In this series of posts, Darren Stewart will discuss the law with regard to making specific bequests in your will to charitable recipients and how such bequests can be challenged by your children. Later, Maria Holman will discuss some estate planning strategies that can be used to allow your assets to pass outside your estate to whatever organizations or whomever you choose.
Your children have driven you crazy all their lives. Meanwhile, there’s the soup kitchen, SPCA or church group down the street that’s doing invaluable work to improve our society and community. Maybe you’re a history buff and would love to give the local historical society a boost. Our society loves a philanthropist. And be honest with yourself, you want your last move to really count. So do it. Go visit your lawyer. Tell them you want to leave it all (or most of it) to the charity or society of choice. And you’re done. Screw the kids. Doesn’t that feel better?
Unfortunately it’s not that simple. Your children (and surviving spouse) can always challenge your will. You cannot just simply leave your estate to whomever you choose, as highlighted in the recent, interesting British Columbia Supreme Court case, Ketcham v. Walton, 2012 BCSC 175.
The written reasons do not tell us too much of the back story. We know that Mr. Eric Worthy Clay died on November 15, 2009 leaving three adult children and an estate worth approximately $800,000. By the terms of Mr. Clay’s will (the “Will”) this money was to be distributed among a number of friends and to the Sooke Region Historical Society and theMetchosinSchoolMuseum. Mr. Clay also instructed his executor, by his Will, that $20,000 was to be spent to “find a suitable place to erect a cairn memorial to Alexander Dawson Donaldson.” The Will named the Dominion Command of the Royal Canadian Legion as a suitable recipient of the residue of the estate, but left the discretion to pay such residue with his executor. No money was left to Mr. Clay’s children who were estranged from him.
Mr. Clay must have been aware of the Wills Variation Act. To paraphrase, the British Columbia statute says that when you die and your estate is distributed by your will and your children or spouse don’t like what you say in your will, they can go to court to challenge the contents in hopes the court will vary the will in their favour.
This statute is great for people who are disinherited by their parents for reasoning that our society has grown to frown on. Say you don’t like one of your children’s choice of religions or choice of spouses. You can’t just decide to write them out of the will. However, the law may also stymie some legitimate philanthropy.
The court, in deciding a Wills Variation claim, must give some deference to the testator’s wishes. But it seems that, no matter how little you like your children, or how deserving that charity is of your money, that your disinherited children will get a least something out of a variation claim.
Mr. Clay tried to circumvent this. He included provisions in the Will such that the executor “should be at liberty, should he deem it advisable, to take a position on the merits of the Wills Variation action to defend the will and the gifts contained therein against the claims made in the Wills Variation action.” The Will also gave express instructions to the executor to use any and all funds in the estate to defend any actions brought by Mr. Clay’s children under the Wills Variation Act.
Generally, the law requires an executor in a Wills Variation action (or any action involving a will) to remain neutral and simply to carry out the wishes of the testator.
The court chose not to uphold Mr. Clay’s wishes. Instead, it found, Mr. Clay’s instructions in the Will should be void as contrary to public policy as far as they purport to deny Mr. Clay’s children their recourse to the courts. The language, in effect, had the potential to deny the children the fruits of a victory on a Wills Variation action and therefore would not be upheld by the court. Finally, the court found that Mr. Clay’s executor must remain neutral if a Wills Variation action should proceed.
So Mr. Clay’s children are free to bring a Wills Variation claim. We will watch for any report on the outcome. In the meantime, in the next post, we will look at the underlying law that applies to testamentary bequests to charities and how they can be attacked by deserving (or undeserving children).