My Fair Share?
PART 1 – WILL-MAKERS PERSPECTIVE
As parents, we expect our children to have the occasional argument or even (gasp!) fight with each other, but most of us have no idea how nasty things can get if a legal war erupts after we are gone because of a B.C. law, known rather innocuously as the Wills, Estates and Succession Act (“WESA”). Within the WESA lies the power to destroy your estate plan and cause significant emotional and financial pain to your family after your death.
So how does the WESA work its black magic? A spouse or child (not step-child) who is unhappy with his or her inheritance from your estate can sue your estate to contest your Will in order to be included for a share, or to seek a larger share, at the expense of the other named beneficiaries. Adult children are often the claimants in WESA cases, and even financial independence of such children does not preclude a claim. The judge will attempt to apply the test set out in the WESA, namely to first determine if in your Will you made “adequate provision for the proper maintenance and support of your spouse and children”, and then to decide what, if any change to your Will should be made to “provide adequate, just and equitable provision” from your estate for the claimant. What this translates to is that a judge must balance the competing interests of children and surviving spouse to arrive at a decision that may substantially alter your Will.
If your immediate family consists of a first spouse and one or more children from that marriage, you should not have to worry about the WESA unless you intend to disinherit a family member. But if you have a blended family resulting from re-marriage, you will have difficulty planning your estate to avoid the prospect of a WESA claim being made when you are gone.
There are ways to plan around the possible impact of the WESA, including placing your assets into joint tenancy ownership with a right of survivorship, or creating a formal trust before death into which you transfer your assets. Both these options have significant risks and costs and should only be undertaken after receiving professional estate planning advice. While not for everyone, spending all your money before you die is a great way to avoid a WESA claim!
Some of you creative thinkers may be contemplating tearing up your Will in order to avoid the WESA, while the perennial procrastinators among you will be patting yourselves on the back for not having a Will in the first place, as the WESA does not apply to an intestate estate. Neither of these approaches is recommended however, as your estate would then be distributed to the beneficiaries established by B.C. law, which may well include the family member you wanted to disinherit in the first place!