BC courts have discretion to order interim payment from an estate before the trial and determination of a wills variation claim. What the courts do not have is the discretion to approve of an interim disbursement that would in effect be a re-writing of the disputed Will. In today’s post we will look at Henney v. Sander, 2014 BCSC 889, a case in which the court refused an application for interim distribution from an estate. Approving the proposed disbursement would be permitting the parties to re-write the Will without regard to the will-maker’s intentions.
At the heart of the Henney case was a husband and wife who married in BC in 1953. They had a 58-year marriage which ended upon the husband’s death on September 30, 2011. They had no children together, but the wife had children from a previous relationship. The husband died leaving a Will dated November 14, 2008 which directed that the residue of his estate be divided into 10 equal shares. Six of those shares, constituting 60% of the residue, were to be divided among 8 named step-nephews and step-grandchildren. The remaining 4 shares, or 40% of the residue, were to be paid to charities. His Will made no provision for his wife. Shortly before his death, the husband swore an affidavit explaining his wife was omitted deliberately as she was already financially secure and because his wife was a United States citizen; he was concerned that her estate would have to pay significant U.S. estate taxes.
The estimated gross value of the husband’s estate at his death in 2011 was approximately $35 million. Because the husband had no children, his wife was the only person having standing to bring a wills variation claim against his estate. Not long after the wife’s wills variation proceedings were commenced, she died, leaving an estate valued at $6 million. Her Will made certain specific bequests and divided the residue of her estate equally among her surviving children. If her husband’s Will was varied in her favour, her daughters would benefit as the residual beneficiaries of her estate. A mediation took place in 2013, at which some the residual beneficiaries (the charities and two of the step-grandchildren) agreed to a settlement which would give a portion of their respective shares of the husband’s estate to the wife’s surviving children. The remaining beneficiaries did not agree to the proposed partial settlement.
The executor of the wife’s estate applied for approval of the interim distribution in accordance with the proposed partial settlement reached at the mediation. Weighing all of the factors as set out in Hecht Estate, Justice Perlman refused to approve the distribution proposed in the partial settlement. In Hecht, the amount of the proposed interim payment was small in relation to the total value of the estate. Hecht was distinguishable from the Henney matter in several respects. In Henney, there was no evidence of immediate financial need on the part of any of the parties who were in favour of the proposed interim payment. Six of the residual beneficiaries in Henney opposed the interim payment. The size of the proposed payments and the persons to whom they would be paid were the main sticking points in Henney:
Justice Pearlman concluded that the court was in effect being asked to approve a variation of the Will before trial, and without having all of the evidence necessary to determine, on the principles stated in Tataryn v. Tataryn,  2 S.C.R. 807, whether the husband made adequate provision for his wife, and if not, what provision is adequate, just and equitable. It is for the trial judge in the wills variation proceedings to hear the evidence relating to the will-maker’s intentions and his legal and moral duties to his wife. The trial judge will also have the benefit of full submissions on the potential liability of the wife’s estate for US estate tax, the extent to which that was a factor in the husband’s exercise of his testamentary autonomy, and whether or not it provided a rational reason for his decision to exclude his wife from his Will. In short: while the result requested by the proponents of the proposed partial settlement might be speedy, it would not constitute a just disposition of this proceeding. Allowing the interim application would be allowing the parties to re-write the Will in a manner that disregarded the will-maker’s intentions.
BC courts may approve interim payment by an executor from an estate, notwithstanding a pending claim for variation of a will. The court may not exercise that discretion where the proposed distribution amounts to variation of the will before trial, without evidence. Such a result would not be just.
Do you have any questions about interim disbursement in wills variation matters? Our experienced estate litigators can help.
Onyx Law Group represents clients in family law, estate and trust litigation, estate planning and probate matters. Consult with our experienced team at