The Template Will: Pay now or pay later

This is a true story. It is a cautionary tale to anyone who thinks it’s a good idea to draw up their own will.

A woman (Myrtle) falls ill, goes into hospital in Feb 2006.

She makes a will in the hospital, using a “template”. No legal advice is sought. She dies soon after.
Myrtle is married to a Mr. P, her second husband, to whom she leaves nothing. She has five children (all adults), and leaves her estate to three of them. She ignores two of her children altogether: her two mentally disabled sons who probably need her help the most.

She appoints her son Bert as executor. Bert’s wife is one of the witnesses to the will, as is the husband of one of her daughters. Basic wills law: if a beneficiary, or the spouse of a beneficiary, is also a witness to the will, the gift to that beneficiary is invalid. Your basic “template” Will may not make that clear. The result is that part of Myrtle’s estate is distributed as if she left no will at all.

Bert is an accountant and has lent his parents (so he says) a lot of money over the years, which he now claims as a debt of the estate. Of course he has nothing to back that up.

The template Will does not give Bert the ability to refinance Mom’s property (a farm) and no one is making the mortgage payments, so the farm goes into foreclosure. The “template” does not include the powers Bert needs to deal with the estate assets properly.

So Bert offers to buy the farm from the estate. His sisters get greedy and refuse to agree to the price he offers. Then due to the foreclosure proceedings, the fact no one is maintaining the place, and the 2008 market melt-down, the value of the farm falls by 40%.

Bert eventually does buy the farm after putting in a whack of his own money for repairs to try to sell it. Because the template did not give him the specific power to spend that money, his sisters dispute his claim for reimbursement. They also dispute his claim for executor’s fees.

In addition to that dispute and the foreclosure, Mr. P makes a claim for the of the estate that falls outside of the will and the Public Guardian makes a claim on behalf of the two disabled sons. That makes four court actions out of one bad estate plan.

The dispute against Bert is heard by the Registrar in January 2011. Myrtle died almost 5 years ago and the Estate is still not distributed.

What is wrong with this picture? And how did an estate worth $813,466.48 (even after the fall in real estate prices) end up having only $57,032 left for distribution?

In this case, there were a number of factors, but at the bottom of it, the fact that Myrtle and her family wouldn’t spend say, $1,000 to have some legal advice and a proper will done, cost the family at least several hundred thousand dollars. If they could have gotten the farm sold in 2007, they probably would have been up by another two or three hundred thousand.

Havng a good will and estate plan drawn up might seem costly, but what if it could save you hundreds of thousands of dollars? I’ll bet Myrtle and her family would now think it was money well spent. If only they could go back and change things!

About Maria Holman

I am a lawyer with over 28 years of experience in drawing up wills, trusts and estate plans, helping clients with probate and estate administrations and advising business owners and families about planning for the future. You can find me at Webster Hudson & Coombe LLP in Vancouver, BC
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