do not use words and phrases that are open to more than one interpretation. Be clear in describing property and time periods. Remember that certain terms used to describe property or relationships have precise legal meanings. Do not use them casually. Be careful describing property and beneficiaries. For example, the clause “I give the assets in my bank account to John” is poorly drafted. It may mean a savings account, checking account, or both. John may be a son, nephew or lover. | ||
If the will is contested, the estate may be ordered to pay the legal fees and the beneficiaries will receive a reduced amount. However, where Executors are also beneficiaries and have a personal interest in the outcome of the litigation, courts may be reluctant to order costs be paid out of the estate: see Re Lapka Estate, (2005) 15 ETR (3d) 234 (BCSC) and Re Wilcox Estate, (2005) 13 ETR (3d) 120 (BCSC). | If the will is contested, the estate may be ordered to pay the legal fees and the beneficiaries will receive a reduced amount. However, where Executors are also beneficiaries and have a personal interest in the outcome of the litigation, courts may be reluctant to order costs be paid out of the estate: see ''Re Lapka Estate'', (2005) 15 ETR (3d) 234 (BCSC) and ''Re Wilcox Estate'', (2005) 13 ETR (3d) 120 (BCSC). | ||
* NOTE: The clauses given below are merely examples. You should ensure that the clauses you use are appropriate and that the will is internally consistent. For example, if specific bequests are given to various persons, another clause in the will should not dispose of the entire estate, but may dispose of the residue. Consult a qualified lawyer, the CLEBC Wills and Personal Planning Precedents resource or any other books on will precedents for additional assistance with the structure of various clauses. | * NOTE: The clauses given below are merely examples. You should ensure that the clauses you use are appropriate and that the will is internally consistent. For example, if specific bequests are given to various persons, another clause in the will should not dispose of the entire estate, but may dispose of the residue. Consult a qualified lawyer, the CLEBC ''Wills and Personal Planning Precedents'' resource or any other books on will precedents for additional assistance with the structure of various clauses. | ||
=== 2. Actual Drafting === | === 2. Actual Drafting === | ||
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==== c) Appointing a Guardian ==== | ==== c) Appointing a Guardian ==== | ||
A will-maker may wish to appoint a guardian for his or her children during their age of minority (see Family Law Act, SBC 2011, c 25 s 53 (1) (a)) Financial assistance should be provided to the guardian to cover the costs of raising the children. This arrangement is made with the Trustee. The guardian must be prepared to accept the position and should be consulted beforehand. | A will-maker may wish to appoint a guardian for his or her children during their age of minority (see ''Family Law Act'', SBC 2011, c 25 s 53 (1) (a)) Financial assistance should be provided to the guardian to cover the costs of raising the children. This arrangement is made with the Trustee. The guardian must be prepared to accept the position and should be consulted beforehand. | ||
A testator cannot grant a greater level of guardianship than he or she possesses. Also note that under section 176 of the Family Law Act, a child’s guardian does not automatically become a trustee of the child’s property. If there is any uncertainty regarding what type of guardianship the client has, or whether the client even has guardianship, the client should be referred to a family lawyer, as LSLAP cannot deal with questions of family law. | A testator cannot grant a greater level of guardianship than he or she possesses. Also note that under section 176 of the ''Family Law Act'', a child’s guardian does not automatically become a trustee of the child’s property. If there is any uncertainty regarding what type of guardianship the client has, or whether the client even has guardianship, the client should be referred to a family lawyer, as LSLAP cannot deal with questions of family law. | ||
Those appointing a guardian should be aware that the court could review such a decision. As well, members of the family can apply to have a decision in the will set aside. However, it must be strictly proven that the guardian appointed by the will-maker is unsuitable for the position. | Those appointing a guardian should be aware that the court could review such a decision. As well, members of the family can apply to have a decision in the will set aside. However, it must be strictly proven that the guardian appointed by the will-maker is unsuitable for the position. | ||
* SAMPLE: “I appoint [guardian name] to be the guardian of my minor children. It is my hope that, in accordance with the provisions of the Family Law Act of British Columbia, [guardian name] will appoint a guardian in [his/her] will, or otherwise, to be the guardian of my minor children.” (2016 CLE Wills and Personal Planning Precedents, 4-2) | * SAMPLE: “I appoint [guardian name] to be the guardian of my minor children. It is my hope that, in accordance with the provisions of the ''Family Law Act'' of British Columbia, [guardian name] will appoint a guardian in [his/her] will, or otherwise, to be the guardian of my minor children.” (2016 CLE Wills and Personal Planning Precedents, 4-2) | ||
For more information, see Chapter 5: Children and the Law and Chapter 3: Family Law. | For more information, see Chapter 5: Children and the Law and Chapter 3: Family Law. | ||
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==== b) Gifts to Children ==== | ==== b) Gifts to Children ==== | ||
As a general rule, anyone named in a will can inherit under that will. However, minors cannot sign a valid receipt for their share in an estate. In practical terms, this means that minors must wait until they reach the age of majority to inherit under a will. The parent, guardian, or other trustee for the benefit of the child would hold title to any real property until the child reaches age 19. When property is held by a trustee in trust for a child under the age of 19, the trustee is deemed to have the power to encroach and may, at his or her discretion, apply all or part of the income to which the child may be entitled towards the maintenance and/or education of the child (Trustee Act, RSBC 1996, c 464, s 24). | As a general rule, anyone named in a will can inherit under that will. However, minors cannot sign a valid receipt for their share in an estate. In practical terms, this means that minors must wait until they reach the age of majority to inherit under a will. The parent, guardian, or other trustee for the benefit of the child would hold title to any real property until the child reaches age 19. When property is held by a trustee in trust for a child under the age of 19, the trustee is deemed to have the power to encroach and may, at his or her discretion, apply all or part of the income to which the child may be entitled towards the maintenance and/or education of the child (''Trustee Act'', RSBC 1996, c 464, s 24). | ||
The clause creating the trust should: | The clause creating the trust should: | ||
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=== 1. Presumption of Proper Execution === | === 1. Presumption of Proper Execution === | ||
Inclusion of a signed attestation clause will raise a presumption that the will is properly executed (Re Gardner, [1935] OR 71 (Ont CA)). An attestation clause is a clause at the end of the will where the will-maker signs his or her name testifying to the fact that he or she is signing the approved will. This is also the place where the two witnesses must sign to show that they have witnessed the will-maker approving of the will. | Inclusion of a signed attestation clause will raise a presumption that the will is properly executed (''Re Gardner'', [1935] OR 71 (Ont CA)). An attestation clause is a clause at the end of the will where the will-maker signs his or her name testifying to the fact that he or she is signing the approved will. This is also the place where the two witnesses must sign to show that they have witnessed the will-maker approving of the will. | ||
If special circumstances exist, e.g. the Will-maker is blind or illiterate, a wills form manual should be consulted in order to draft the appropriate attestation clause. | If special circumstances exist, e.g. the Will-maker is blind or illiterate, a wills form manual should be consulted in order to draft the appropriate attestation clause. | ||
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=== 2. Beneficiary's Debt to Estate === | === 2. Beneficiary's Debt to Estate === | ||
According to Re Johnston Estate, 2017 BCSC 272, the rule in Cherry v Boultbee applies in Canada. This means that the beneficiary is required to bring his or her debts towards the estate into account, even if the debt claim would otherwise be statute barred by the limitations act. Re Johnston Estate states that “the purpose of the rule was to prevent a beneficiary who owed money to an estate from receiving more than his or her fair share of the estate.” | According to ''Re Johnston Estate'', 2017 BCSC 272, the rule in ''Cherry v Boultbee'' applies in Canada. This means that the beneficiary is required to bring his or her debts towards the estate into account, even if the debt claim would otherwise be statute barred by the limitations act. Re Johnston Estate states that “the purpose of the rule was to prevent a beneficiary who owed money to an estate from receiving more than his or her fair share of the estate.” | ||
== E. Attesting the Will == | == E. Attesting the Will == | ||