An interesting recent case has brought British Columbia’s Wills Variation Act into the news

Deborah Peri sought to challenge the will of her biological mother’s husband, “Herb” Doman, which did not include any provision for Ms. Peri. Ms. Peri was born in 1955 in Washington State. Mr. Doman’s name appeared on Ms. Peri’s birth certificate, and he was indicated as her father on the papers to bring her into Canada. However, at the time of the hearing, it was established that Mr. Doman was not in fact Ms. Peri’s biological father, and Ms. Peri’s mother filed an affidavit that Mr. Doman had known this before Ms. Peri’s birth. After her birth, Ms. Peri was placed in private foster care, and had limited contact with Mr. Doman, although he paid for various expenses. In 1982, Ms. Peri signed a document in which she agreed to relinquish any claims on Mr. Doman’s estate and that of her mother, as well as limiting further contact with the Doman family.

In British Columbia, only spouses and children have the right to challenge the will of a person (called a Testator). Section two of the Wills Variation Act, RSBC 1996, c. 490, provides that if the Court feels that a person’s will does not provide adequately for the “proper maintenance and support” of the testator’s spouse or children, the Court may order the provision that the Court thinks to be “adequate just and equitable in the circumstances” be made out of the estate for the spouse or children.

“Spouse” is defined in the Act as two people who are married, or who live in a marriage-like relationship, same sex or otherwise, for two years. There is no definition in the statute, however, for “children.” Earlier cases have limited “children” to natural and legally adopted children; however, Ms. Peri contended that the definition of “children” should be expanded in certain cases, such as where the testator stood in the place of a parent (“in loco parentis”), where the testator claimed to be the parent but was not, or where the claimant is the product of artificial insemination.

Justice Burnyeat concluded Ms. Peri had not brought herself within the class of “children” under the Wills Variation Act, and dismissed her application. In his view, it is for the legislature to expand the definition, and until the Act is amended, only natural and legally adopted children can challenge a will under British Columbia’s Wills Variation Act.

The full decision can be found here

We are frequently contacted by potential clients who wish to have their wills prepared. Deciding what you wish to do with your assets at the time of your death is an important facet of estate planning, but many people have not considered what will happen to them if they lose capacity while they are living. While the number of people diagnosed every year with Alzheimer’s or dementia is growing (disease statistics from the Alzheimer’s Society of British Columbia are here ), mental incapacity is not limited to senior citizens, and can arise immediately and without warning.

A simple example illustrates why you should plan ahead, even if you are in the “prime” of your life: Alan is a successful businessman, who owned his own home and had significant savings in his own name when he married Beth a few months ago. She moved into his home, and they just had twins, so Beth quit her job and is staying home to be the primary caregiver to the kids. On the way to dinner with a client, Alan slips, hits his head and falls into a coma. While his injury isn’t life-threatening, Alan’s doctors are not sure when he will recover, or if he will recover fully. Alan and Beth hadn’t got around to doing any estate planning following their marriage, and most of their accounts and assets are still in Alan’s name only. Beth is left with a mortgage and other routine expenses, without any assets in her name to pay for them. She might not even be able to reinsure the family car as it is owned in Alan’s name. The bank won’t let her use Alan’s accounts because her name isn’t on them, and there is no one to run Alan’s business.

Beth’s situation would be easier if Alan had executed two straight-forward planning tools. The first is an Enduring Power of Attorney. This document allows you to designate a person who can manage your legal and financial affairs in the event you become incapable. In the case of spouses, it is common to name the other spouse, often with an alternate as well. The Power of Attorney is called “Enduring” if it contains a provision that it continues to be in effect if the donor (Alan) becomes mentally incapable – which would allow Beth (the “agent” or “attorney”) to take control of his accounts and pay the mortgage, hydro, gas, telephone bills, and renew insurance, etc. The document can also set out when the document comes into effect (i.e. upon the written opinion of a licensed doctor).

The second tool is a Representative Agreement. This document allows a person to designate a person to make health care decisions if the person becomes incapable. This may be particularly important for people with religious convictions or strongly held beliefs regarding the types of medical treatment they wish to receive or not receive. In Alan’s case, he might have expressly given permission in his Representative Agreement for Beth to give consent to enroll Alan in a medical study that might improve his condition.

There are legal duties imposed upon the agent of a Power of Attorney and the person designated to make health care decisions in a Representative Agreement, so it is important to get legal advice before taking on this role.

Note: The Power of Attorney Act will be amended and new Regulations added in September 2011, including duties that will be imposed upon the agent (attorney) to keep records and limits gifts, and provides for a test for capacity of the donor. The Representation Agreement Act will also be amended, also adding record-keeping requirements and documentation of decisions. A future blog post will address the changes in greater depth.

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837 West Hastings Street, Vancouver BC

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