Sunday, September 04, 2005

Wills Variation Act: An Introduction

The Wills Variation Act, RSBC 1996, c. 490, is one of the most controversial statutes in British Columbia, giving the courts discretion to drastically change the provisions of a Will, without providing clear criteria or guidance for doing so. The heart of the Wills Variation Act is section 2 which says:

“…if a testator dies leaving a will that does not, in the court's opinion, make adequate provision for the proper maintenance and support of the testator's spouse or children, the court may, in its discretion, in an action by or on behalf of the spouse or children, order that the provision that it thinks adequate, just and equitable in the circumstances be made out of the testator's estate for the spouse or children.”

Although every common law province in Canada has dependent’s relief legislation permitting the courts to vary a Will where the maker of the Will (the “testator”) has not provided adequately for his or her dependants, British Columbia law is unique. The Wills Variation Act is both broader and narrower in its application than legislation in other provinces.

The Wills Variation Act, in contrast to legislation in most other provinces, allows independent adult children who were not dependant on the testator when he or she died to make a claim. On the other hand, some dependants, such as dependant stepchildren, cannot apply to vary a Will under the Act.

If the court determines that adequate provision has not been made, the court may make a considerable redistribution of the estate assets in favor of the applicant, and is not limited to providing sufficient assets to the applicant to alleviate finance need. On the other hand, the Wills Variation Act does not have any direct application to assets that flow to beneficiaries outside of an estate, such as designated beneficiaries of life insurance policies or Registered Retirement Saving Plans. Nor does the Wills Variation Act contain any anti avoidance provisions to prevent the testator from arranging his affairs so that substantially all of his or her assets flow to beneficiaries outside of his estate, thereby attempting to defeat any claims by a spouse or child under the Act.

The court cases interpreting and applying the Wills Variation Act are fascinating, as our courts, including the Supreme Court of Canada, have attempted to balance the policies of the Wills Variation Act, with the principle that a person ought to be permitted to decide who gets his or her assets at death.

I will be posting a series of articles examining various aspects of the Wills Variation Act, and I will discuss some ideas for reform. I think that the provincial legislature needs to reexamine the Act to alleviate some fundamental problems with the Act.

[Since I wrote this post, I have posted the following other articles on the Wills Variation Act:
"The Wills Variation Act: Who May Apply?" here;
"The Wills Variation Act: What is Adequate, Just and Equitable? here;
"Wills Variation Act: A Summary of the Principles" here;
"Time Limits for Bringing a Wills Variation Act Claim" here.]

2 comments:

RkBall said...

Thank you for this -- it's timely right now.

Anonymous said...

wow, shocking but very interesting thanks for the supplemental articles