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Estate Law, Wills Variation

Equal Treatment Not Always Required When Dividing an Estate in BC

When dividing an estate in BC, equal treatment of a will-maker’s children is not required to make adequate, fair and equitable provision. In a previous blog, we discussed Grewal v. Litt, 2019 BCSC 1154, in which a son claimed that he was entitled to compensation in respect of his on his parents’ farm property before any division of their estates between him and his siblings. While the son’s unjust enrichment claim did not succeed, the court held that his contributions were relevant in the context of the wills variation claim brought by his sisters. Today’s post will discuss the wills variation claim based on unequal treatment of siblings when dividing an estate in BC.

Unequally dividing an estate among children in a will  

Nahar Grewal died on February 2, 2016 at age 88 and his wife, Nihal, died on March 22, 2016, at age 89. In 1993, Nahar and Nihal executed mirror wills (the “Wills”), which left everything to one another, and, on the passing of both of them, their estates were to be divided among their six adult children as follows:

(a)      $150,000 in cash to each of their four daughters; and

(b)      the residue to be divided equally between their two sons.

As of the date of death of the parents, the two primary assets of the estates were the family home on East 62nd Avenue in Vancouver, BC and farm property on Cambie Road in Richmond, BC. As of trial, both properties had been sold and the current net value of the combined estates was between approximately $9 million and $9.3 million. Under the Wills, and assuming a net value of the estate of $9 million, the daughters would collectively receive about 6.6% and the sons 93.4%. In dollar terms, each of the sons would receive $4.2 million, while the daughters collectively would receive $600,000.

Challenge to unequal division of estate

The daughters commenced proceedings seeking variation of the Wills, pursuant to s. 60 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (the “WESA”), so that the residue of the estate be divided equally among the six children. The daughters took the position that, by the Wills, they were discriminated against by the parents and effectively disinherited, based on the fact that they are daughters and on the parents’ adherence to traditional Sikh culture and values, which favoured sons over daughters. There was no dispute among the parties in Grewal v. Litt that the parents owed a moral obligation to the daughters and that the Wills failed to make adequate provision to satisfy that obligation. There was, therefore, no dispute that the Wills must be varied. Instead, the essential dispute concerned how the Wills should be varied to accomplish provision for the daughters that is adequate, just and equitable, and the extent to which the parents’ testamentary autonomy should be respected. Our associate counsel Jackson Todd was co-counsel for the daughters on this landmark wills variation case and succeeded in obtaining a substantial variation of the large estate in favour of his clients.

General principles to be applied in a WESA s. 60 wills variation claim

On an application to vary a will, the court must ask itself whether the will makes adequate provision and if not, order what is adequate, just and equitable:  Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807.  “Adequate, just and equitable” is determined in the specific circumstances and in light of contemporary standards.  Balanced against this consideration is the principle of testamentary autonomy. However, testamentary autonomy must ultimately yield to what is “adequate, just and equitable.” The claims in Grewal v. Litt concerned a will-maker’s moral obligations toward independent adult children.  With respect to such claims, provided the size of the estate permits, and in the absence of circumstances that negate the existence of such moral obligations, some provision for such children should be made.

No legal obligation to treat equally when dividing an estate

In the absence of express reasons for an unequal distribution, contemporary standards create a reasonable expectation of children sharing equally in a parent’s estate. However, there is no legal obligation to divide an estate equally. The fact that an independent adult child has not received the same provision under the will as the will-maker’s other child or children, will not, of itself, constitute a breach of the will-maker’s moral duty. The adequacy of a moral claim is not easy to assess, especially where (as in Grewal v. Litt) a child has not been disinherited, but has received something less than her sibling or siblings. In the post-Tataryn era, the following considerations have been accepted as informing the existence and strength of a will-maker’s moral duty to independent children:

  • relationship between the will-maker and claimant, including abandonment, neglect and estrangement by one or the other;
  • size of the estate;
  • contributions by the claimant;
  • reasonably held expectations of the claimant;
  • standard of living of the will-maker and claimant;
  • gifts and benefits made by the will-maker outside the will;
  • will-maker’s reasons for disinheriting;
  • financial need and other personal circumstances, including disability, of the claimant;
  • misconduct or poor character of the claimant;
  • competing claimants and other beneficiaries.

Evaluating the moral claims to the estate in Grewal

Madam Justice Adair was not persuaded that the parents’ decision to treat their children unequally should be rejected as motivated solely by unacceptable discrimination against daughters. However, on a consideration of all of the other factors listed above, Madam Justice Adair concluded that there should be a substantial increase in the gifts to the daughters based on other factors, particularly the gifts and benefits that the sons received during the parents’ lifetimes, the influence of cultural values on the parents’ choices, and the daughters’ contributions to the parents’ care in their later years when their health was failing.

Equal division of the estate not the only fair result

During their lifetimes, the parents never treated the children equally. Against that background, Madam Justice Adair was of the view that the daughters could not have had a bona fide expectation, based on the parents’ conduct, that they would each receive a one-sixth share of the estate on the parents’ death. Provision that was adequate, just and equitable in the circumstances in view of the parents’ moral obligations to the daughters, while respecting (to the appropriate degree) the parents’ testamentary autonomy, was division of the estate 60% in favour of the daughters and 40% in favour of the sons. Put in other terms, it was held that the Wills did not make adequate provision for the proper maintenance and support of the daughters and as such it was ordered that the Wills be varied to the effect that each daughter was entitled to 15% of the residue and each son was entitled to 20% of the residue.