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Wills Variation

Wills Variation Action Not Barred By Marriage Agreement

The existence of a marriage agreement barring a wills variation action is not determinative of a surviving spouse’s claim under wills variation legislation. In Morgan v. Pengelly Estate, 2011 BCSC 1114, the court affirmed that a cohabitation or marriage agreement ought to receive consideration, but even an agreement that is fair, solemn and well-considered is unlikely to be a complete answer to a wills variation action.

Marriage agreement waiving wills variation action

The claimant, Mr. Morgan, and decedent, Ms. Pengelly, lived together in a marriage-like relationship for approximately nine years prior to her death in 2006. The parties signed an agreement, dated June 29, 1999, which provided for the ownership and management of their assets, both during cohabitation and upon subsequent separation or death (the “Marriage Agreement”).

The Marriage Agreement contained a waiver by each of the parties of any claims either may have against the other arising from their marriage. The waiver included claims under the Divorce Act and family property legislation, as well as any claims under the Wills Variation Act and the Estate Administration Act (both of which have since been repealed and replaced by the Wills, Estates and Succession Act, [SBC 2009] c. 13). The Marriage Agreement also included a waiver of any claims either might have based on “the law pertaining to trusts or unjust enrichment” or based on “any direct or indirect contribution to property owned by the other whether or not savings occurred through the effective management of the household.”

Surviving spouse commences wills variation action despite marriage agreement

When Ms. Pengelly died in 2006, the net value of her estate was approximately $2.2 million. Her 1996 will divided her estate equally between her three adult sons. Mr. Morgan commenced a wills variation action claiming, in part, for a declaration that the will failed to make adequate provision for his proper maintenance and support.

At trial, Mr. Morgan (then 81 years of age) acknowledged that Ms. Pengelly made him aware of her intention that her three sons share the bulk of her estate. That intention never wavered and was expressed to the claimant throughout their relationship. He agreed that he signed the Marriage Agreement willingly and that he understood its meaning.

Legal and moral obligations must be considered on wills variation action

British Columbia law provides that if a will-maker dies leaving a will that does not, in the court’s opinion, make adequate provision for the proper maintenance and support of the will-maker’s spouse or children, a judge may, in his or her discretion, order that the provision that the judge thinks adequate, just and equitable in the circumstances be made out of the will-maker’s estate for the spouse or the children. Per the leading decision of Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807, two sorts of norms must be addressed as a guide as to what is adequate, just and equitable in the circumstances: legal obligations and moral obligations.

Interplay between marriage agreement and wills variation action

The court in Morgan held that the Marriage Agreement vitiated the will-maker’s legal obligation to the claimant. However, the Marriage Agreement did not vitiate the will-maker’s moral obligations. Thus, their Marriage Agreement was a relevant consideration on the wills variation action, but it was not conclusive. It did not negate the will-maker’s moral duty to beneficiaries.

Analysis of the moral obligation

The size of Ms. Pengelly’s estate made it possible to fully address the moral obligations toward all beneficiaries. While the court concluded that the will ought to be varied, it did so only to the extent required to provide the justice to the claimant that the will failed to achieve, commensurate with the will-maker’s moral obligations.

Mr. Morgan was a loyal and loving companion to Ms. Pengelly for nine years. Given the length of the relationship, the relative incomes of the parties throughout their relationship, and the provisions of the Marriage Agreement, the court was of the view the Mr. Morgan’s entitlement would have been modest.

In the result, the will was varied to provide for a bequest to Mr. Morgan in the amount of $225,000 (approximately 10% of the net value of Ms. Pengelly’s estate). The residue was split equally between her three sons.

Take home point on wills variation actions and marriage agreements

A marriage agreement barring a wills variation action must be given consideration in the analysis of the legal and moral obligations owed by the will-maker, but the court retains the ultimate discretion as to the application of wills variation legislation.