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Wills Variation

Can a Will be Varied Under Moral Obligation?

This was a dispute between a widow and her two stepsons regarding her deceased husband’s estate.

The background: Saugestad v. Saugestad, 2008 BCCA 38

Joan and Ragnar Saugestad married in 1992. It was a second marriage for both of them, and Ragnar had two sons from his first marriage. His first wife had passed away from breast cancer three years earlier. Joan had no children, and following the termination of her first marriage she worked as a realtor. Joan retired some five years after she married Ragnar, and they began to travel extensively. The cost of the travel was largely paid for by Ragnar, and partly paid out of his capital assets.

On Ragnar’s death,  Joan received:

  • two condominiums the couple owned as tenants in common
  • the home they owned as joint tenants
  • his pension, of around $1,350 per month
  • a CPP survivor’s benefit
  • the remainder of funds in Ragnar’s various bank accounts
  • the benefit of Ragnar’s RRSPs

In his will Ragnar stated that although he loved Joan, he had made alternate provisions for her and so she did not require a bequest from him. Everything he bequeathed in his will went to his two adult sons from his first marriage.

This included:

  • shares in a private investment company, Nistera
  • an inheritance from Ragnar’s mother
  • Ragnar’s interest in the condominium he owned in common with Joan
  • a condominium in Florida that Ragnar solely owned

Can a will be contested under moral obligation

Joan wanted to contest the will so that she would receive 80% of Ragnar’s estate.

The trial judge followed the two-step approach set out in the Supreme Court of Canada decision in Tataryn v. Tataryn Estate. First, she addressed the obligations Ragnar would have had to Joan under the Family Relations Act (FRA) had the marriage ended in divorce, and then she considered Ragnar’s moral obligations and whether moral claims against the estate had been or could be met.

The judge accepted that the Florida condominium and Nistera would be considered family assets for the purpose of division under the FRA, but she found based on the relevant factors, such as the extent to which the property was acquired by one spouse through inheritance or gift, the date the property was acquired, and the circumstances of the spouses, that these assets should be notionally divided 80/20 in Ragnar’s favour. She found that the inheritance from Ragnar’s mother was not a family asset but, if it was, it should also be divided 80/20. Following the notional division of assets, Joan was left with around $50,000 more than she would have had from a division of family assets under the FRA.

On appeal

On appeal, Joan argued that Ragnar had deliberately arranged his affairs to prevent her from making otherwise valid claims on the estate. The Court of Appeal disagreed and accepted the trial judge’s analysis. The only change the Court of Appeal made was to give Joan Ragnar’s one-half interest in the condominium they owned together, subject to Joan assuming the entire remaining mortgage.

Ragnar recognized the moral claims of his wife and his sons, and he reasonably arranged his affairs to balance their claims.