What is Estate Litigation?
In simple terms an estate is everything a person owns and owes, or their net worth. Assets within an estate may include property, money in the bank, car, personal belongings, rights to income and anything else of worth. The value of the estate reflects the debts and liabilities of that person such as mortgages, loans and outstanding taxes. When a person passes away, key responsibilities of the personal representative include gathering the deceased person’s assets, establishing the value of the deceased’s estate and paying the liabilities, before taking steps to distribute assets.
Not All Assets Fall Within the Estate
When a person dies their assets fall into one of two categories: (a) assets which belonged to the deceased and form part of their estate and (b) assets which may or may not have belonged to the deceased which do not form part of their estate.
Assets which do not generally form part of the estate include assets which are jointly owned by another person. Generally, jointly owned assets transfer to the surviving owner by operation of law upon the other’s death. For example, for property owned and registered in joint tenancy, ownership will normally vest in the surviving owner upon death and a simple document can be filed with the Land Titles office to reflect the change in ownership. Another example is a life insurance policy, which has a named beneficiary which will also pass outside of the deceased’s estate.
Only property that falls within the estate is distributed in accordance with the deceased’s Will or, where no valid Will was made, in accordance with the Wills, Estates and Succession Act (WESA).
Common Estate Litigation
Estate litigation takes many forms. One common situation is where the spouse or child of the deceased has been excluded from the Will, or whose share is not as large as they feel it ought to be. The law in British Columbia is that a spouse has a legal and moral obligation to provide for their surviving spouse and minor children, and a moral obligation to provide for adult children. While there may be good reason for the deceased to exclude a spouse or child, it may be open for that discontented family member to apply to vary the Will. Whether such an application will be successful is highly dependent upon the facts of each case. The court is likely to consider the size of the estate, provision made for the otherwise excluded spouse or child outside of the estate (for example, life insurance or pension benefits), gifts and transfers of assets made while the testator was still alive and the financial need of the respective estate beneficiaries, spouse or child.
Another common example is a dispute as to whether the document purported to be the deceased’s Will is in fact the deceased’s Will reflecting their fixed and final expression of their testamentary intention. Alternatively, the Will may be defective and fail to meet the legal requirements of a Will. For example, the Will may not have been properly signed or witnessed. In that case, it may be necessary to resort to the Courts to “cure” the deficiencies in the Will, if possible.
A more fundamental dispute may arise over the validity of the Will if it is claimed that the deceased lacked mental capacity to make the Will at the time it was signed or was unduly influenced to make certain gifts in a Will.
Litigation on the Increase
Estate litigation has become more prolific in recent decades and this trend is set to continue. This trend is likely a reflection of the rise in blended families, complicating the competing claims of potential beneficiaries; the broader definition of ‘spouse’ (at the time of passing, the deceased may be considered to have more than one ‘spouse’); the aging population and the increased wealth of this older generation which provides for larger estates.
According to a 2014 study by BMO InvestorLine we are entering an era of the largest inter-generational transfer of wealth in Canadian history, from those born in the 1930s and ‘40’s to the baby boomers. The prevalence of estate litigation and the recent changes in the law makes it more important that ever to obtain legal advice to ensure your rights and wishes are protected.
Angela Price-Stephens is an English and Canadian lawyer who has 25 years experience as a litigator of complex and challenging claims. Whether you are disinherited, a personal representative contemplating litigation or facing a claim brought by a beneficiary, Angela is here to provide cost effective, practical legal advice.
For more information on this article, or for confidential discussion of your claim, contact Angela Price-Stephens at 250 869 1124, or send her a confidential email at email@example.com.