Sabey Rule Blog

B.C. Court of Appeal Confirms that Notaries are Not Permitted to Draw Wills with Life Estates

By January 5, 2018 No Comments

The British Columbia Court of Appeal confirmed that notaries public are not permitted to draw wills that create life estates or trusts in a decision released December 21, 2017. In British Columbia, generally only lawyers may practice law, which includes drawing wills for a fee. However, members of the Society of Notaries Public of British Columbia are also permitted to draw wills for a fee, but there are restrictions on the types of wills they may draw.  Specifically, as set out in section 18 of the Notaries Act, notaries may,

(b)     draw and supervise the execution of wills

(i)    by which the will-maker directs the will-maker’s estate to be distributed immediately on death,

(ii)    that provide that if the beneficiaries named in the will predecease the will-maker, there is a gift over to alternative beneficiaries vesting immediately on the death of the will-maker, or

(iii)   that provide for the assets of the deceased to vest in the beneficiary or beneficiaries as members of a class not later than the date when the beneficiary or beneficiaries or the youngest of the class attains majority….

In Society of Notaries Public of British Columbia v. Law Societyof British Columbia, 2017 BCCA 448, the Society of Notaries Public sought a declaration that Notaries Public are permitted to draw wills creating a life estate.

Let me give you an example of a life estate. In my will, I might give my spouse the right live in my house during her lifetime, and provide that on her death, the house will then be divided among my children equally. My spouse would have a life estate or life interest, and my children the remainder interest.

The Society of Notaries Public argued that the remainder beneficiaries would have an interest in the property at death of the will-maker, even though they would not have possession of the property until the death of the beneficiary for life. The interest of the remainder beneficiaries vest at the time of the will-maker’s death. According to the Society of Notaries Public, the property can be said to be “distributed immediately on death,” in such a case.

The Society of Notaries Public were unsuccessful in the Supreme Court of British Columbia, and appealed to the Court of Appeal.

The Court of Appeal also rejected the Society of Notaries Public’s argument. Although remainder beneficiaries of a life estate may acquire an immediate vested interest, that is not the same thing as a distribution. Mr. Justice Frankel wrote,

[23]         Reduced to its core, the Notaries’ argument is that the words “distributed immediately on death” should be interpreted as “vested immediately on death”.  For example, they say that when a will-maker leaves real property to A subject to B having a life interest in that property, since A’s interest vests immediately, the property has been “distributed immediately” to A, notwithstanding the fact that A is not entitled to possession or use of the property until B dies.  I am unable to accept this argument.

[25]         There are principles of statutory interpretation that assist in determining the meaning of the words a legislature has chosen to use.  As I will explain, those principles lead to the conclusion that the Legislative Assembly used the expression “distributed immediately” in s. 18(b)(i) of the Notaries Act in its ordinary sense, namely, to describe a will in which the will-maker directs the assets of the estate to be immediately given out or delivered to those entitled to receive them; in other words, a will that directs the immediate transfer of both the legal and beneficial interest in the assets of the estate to the beneficiaries.

This decision means that if you wish to have a professionally drawn will in which you provide the right to a beneficiary to enjoy the property for life, but for other beneficiaries to receive the property after the life beneficiary’s death—which is fairly common in second marriages—then you will need to retain a lawyer to draw the will.