Estate planning can feel overwhelming, particularly when faced with important legal, financial, and personal decisions. Without clear guidance, it can be difficult to know where to begin or how to ensure everything has been properly addressed. Working with an experienced estate planning lawyer brings clarity and structure to the process, helping you make informed decisions with confidence.

The Role of a Will in Your Estate Plan

A will could be the foundation of your estate plan, as it can provide clear direction on how your affairs should be handled after your passing.

A properly prepared will can address a wide range of important matters, including the ability to:

• appoint an executor to manage your estate and carry out your instructions;
• clearly outline how your assets will be distributed and who will receive them;
• name a guardian for minor children; and
• incorporate planning strategies that may help minimize taxes and preserve more of your estate for your beneficiaries.

Without a will, you are considered to have died intestate, meaning your estate will be distributed according to provincial laws rather than your personal wishes. This can create uncertainty and lead to:

• delays;
• increase costs;
• disputes among family members; and
• a distribution of your estate contrary to your intentions.

Planning for Incapacity

Many people focus on what happens after death, but overlook what could happen during their lifetime. If you are unable to make decisions due to illness or injury, you will need a trusted representative to act on your behalf.

A Power of Attorney allows a trusted individual to manage your financial affairs, while a health care directive and representation agreement appoints a representative to make health care decisions on your behalf. Together, these documents allow you to appoint who can make decisions for you and how those decisions should be made. Without them, loved ones may need to go through a time‑consuming and costly court process to gain the authority to act.

Making Sure Your Assets Transfer Smoothly

How your assets are structured can significantly impact what your family ultimately receives from your estate. A well-planned estate ensures assets are transferred efficiently and with minimal complications.

Tools such as trusts can play an important role in managing how and when beneficiaries receive their inheritance. A trust allows you to set conditions around distributions, which can be particularly useful when planning for minor children, individuals who may need financial guidance, or situations where you want to protect your assets over time.

Other available estate planning tools, such as properly designated beneficiaries and revised ownership structures, can also impact how assets are held and then transferred to your beneficiaries. When all these elements are aligned, they not only simplify the process, but also help maximize the value of your estate, ensuring that more of what you have built is preserved and passed on to your intended beneficiaries.

Complex Situations and Avoiding Costly Mistakes

Estate planning becomes even more important when personal or financial circumstances are more complex. Without careful planning, these situations can lead to unintended outcomes, or prolonged disputes which can lead to significant legal costs to resolve.

Key considerations include:

• excluding or limiting the assets transferred to a child or spouse, in accordance with equitable considerations;
• planning for blended families or second marriages;
• providing for dependents with unique needs;
• preparing for business succession and coordinating existing legal agreements;
• eliminating or reducing taxes (capital gains tax, property transfer tax, probate tax; etc.);
• protecting your will from wills variations claims or court challenges to change your intended distribution; and
• ensuring the right individuals act as executor/trustee for your estate.

Working With the Right Estate Planning Team

Estate planning is a personal process. The right lawyer can help you make informed decisions by providing advice tailored to your goals, family dynamics, assets, and financial circumstances.

A thoughtful estate plan should work as a coordinated whole. With proper guidance, your plan can:

• protect your interests and preserve your assets;
• reduce avoidable tax liabilities and administrative complications;
• provide clear direction for your executors, trustees, and representatives; and
• support your loved ones with clarity, certainty, and care.

The result is a carefully structured plan that reflects your wishes, safeguards what you have built, and helps ensure your loved ones are provided for according to your intentions.

Contact us today to discuss your estate planning needs.

This article is intended for general information only and does not constitute legal advice.

Article by: Cindy Zheng and Jaskirat Purewal

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Intro

The recent Supreme Court of British Columbia decision provides clarification as to when the court will find a will is invalid. The case of Jung Estate v Jung Estate, 2022 BCSC 1298 (“Jung Estate”), involves an elderly mother who had close relationships with both of her adult sons. Justice Blake found the mother’s will to be invalid as a result of suspicious circumstances at the time the will was made, the mother’s lack of testamentary capacity and the mother’s lack of knowledge and approval of the contents of her will. The overarching issue in the case of Jung Estate, was whether an elderly mother’s will was valid (spoiler: it wasn’t).

Facts

Rose Jung (“Ms. Jung”), a widow, died at the age of 88 due to natural causes. Her surviving beneficiaries were her two sons, Jerry, age 67; and Steven, age 62. Steven passed away on January 6, 2021, so his wife, Wendy Lee (“Ms. Lee”) took over the claim as the executor of Steven’s estate.

The primary asset of Ms. Jung’s estate was her Vancouver home. Jerry moved into the Vancouver home shortly before Ms. Jung’s death and lived there until the trial. All witnesses described Ms. Jung as a passive and non-confrontational woman.

Ms. Jung had been diagnosed with dementia in April 2017.  She signed a will on July 17, 2017 (the “Will”), one month before she passed away on August 16, 2017. The Will left Ms. Jung’s Vancouver home to Jerry and the residue (the deceased’s leftover assets after the payment of debts and estate expenses) to Steven. The Will replaced Ms. Jung’s former will from 2001 that divided her estate equally to Jerry and Steven.

The signing of the Will met the formal requirements under the relevant statute for a Will to be formally valid (Wills, Estates and Succession Act, SBC 2009, c 13, at s. 37 (“WESA”)), those requirements being that the will is:

(a) in writing,
(b) signed at its end by the will-maker, or the signature at the end must be acknowledged by the will-maker as the will-maker’s signature, in the presence of 2 or more witnesses present at the same time, and
(c) signed by 2 or more of the witnesses in the presence of the will-maker.

Ms. Lee argues Ms. Jung’s Will should be invalid because:

• There were suspicious circumstances surrounding the Will’s creation and execution;
• Ms. Jung did not have the required testamentary capacity to make the Will;
• Ms. Jung did not know and appreciate the contents of the Will; and
• Ms. Jung was unduly influenced by her son, Jerry, in the making of the Will.

Jerry disputed these claims and asked for the Court to declare the Will valid.

Discussion

Credibility and Reliability

In the Court’s assessment of witness’ evidence, it must assess the credibility and reliability of such evidence. Credibility relates to honesty. In a credibility assessment, the Court will presume truthfulness. Reliability relates to accuracy. Factors to be considered when assessing credibility and reliability:

• the truthfulness of a witness’ testimony based upon the veracity or sincerity of a witness;
• the accuracy of the evidence;
• the ability and opportunity to observe events;
• the firmness of their memory, the ability to resist the influence of interest to modify their recollection;
• the unreasonableness, impossibility or unlikeliness of a witness’ testimony;
• the potential motive for a witness to lie;
• the witness’ demeanour; and
• the consistency of the evidence with the probabilities affecting the case as a whole and shown to be in existence at the time.
  
  Bradshaw v Stenner, 2010 BCSC 1398 at para 186, aff’d 2012 BCCA 296

The Court in Jung Estate found that Jerry’s evidence was largely unreliable and must be examined carefully. On the other hand, Ms. Lee’s and Steven’s evidence was found to be reliable and credible, which was in part due to their evidence being largely corroborated by contemporaneous emails.

Formal Validity

The first step in assessing circumstances surrounding the creation and execution of a will is to ensure the will meets the formal requirements in accordance with s. 37 of WESA, namely, that the will was signed by the testator in the presence of two witnesses, who also signed the will.The court found Ms. Jung’s Will was executed in accordance with the requirements of s. 37 of WESA and was therefore formally valid.

Suspicious Circumstances

When a will has been executed in accordance with the formal requirements, the person attempting to validate the will has the benefit of the presumption that the will-maker had the required knowledge and approval, and testamentary capacity to sign and execute the will (Vout v. Hay, 1995 CanLII 105 (SCC), at para 26 (“Vout”)). However, when suspicious circumstances are shown to be present, this presumption is spent. The standard of proof for establishing suspicious circumstances is that of a balance of probabilities. Suspicious circumstances must raise what has been described as a specific and focused suspicion, a general suspicion is not enough. Suspicions must be “well grounded” and will generally relate to circumstances:

(1) surrounding the preparation and execution of the will,
(2) calling into question the capacity of the will-maker, or
(3) tending to show that the free will of the will-maker was overborne by acts of coercion or fraud.
Leung v Chang, 2013 BCSC 976 at para 31, aff’d 2014 BCCA 28; and Vout at para 25.

The Court found the following suspicious circumstances surrounding the creation of Ms. Jung’s Will:

• Jerry signing Ms. Jung’s cheques;
• Steven searched through Ms. Jung’s closet for her purse and cheque book;
• Numerous arguments between Ms. Jung and her sons, and between the sons themselves;
• A report from a social worker reporting Ms. Jung may be financially manipulated by Jerry; and
• Jerry’s attempts to take Ms. Jung’s Power of Attorney that Steven held.

Testamentary Capacity

Testamentary capacity is a legal concept. It does not equate to mental capacity and cannot be granted merely by a medical assessment. Justice Blake restated the long-established test for testamentary capacity which requires the will-maker be sufficiently clear in their understanding and memory to know, on their own:

• the nature and extent of their property;
• the persons who are the natural objects of their bounty;
• the testamentary provisions they are making; and
• they must be capable of appreciating those factors in relation to each other and forming an orderly desire as to the disposition of their property
  
  See: Schwartz v. Schwartz (1970), 1970 CanLII 32 (ON CA); Banks v Goodfellow (1870); Vout; Laszlo v Lawton, 2013 BCSC 305 at para. 188; and Halliday v Halliday Estate, 2019 BCSC 554 at para. 26 (“Halliday”).

These are commonly referred to as the Banks v Goodfellow factors (dating back to the 19^th century). Determining whether a will-maker possessed testamentary capacity at the necessary times is a question of fact, to be determined from all of the circumstances. Mental capacity can fluctuate, what is important is that the will-maker had the necessary testamentary capacity at the relevant time, i.e. when providing instructions for the will or when signing the will. In assessing testamentary capacity, the evidence of the drafting solicitor, who took instructions and prepared the will, is often given considerable weight, particularly where that person is an experienced wills and estates lawyer (Benekritis v. Gilbert Estate, [1998] B.C.J. No. 171at paras. 41 – 43). Cognitive deterioration does not necessarily mean the will-maker is no longer capable of possessing testamentary capacity (Bull Estate v. Bull, 2015 BCSC 136 at para. 114).

Although there was strong evidence both for and against testamentary capacity, the Court held that Jerry had not proven, on a balance of probabilities, that Ms. Jung had testamentary capacity at the time she made the Will. The finding was largely due to Ms. Jung not having sufficient understanding of the value of her assets and the consequences of giving Jerry the Vancouver home and Steven the residue of the estate, which effectively disinherited Steven and left everything to Jerry. This distribution went against Ms. Jung’s wishes regarding the distribution of her estate at the time she provided instructions for the Will to the drafting lawyer, which was ¾ of the estate to Jerry and ¼ of the estate to Steven.  

Knowledge and Approval of Contents

If it is proven that the will-maker doesn’t have the required testamentary capacity to sign and execute the will, it is unnecessary to determine whether they knew and approved of the will’s contents.

However, knowledge and approval of the contents of a will is not the same as testamentary capacity. Testamentary capacity includes the ability to make choices, whereas knowledge and approval requires no more than the ability to understand and approve the choices that have already been made. Reasoning for the twin requirements of knowledge and approval, and testamentary capacity ensures that the will is the product of the conscious intention of a sound mind. Knowledge and approval is the “conscious intention” in that formula. The knowledge and approval requirement does require the will-maker to be aware of the magnitude of their estate and they must appreciate the effect of the disposition of their estate (Geluch v. Geluch Estate, 2019 BCSC 2203 at para. 127; citing Russell v. Fraser (1980), 1980 CanLII 737 (BC CA), 118 D.L.R. (3d) 733 (B.C.C.A.) at para. 12).

The Court held that Ms. Jung was not able to appreciate the impact of her gift of the Vancouver home to Jerry and the rest of her estate to Steven because it effectively left nothing to Steven, which went against her expressed wishes regarding the distribution of her estate.

Undue Influence

If it is found the will-maker lacks testamentary capacity to execute the will and the will-maker does not have the necessary knowledge and approval of its contents, it is unnecessary to determine whether there was undue influence.

However, Justice Blake held that to establish undue influence, the party claiming undue influence must claim that the will resulted from another person being in a position where the potential for dependence or domination of the will-maker was present, and that they used that position to unduly influence the will-maker to make the will. If they are able to establish that the other person was in a position where the potential for dependence or domination of the will-maker was present, then the party seeking to defend the will has the onus to establish that undue influence was not exercised over the will-maker with respect to the will. To give rise to the presumption of undue influence, it is sufficient to establish that the will-maker was reliant on a person, and that person exercised dominance over their will through persuasive influence (Halliday). If there is evidence that the will-maker was dependent, and that the person upon whom they were dependent exercised dominance, legal advice may not be sufficient to overcome concerns about undue influence (Kozak Estate (Re), 2018 ABQB 185 at para. 16).

Jerry was in a position where dependence or domination could have been present with Ms. Jung. Ms. Jung was passive, non-confrontational, dependent on her sons and susceptible to financial abuse by Jerry. However, Jerry arranged for Ms. Jung to meet with the Will drafting lawyer alone; respected the lawyer’s instructions, including that an independent medical assessment of Ms. Jung should occur, and that Jerry could not attend Ms. Jung’s medical appointment. The Court held that Jerry had proven that undue influence did not occur.

Key Takeaways

In Jung Estate, the Will was declared invalid on the grounds that Ms. Jung, the will-maker, lacked testamentary capacity and did not know of and approve of the contents of the Will. The Will was therefore found to be invalid and Ms. Jung’s estate was ordered to be distributed according to her 2001 will, meaning the estate was equally split between Jerry and Steven (not the ¾ to Jerry and ¼ to Steven instructions she gave the lawyer in 2017).

Jung Estate provides a thorough analysis of the law on how a court can find a will to be invalid. The factors that led to Justice Blake’s finding in this case were Ms. Jung’s passive and non-confrontational character, as well as her lack of understanding of the effect of her Will. The will-maker must understand the general nature of their assets when executing their will and Ms. Jung did not have this understanding.

If you require assistance with drafting or contesting a will, please contact McQuarrie and let us help.

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“People often say they have ‘peace of mind’ after they execute estate planning documents, but too often after a person passes away, we know that was a false sense of security,” explains Elyssa Lockhart, a partner at McQuarrie and an expert in corporate succession and wealth preservation. “If a Will is drafted based on your instructions, but without ample time spent discussing your assets and liabilities, shareholder agreements, family law agreements, and your broad intentions and objectives – your advisor won’t have enough information to determine whether your estate plan poses unanticipated risks.” These risks might include unnecessary tax consequences, increased likelihood of litigation, or even gifts going to the wrong beneficiaries.

Estate Planning and Wealth Management

You can’t take it with you, but how you choose to distribute it involves crucial decisions. Make sure that your bankers, investment planners, insurance and legal professionals are all willing to talk with one another. How an asset is acquired, held, reported for tax purposes, and designated to beneficiaries will impact your Will.

“I am often asked about the wisest way to transfer wealth,” Lockhart continues. “This depends on several factors, not the least of which include a variety of provincial and federal laws, the structure of assets at the moment, family composition, and of course – the intended outcome following death. The best guarantee of successful wealth transition is to have your advisors discuss your goals openly, cover areas of professional overlap and identify issues of field-specific concern before making recommendations from only one perspective.”

Don’t be Penny Wise and Pound Foolish

B.C. differs from other Canadian jurisdictions in how we are required to treat our spouses and children in the distribution of assets when we die. Lockhart has seen any number of inadvisable ‘self-help’ solutions to the perceived risk of a Will being modified in our Courts. Other self-help solutions stem from inaccurate beliefs about how assets are taxed when we die, or about who will receive assets if our primary beneficiary dies before we do. In most cases, these self-help solutions actually create considerable tax, asset transfer and registration, legal and accounting or even litigation fees after death – all easily avoidable if an experienced estate planning lawyer had been consulted at the start.

“When it comes to my clients and the assets they typically hold, we often include multiple wills,” says Lockhart. A Corporate Will allows for more privacy, offers cost savings in the administration process and most importantly, helps to speed the process and ensure continuous control over corporate assets. “We also see an increased call for alter ego trusts and mutual wills, setting out protections for all parties in a blended family by ensuring surviving spouses aren’t left without support, but don’t later disinherit children from a first marriage, either intentionally or inadvertently.”

“As planning advisors, we prefer to look at what a client has already structured and offer suggestions if we see room for improvement, based on their stated objectives. We don’t work transactionally, taking instructions without offering advice“, Lockhart confirms. Lockhart’s practice often involves a SWOT analysis (strengths, weaknesses, opportunities, threats). She points out that you don’t necessarily need to make big changes to your structure or your plan, but you should have true peace of mind.

Prior to the Covid-19 pandemic, Lockhart and her team were already conducting client interviews via secure video-conferencing. McQuarrie’s practice is B.C. based and their experienced legal team is able to work effectively with clients throughout the Province.

Don’t wait until it is too late. Speak to a trusted advisor at McQuarrie today.

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How Committeeship Works

There are two basic methods for conferring adult guardianship through the process of committeeship. In some cases, family members or loved ones can attend a court hearing in the British Columbia Supreme Court to apply for private committeeship under the provisions of the Patients Property Act.

If no-one is readily available to be appointed committee, the role can be assumed by the Public Guardian and Trustee under specific legislation and the Patient’s affairs will be administered in accordance with set guidelines.

Generally, the appointed committee will attend to the financial and legal affairs of the Patient under the annual supervision of the Public Guardian and Trustee and/or will make decisions related to the Patient’s care, living arrangements and healthcare.  In British Columbia, committeeship is considered a last resort for individuals who do not have a valid Power of Attorney or Representation Agreement in place, who cannot care for themselves or their affairs and who need a guardian to act on their behalf.

Who Needs Committeeship?

Individuals who have experienced diminished mental capabilities or who are incapacitated due to an accident or a medical condition may benefit from having their legal and personal matters handled by a committee.

For example, in the case of an elderly parent with dementia who requires more care than his or her child can reasonably provide, committeeship could allow access to the parent’s assets so that steps can be taken to find the most suitable accommodation and access the most appropriate care for the elderly parent. In this case, committeeship will give the child the resources and authority to take the necessary steps in keeping with the best interests of the elderly parent.

As an established law firm in British Columbia, McQuarrie Hunter LLP offers comprehensive legal services and representation for a wide range of areas including estates and trust disputes, as well as extensive expertise in estate planning and administration, real estate transactions, business and commercial litigation, insurance cases, personal injury, and family law. Our team can also handle appeals and deal with paperwork to make things easier for business owners and individuals alike.

For more information contact one of our Estate Litigation lawyers, or call 604.581.7001.

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Wealth is deeply personal, with estates that are big or small, simple or complex.  A well-documented estate plan provides comfort to you and your loved ones by ensuring that your estate will be distributed according to your wishes. Members of McQuarrie Hunter’s wills, estates and personal planning group will explore what’s needed to create estate plans, Wills and other related documents at the upcoming seminar on Tuesday, Sept. 15 at Semiahmoo Public Library in Surrey.  Seating for this free event is limited.  To register, please complete the registration form below or call 604.582.7001, or email register@mcquarrie.com.

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8:00am – 10:00am
Tuesday, April 5, 2016
Surrey Board of Trade Office
101, 14439 – 104 Avenue, Surrey
Google Map

In this presentation, McQuarrie Hunter lawyer Elyssa L. Lockhart will outline succession mechanisms to ensure the secure transfer of your corporate assets upon retirement or death, and provide tips on avoiding litigation and reducing probate fees.

If you are interested in attending this workshop, seating is limited.  You may register directly using the Surrey Board of Trade Events Calendar.  The cost is $25 plus tax for SBoT members or $35 plus tax for non-members.

If you are a current client of McQuarrie Hunter, we can provide you a complimentary registration, however you will need to contact your lawyer directly to let them know you would like to attend.

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