Consideration of Pre-Death Gifts to a Beneficiary

It is well settled that the Courts will consider assets passing outside of a Will when determining the distribution of assets

For any will variation claims under WESA, the Court is only permitted to provide potential claimants with assets that pass according to the Deceased’s will (known as the “estate assets”). When assessing whether a will-maker has made adequate provision for the proper maintenance and support of his/her spouse and/or children, the Court will initially look to the provisions under the Will. However, there may have been numerous other benefits to the claimants throughout their lifetimes, for instance, tuition payments or loans. Furthermore, there may also be assets that pass to the claimants outside of the estate such as assets held in joint tenancy, life insurance payments or benefits under a pension plan.

It is important to note that any assets such as these that pass outside of the will cannot be reallocated by the court under WESA. In many cases, these benefits or assets passing outside of the estate may comprise a greater amount than those passing under the will. These situations can arise out of deliberate estate planning to minimize fees or challenges to a will, or sometimes they may result out of an unplanned event such as death benefits payable under an insurance policy after an accidental death.

Although the Courts cannot redistribute these types of assets under WESA, they will certainly take these benefits into account when deciding whether there has been an “adequate, just and equitable” provision for a claimant. The Court will take a broad view of the lifetime gifts from the Deceased along with the value of all the assets arising as a result of the Deceased’s death. This principle was adopted by the court in Ryan v Delahaye Estate 2003 BCSC 1081 where the judge made clear that the court will consider these assets when determining whether a parent met his/her moral obligations to the adult children. In Ryan, the Court decided to vary a will to give the daughter an equal share of the residue of the estate because the Deceased parents had paid for the son’s education and provided loans to him, whereas the daughter had not received similar gifts. The original 80/20 split of the estate in favour of the son was deemed inequitable as it did not provide adequately for the daughter.

To summarize, it is well settled that the Courts will consider assets passing outside of a Will when determining to what extent, if any, the distribution of assets passing under a Will should be varied. Having said this, the Court retains wide discretion as to what effect gifts outside of the will should have. For example, if one child has received $50,000 towards tuition payments outside of the estate, it does not necessarily mean that his or her share of the estate will be reduced by that exact amount.

Obligation to Adult Children To Provide Under a B.C. Will