Blended Families and Estate Planning – Part 2

Part 2 – Will Variation Claims

In our last post we discussed some of the estate planning complications faced by people living in spousal relationships where one or both partners have children from another relationship, often referred to as blended families. In that post, we focused on things to consider when an individual is thinking about leaving everything to their surviving spouse, despite having children from another relationship.

In this post, we will focus on the related topic of will variation claims, a matter that should be of serious concern for anyone living in a blended family.

The Wills Estates and Succession Act allows a deceased person’s spouse (or spouses – another topic we will return to in a future post) and children (including independent adult children and children from another relationship) to ask the court to effectively change or “vary” the terms of a deceased person’s will in their favour. These claims are known as “will variation claims”.

When such requests (or as is often the case, several competing requests) are brought before the court, the court must assess whether a variation to the will would be appropriate in the circumstances. To make this determination, the court attempts to balance the public interest of ensuring that the will-maker has made “adequate, just and equitable provision” for spouses and children, against the right of the will-maker to decide what happens to their property upon their death (known as “testamentary autonomy” or “testamentary freedom”). In coming to its decision, the court considers whether the will-maker has met both their legal obligations and their moral obligations to the will-maker’s spouse(s) and child(ren).

In most cases there is no legal duty to provide for one’s independent adult children upon one’s death, but there is often a moral duty to do so. There is frequently both a legal and moral obligation to provide for one’s spouse(s). If one dies having both a spouse and children (in particular children from a previous relationship), competing legal and moral duties are at play. In such circumstances, when the court is faced with a will variation claim, it must determine the scope of these competing duties and balance them against each other. To do so, the court considers a number of factors.

In Unger v Unger Estate, 2017 BCSC 1946, The Honourable Madam Justice Forth helpfully explained,

“The principles that apply to the legal and moral duties respecting spouses and children were summarized in the case of Wong v. Soo, 2015 BCSC 1741 at para. 70:

1. The WVA addresses two main interests − the “adequate, just and equitable provision for spouses and children of testators” and testamentary autonomy.
2. There are legal obligations and moral obligations and both must be considered. Together they provide a guide as to what is adequate, just and equitable in the circumstances.
3. Testamentary autonomy must yield to what is adequate, just and equitable.
4. Legal obligations are the obligations which are the obligations which the law would impose on a person during his or her life if the question of provision for the claimant arose. These may be found in the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) or other family legislation. Where the parties are not separated or divorced at the time of death, the law will still impose uncrystallized legal obligations that a testator owes to his or her spouse.
5. Moral obligations to a spouse includes the notion that, although the law may not require a supporting spouse to make provision for a dependent spouse after death, a strong moral obligation to do so exists if the size of the estate permits.
6. The moral obligation is broader than the legal obligation and is assessed at the time of death.

In J.R. v. J.D.M., 2016 BCSC 2265, the Court set out factors considered in assessing the moral claim in a second marriage at para. 92:

In assessing the strength of the legal and moral obligations owed by a testator to a second spouse, the court will consider factors such as:

• the length of the marriage;
• when and how the testator’s assets were acquired;
• the contribution of the second spouse;
• how family assets would be divided under the applicable family legislation upon marriage breakdown;
• competing obligations with the children from the first marriage;
• financial circumstances of the spouse;
• the size of the estate; and
• the magnitude of assets passing to the spouse outside of the estate in consequence of other pre-death transactions undertaken by the testator."

In Dunsdon v. Dunsdon, 2012 BCSC 1274, The Honourable Madam Justice Balance provided the following guidance regarding the assessment of a will-maker’s moral duty to independent adult children,

“the following considerations have been accepted as informing the existence and strength of a testator’s moral duty to independent children:

• relationship between the testator and claimant, including abandonment, neglect and estrangement by one or the other;
• size of the estate;
• contributions by the claimant;
• reasonably held expectations of the claimant;
• standard of living of the testator and claimant;
• gifts and benefits made by the testator outside the will;
• testator’s reasons for disinheriting;
• financial need and other personal circumstances, including disability, of the claimant;
• misconduct or poor character of the claimant;
• competing claimants and other beneficiaries.

…

These considerations tend to overlap and are not approached in isolation as independent, air-tight categories … there is no single way for testators to divide the estate in order to discharge their legal and/or moral duties.  It emphasized that it is only where a testator has chosen an option that falls below his or her obligation as defined by reference to the contemporary notion of legal and moral norms, that a court will vary a will so as to achieve “the justice the testator failed to achieve”.”

To paraphrase a further statement made by Madam Justice Balance in Dunsdon v. Dunsdon:  the essential question in assessing a will variation claim is whether a will-maker’s testamentary dispositions are in accordance with society’s reasonable expectations of what a judicious parent or spouse would do in the circumstances.  That assessment is based on the circumstances in existence at the will-maker’s death and those reasonably foreseeable to the will-maker, though a substantial change in the circumstances of a claimant or beneficiary that occurs between the date of death and the date of trial may also be relevant.

For individuals living in spousal relationships with children from a different relationship, the risk of will variation claims is of particular concern. Providing for both one’s spouse and one’s children from another relationship effectively requires careful planning. Given the nuanced considerations that go into the court’s determination regarding whether or not to vary a will, the outcome of will variation claims can be difficult to predict. Additionally, the costs associated with litigating such claims can reach above $100,000 relatively quickly. Reducing the risk posed by potential will variation claims as much as possible is usually one of the principal considerations for folks in blended families.

For someone living in a blended family, using one’s will as the primary method of determining where one’s assets will go upon one’s death can be a very dangerous approach. Both spouses and children have standing to ask the court to change the will in their favour! Because of this (and other important considerations like the ones set out in our previous post) the possibility of using alternative techniques for specifying where one’s assets will go upon one’s death (like the ones listed here) should be given serious thought by individuals in blended families.

In our previous post we promised to follow up with future posts providing information about some techniques that can be used to address some of these considerations. In our upcoming posts, we will begin making good on that promise, beginning with a brief overview of how the use of joint ownership of assets and beneficiary designations on assets like RRSPs, TFSAs, life insurance, pensions, and some investment products can be useful elements of an estate plan, particularly for individuals faced with the risk of a will variation claim.

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Family photo by Rajiv Perera on Unsplash