Usually, will-makers have free rein over how they dispose of their property in a will. However, there are some exceptions. For example, a deceased’s spouse or child can challenge a valid will under the Wills, Estates and Succession Act, in which case they could ask the court to vary the will if they believe that it does not make adequate provisions for their proper maintenance and support.
Another exception, which will be covered in this blog, is the testamentary contract. The willmaker (testator) may contract to leave their estate to someone. A common example of this could occur in exchange for services. If the testator later changes their mind by amending their will, the original beneficiary could sue to try to enforce the contract in court.
This article will examine some of the principles relating to testamentary contracts below. It will also look at a recent decision from the Court of Appeal for British Columbia in which a woman claimed that her aunt promised to leave most of her estate to her and therefore should be prevented from changing her will and removing her as a beneficiary.
A testator may contract with a beneficiary to leave their estate to them, and this may be enforceable by the beneficiary. If the beneficiary helps or provides services to the testator and does not receive payment in exchange, the testator might have agreed to repay them through a gift in their will.
However, proving the existence of such a contract may be difficult, especially in the absence of a written agreement. Simply being named as a beneficiary in a will does not prove the existence of an agreement on the testator’s part not to change the will in the future by removing the beneficiary.
In De Angelis v Siermy, the family had a history of property development in Vancouver. In the 1960s, the defendant, the plaintiff’s aunt, and her husband combined a property they owned on Haro Street with an adjacent property owned by the defendant’s brother, the plaintiff’s father. They started a family company to develop an apartment block on the land with 25% of the shares owned by each of the defendant and her husband, the plaintiff’s father and another of their siblings.
The plaintiff had helped her aunt and uncle with their personal and business affairs since the 1980s. They had a strong bond and the plaintiff assisted the couple with their health care while working for another company the couple had set up to manage various properties. Specifically, the plaintiff did banking work and assisted with an apartment building owned by the company on West 13th Avenue. The plaintiff was also a salaried employee of the family company that owned the Haro Street property.
The plaintiff claimed that from the 1980s, the defendant had confirmed an intention to leave her the majority of her estate. The plaintiff said this was to compensate for unpaid services and balance out the inequity that had resulted from her father giving his sibling a 25% share in the Haro Street property.
The plaintiff argued that in 2002, the defendant formalized the testamentary contract by executing an estate document that left most of the estate to her. The plaintiff also produced three letters allegedly written by the aunt to her husband explaining why her will named the plaintiff as the beneficiary.
The dispute erupted when the defendant prepared a new will in 2011 that left her estate to the plaintiff’s cousin. The plaintiff claimed that the defendant had breached the testamentary contract.
The trial judge found that the signatures on two letters had been forged or obtained surreptitiously by the plaintiff. As a result, there was no evidence of a testamentary contract. Handwriting experts thought the signature was probably the defendant’s but they could not be sure as it was a simple signature.
The Court of Appeal found that the trial judge’s conclusion was acceptable based on the evidence. The letters were inconsistent with the defendant’s beliefs about how the businesses were structured. This was consistent with the judge’s other findings, including that the 25% shares went to the siblings as family members, plus the defendant’s husband because of his contributions to the company. In addition, the lawyer that prepared the 2002 will was never told about an agreement and explained to the testator that she could change her mind at any time.
The plaintiff argued in the alternative that her aunt was unjustly enriched by the services she provided over the years. To succeed, the plaintiff needed to prove that the defendant was enriched at the plaintiff’s deprivation and that there was no juristic reason for the enrichment, such as in the case of a gift or contract.
The Court of Appeal confirmed the trial judge’s decision that this claim failed because the plaintiff provided personal services to her aunt and uncle as a gift, and business-related services because the family company compensated her. In particular, the court said there was a “family ethos that everyone contributes and everyone gains from the family enterprise.”
The Court dismissed the plaintiff’s claims to the testator’s estate.
Meridian Law Group understands that disputes relating to inheritance can be stressful and emotional. As a result, the firm’s team of estate litigators aims to settle disputes quickly and efficiently. However, if required, we have a reputation for firmly advocating for our clients’ legal rights in the courtroom.
We are located in downtown Vancouver and represent clients in the lower Mainland and throughout British Columbia. To arrange a confidential consultation with Meridian Law Group to discuss your estate dispute, please call (604) 687-2277 or fill out the online form.