Claims Against Estates by Family Members

One intent behind the preparation of a will should be to ease the administration of your estate.  Your solicitor should have a clear understanding of your obligations because in addition to creditors for debts of the deceased and the estate, family members may have an enforceable right to make a claim against an estate.  Where such obligations are not considered when drafting your will with your solicitor, you may leave behind more chaos than intended.

As accountants and tax experts, Shajani is well positioned to articulate and advise on the financial aspects of your estate, which is an important precursor to discussions with your solicitor in determining the potential claims by family members against your estate.  Shajani is also able to strategize and devise plans to pass your assets outside of the estate where such a strategy may be warranted.

Family law

A spouse has rights to the division of property and rights to the matrimonial home during their lifetime in addition to the potential claim against the estate of the deceased spouse.  Any property used as a residence, including recreational property may be subject to special rights that attach to matrimonial home or homestead.   However, in Alberta, the surviving spouse may only make a claim if the spouse was entitled to make the claim before the date of death.  Generally, this requires that the spouses be separated or divorced.  Property included are all assets acquired during the marriage.  Property excluded are gifts or inheritance, and property acquired before the marriage – these assets should be maintained separate from other property, or this protection could be lost.

A marriage contract or pre-nuptial agreement can minimize the impact of this claim.

An inter vivos trust may also be effective in sheltering assets from a claim.

Dependent relief legislation

A spouse and dependent child (and certain other family members) have rights to support that are enforceable during their lifetime or on death.  There is a three-step test to qualify for this support.

• Does the person making a claim qualify as a dependent?

A spouse, common-law/adult interdependent partner (with 3 years or more of cohabitation), minor child, adult child 18-22 who is also a full-time student, or an adult child with physical or mental disability would be considered dependents.

• Was adequate provision made in the will of the deceased or was an adequate intestate distribution made?

This could be a long contestable list of considerations.  Some of these include the needs and standard of living of the dependent, obligations of the deceased to others, relationship, and its duration, reasons the dependent was not provided for in the will, needs of other persons, size, and nature of the estate, conduct of the applicant, any agreements such as a prenuptial, other support received by the dependent, financial contributions made by the dependent to the estate and the intent of the testator.

• What form of relief and what amount of relief is appropriate?

The consideration of legal and moral obligations will also be considered.  The case of Tataryn v. Tataryn Estate necessitated that what is adequate, just, and equitable must be viewed in the light of current societal norms.  As such, moral obligations permit the courts to require a redistribution of the testator’s estate even where the need is not established.  As such, need is no longer a dominating criterion.

The case of Tataryn v. Tataryn Estate is a pivotal decision in Canadian estate law, particularly concerning the interpretation and application of wills and testamentary freedom under the British Columbia Wills Variation Act (now replaced by the Wills, Estates and Succession Act). The case was decided by the Supreme Court of Canada in 1994 and set important precedents regarding the obligations of a testator and the rights of dependents.

Case Background

The case involved the estate of Stephen Tataryn, who died in 1992. He left a will that provided the majority of his estate to his wife, Mary Tataryn, and made modest provisions for his two sons, John and Stefan Tataryn. Both sons contested the will, arguing that their father’s allocation did not adequately reflect their moral and legal claims to the estate, particularly considering their long-term dependency and contributions to the family’s welfare.

Legal Issue

The legal issues at stake were primarily concerned with the interpretation of the Wills Variation Act, which allowed the court to modify a will if it felt that it did not make adequate provision for the proper maintenance and support of the testator’s spouse and children. The key question was how to balance the testator’s freedom to distribute his estate according to his wishes with the need to provide adequately for dependents.

Judgment and Rationale

The Supreme Court of Canada, in its judgment, highlighted that the interpretation of what is “adequate, just, and equitable” in terms of provision for dependents should reflect current societal norms. The court noted that these norms now include not only legal obligations but also moral obligations that society generally expects individuals to meet regarding their spouses and children.

Justice McLachlin (as she then was) wrote for the court that the will must be examined not only for legal obligations but also for moral claims, particularly when those claims do not conflict with legal ones. Importantly, the court found that a testator’s freedom could be limited by these obligations, meaning that need is not necessarily the dominating criterion for varying a will.

Implications

The decision in Tataryn v. Tataryn Estate broadened the scope of considerations that courts must weigh when determining whether a will meets the standard of “adequate, just, and equitable” provision for dependents. The ruling affirms that moral obligations can provide a basis for redistributing a deceased’s estate, even in cases where dependents are not in financial need. This approach places significant weight on the reasonable expectations of dependents based on societal standards, potentially leading to more frequent court interventions in the contents of wills.

Conclusion

The Tataryn v. Tataryn Estate decision remains a seminal case in Canadian jurisprudence on wills and estates. It reflects a shift towards recognizing moral duties as nearly coequal with legal duties in estate distribution, emphasizing the dynamic nature of law in adapting to changing societal values and expectations. This case has influenced how estates are handled in Canada, particularly in providing courts with the authority to ensure that will provisions are fair and reflect both the moral and legal duties of the testator.  Legal and moral obligations should therefore be considered in your estate plan.  Shajani is well-positioned to assist in discussions with your solicitor so that your will and estate plan appropriately reflect your obligations and wishes.

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2024 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning service.