The British Columbia government has introduced changes to the Wills, Estates and Succession Act. The Attorney General Statutes Amendment Act, 2019, if enacted, will include changes to sections 16, 61, 130, 131, 151, 152 and 155. I will highlight some of the changes to sections 151 and 155.
Section 151 permits a beneficiary of an estate to apply to court to make or defend a claim on behalf of the estate if the personal representative does not do so. For example, a beneficiary of an estate may wish to make a claim that a house that the surviving joint tenant of the deceased’s house holds the house in trust for the estate, while the surviving joint tenant claims beneficial ownership. If the personal representative refuses to pursue a claim, or perhaps the personal representative is also the surviving joint tenant, the beneficiary may apply to court pursuant to section 151 for permission to bring the claim.
The current wording in section 151 only allows “a beneficiary or intestate successor” to apply. What if the person who wishes to make a claim is not currently a beneficiary of the will, but is making a claim as a child or spouse of the deceased to vary the will so that she will receive a share of the estate? Section 151 does not appear to apply to the wills variation claimant to allow her to apply for leave to sue. This is what occurred in Sharma v. Sharma, 2018 BCSC 1262, which I wrote about here.
The proposed changes to section 151 will allow a wills variation claimant to apply under that section. Instead of referring to “a beneficiary or an intestate successor,” the section will refer to a “specified person,” which is defined as “a beneficiary, an intestate successor or a person who may commence a proceeding claiming the benefit of Division 6 [Variation of Wills] of Part 4 [Wills].”
The current wording of section 151 also requires a person who is given permission to sue on behalf of the estate to bring the claim “in the name of and on behalf of the personal representative.” If the claim is against the personal representative this leads to the absurdity of the same person appearing in the style of cause as both a plaintiff and a defendant. For example, the style of cause may be John Smith as executor of the will of Mary Smith v. John Smith. If I may put it technically, a person appearing as both a plaintiff and a defendant is a pretty big no no.
The proposed changes include amending section 151 so that the claim will be brought “in the name of the specified person and on behalf of the estate,” which will solve the problem of the same person’s name appearing as both a plaintiff and a defendant.
Section 155 provides that the personal representative must not distribute the estate within 210 days of the estate grant, or longer if a wills variation or certain other type of proceeding is brought. However, as the section is currently worded, the personal representative may distribute
(a) with the consent of all beneficiaries and intestate successors entitled to the estate, or
(b) by order of the court.
The problem with this wording is that it does not expressly require the consent of a person who is not a beneficiary, but who may bring a wills variation claim. I would argue that the main purpose of this section is to ensure that a person with a wills variation claim has the opportunity to proceed before the estate can be distributed. The 210 days from an estate grant corresponds with the amount of time to both file a wills variation claim (180 days) and serve the claim on the personal representative (a further 30 days).
The proposed amendments will require the consent of :
(a) all beneficiaries who have an interest in the estate;
(b) all persons who may commence a proceeding under Division 6 [Variation of Wills] of Part 4 [Wills] in relation to the estate.
This will make it clear that the personal representative will require the consent of the deceased’s spouse and children, whether or not they are beneficiaries of the will.
There is one proposed change that I don’t like. Proposed new section 155 (1.3) provides:
(1.3) Despite subsections (1.1) and (1.2), the personal representative of a deceased person may distribute the estate of the deceased person without the consent of one or more persons whose consent would otherwise be required if the personal representative sets aside all of the following:
(a) all the specific gifts to beneficiaries who have not been located;
(b) a sum equal to the share of the residue of all beneficiaries who
(i) have an interest in the residue, and
(ii) have not been located;
(c) a sum equal to the share of the estate of all intestate successors who
(i) have an interest in the estate, and
(ii) have not been located;
(d) a sum equal to an amount sufficient to satisfy any claim under Division 6 [Variation of Wills] of Part 4 [Wills] in relation to the estate.
Subsections (a), (b) and (c) are fine, but (d) concerns me. The nature of wills variation claims is such that it is difficult to predict how much will be awarded to a claimant. One might think for example if the deceased left his entire estate to two of three children, that setting aside one-third for the disinherited child making a wills variation claim, but it is quite possible that the disinherited child will receive more, particularly if the other children received significant amounts from the deceased outside of the estate. Although the personal representative is supposed to be neutral in wills variation claims, it is not unusual for the personal representative to be hostile towards the claimant and it may underestimate the potential claim. It is preferable to require the personal representative to make a court application before making a distribution without the consent of the wills variation claimant.