Dividing an estate in a blended family can be complicated. What happens if your mother becomes incapacitated, and your stepfather then enters a new common-law relationship with someone else? When your stepfather dies, is your mother still entitled to a share of the assets she and your stepfather accumulated during their marriage? Can your stepfather give preference to his natural children over you?
The blended family and the will in question
In Westman (Guardian ad litem of) v. Westman Estate, 2000 BCSC 236, the court was asked to consider entitlement to an estate in a blended family situation. The stepfather, Lars Westman, prepared a will in 1996 which was designed to prevent his estate from going to his estranged wife, Ann, who had been permanently incapacitated and hospitalized after having a stroke in 1985. Lars felt that if he left anything significant to his hospitalized spouse, it would be a windfall to Ann’s children from her first marriage. He asked his lawyer to prepare the will so that when he died, Ann would get $100,000 in trust, to be used to provide for her day-to-day basic needs in the hospital. Lars’ will stated that when Ann died, any money left in the trust and all of the other assets in Lars’ estate would go to Lars’ son from his first marriage.
Lars died in 1999. Ann was still alive, though hospitalized. By the terms of Lars’ will, neither Ann nor her children from her first marriage would inherit any of the estate that Lars and Ann accumulated during their 14 year marriage. Ann’s children from her first marriage brought a claim on her behalf, asking the court to vary Lars’ will.
Determining what is a fair division of an estate
The determination of what is a fair division of an estate is governed by principles set out in a prominent Supreme Court of Canada decision, Tataryn v. Tataryn Estate,  2 S.C.R. 807. In determining what is “adequate, just and equitable” two sorts of norms must be addressed:
- Legal obligations. These are the obligations which the law would impose on a person during his or her lifetime if the question of provision for the claimant were to arise. The legal obligations are those in the Divorce Act, family property legislation, and the law of constructive trusts. The law presumes equal division of family property on divorce, but the court can depart from an equal division if such a division would be unfair. The same analysis applies when considering division of an estate in a will.
- Moral obligations. These obligations are found in society’s reasonable expectations of what a person would do in the circumstances, by reference to contemporary standards. It is a matter of balancing conflicting claims against each other (for example, adult independent children and a second spouse). Some moral claims may be stronger than others. The court must weigh the strength of each claim.
Did the husband fulfill his legal and moral obligations to his second spouse?
No. Given the circumstances, the court found that Lars did not fulfill his legal and moral obligations to Ann in his will. The court decided that it was just and equitable for half of Lars’ estate to pass to Ann. In accordance with the legal obligations imposed by family legislation, Ann would have been entitled to half of the family property in the event that she and Lars had divorced on the day prior to his death. On the facts in this case, the court did not have reason to depart from an equal division. Further, on the issue of moral obligations, the court stated that it was society’s expectation that Lars’ estate continue to support his incapacitated widow.
Fact that influenced the court’s decision as to what was fair in this blended family situation
It is important to note that there is no automatic entitlement to a spouse getting half; that is the presumption under family legislation, but as noted above, the court can depart from an equal division if such a division would be unfair. In fact, as we discussed in a previous post, in some cases, it may be acceptable to leave a spouse out of a will. Ultimately, what is fair depends on the circumstances.
There are two important facts that underpin the court’s decision that Ann was entitled to half of Lars’ estate: the contributions the spouses made to family property during their 14 year marriage, and Lars’ false assurances to his stepdaughter when she questioned him about how the estate would be divided on his death.
Contributions to family property during the marriage
When Lars met Ann in the early 1960s, he was “not a very successful” real estate salesperson, with no appreciable assets to bring to the relationship. The court found that Ann made major economic contributions to their relationship, through her inherited assets from her first husband’s death and her employment income. By 1969, Lars was also producing income, but he did not contribute assets until 1988 when he received a $600,000 inheritance from his mother.
Lars attempted to use his will to prevent his $600,000 inheritance from being shared with Ann and Ann’s children from her first marriage. The court found that this would not be fair. Ann contributed her inheritance to the family unit in the early years, so to shield Lars’ inheritance in the later years would essentially be saying that “what was hers was theirs, but what is his is his.”
Stepfather was not truthful when speaking to his stepchild about his estate plan
Lars knew that divorce proceedings would expose the assets to division with Ann. He harboured anxieties about his exposure. After he entered into a new common-law relationship in the early 1990s, Ann’s daughter wanted to protect her mother. She twice approached Lars and asked if perhaps he and Ann should be legally divorced. Lars knew that if he told Ann’s daughter that on his death the estate was to be evenly divided between Ann’s family and Lars’ family, she would not press the issue of divorce. Lars told Ann’s daughter that his will made an even division. The court found that Lars’ assurance to Ann’s daughter, which was untrue, took away the court’s power to hear and determine, in a timely fashion, the issue of unfairness of an equal division of assets on divorce, so Lars was not permitted to say that it should be resolved in his favour at this late date.
Take home point on dividing an estate in a blended family context
Whether a will makes adequate, just and equitable provision for spouses and children is guided by an analysis of the legal and moral obligations of the will-maker. The analysis may be complicated in situations involving a second marriage or blended families. That being said, in the more traditional family situation and the blended family context alike, the determination of what is fair depends on all of the circumstances, such as the length of the marriage and the spouses’ economic contributions. In this case, equal division of the estate was found to be fair, but that is certainly not always the case.