Wills Variation claim protected by legislation

Stevens v. Wood Estate (Re), 2013 BCSC 2380 

Donna Wood died in April of 2012 leaving her granddaughter, Lindy, as Executrix of her estate.  Within her will she left details that her estate was to be divided into four equal shares among one of her daughters, two granddaughters, and one daughter in trust.  She was a widow and had no spouse at the time of her death and left details as to why she had specifically disinherited her other daughters. 

Not long after being granted Letters Probate of the Will and Codicil, Lindy began to distribute the estate by giving $50,000 to two of the beneficiaries and herself along with a deposit of $52,000 in trust for the other daughter. 

Unfortunately, this distribution ran afoul of a provision within the Wills Variation Act that provides:

No distribution until 6 months after probate

12        (1)  Until 6 months have passed from the issue of probate of the will in British Columbia or the resealing in British Columbia of probate of the will, the executor or trustee must not distribute any portion of the estate to beneficiaries under the will except

(a)  with the consent of all persons who would be entitled to apply, or

(b)  if authorized by order of the court.

(2)  Until the period referred to in subsection (1) has passed, a title passing by devise to a beneficiary must not be registered in a land title office unless under a similar consent or order, except subject to the liability of being charged by an order made under this Act. 

 

Subsequently, Ms. Stevens, one of the disinherited daughters, brought an application under the Wills Variation Act to vary the will.

The court tackled how to issue a remedy for a breach of s.12 of the WVA, making a distribution prior to the six-month time limit and without consents or a court order, which had not previously been considered.  The court reiterated that the purpose of s.12 is to keep the estate intact to ensure that a successful plaintiff, bringing and application under the WVA, is able to recover. 

[29]  …“A breach of this statutory provision is a serious matter.  It goes to the heart of the legislative scheme.”

The court concluded that Lindy, the Executrix, must repay the estate or post the security in the amount that had been wrongly distributed ($202,000).  The case provides a necessary lesson for administrators, executors, and beneficiaries. 

[30]         Until the six-month limitation period has passed, a beneficiary’s entitlement to a share in the estate is not absolute. It is subject to variation if a successful action is brought under the WVA. Unless consents are obtained, the beneficiaries are not entitled to receive and benefit from their share of the estate until the WVA claims have been resolved or a court order has been obtained.

[31]         Similarly the plaintiff in a WVA action is entitled to have the assets in the estate preserved pending the outcome of their claim. They should not be put in the position of having to pursue after the executor or other beneficiaries to reap the benefits of a successful action.

[32]         Where there is a breach of the statutory provision and funds are distributed contrary to the legislation, the remedy of a claim against the executor or other beneficiaries, after the completion of the WVA action, does not sufficiently protect the successful WVA claimant. Those parties may, by then, be without assets or have taken steps that make it difficult to locate their assets.

[33]         It is the party who has breached the provisions of the statue who must make matters right. This application is not the forum to determine the strength or otherwise of a WVA claim. The WVA claimant is entitled to have the estate reconstituted to its state prior to the wrongful distribution.

[34]         I find that the appropriate remedy for a breach of s. 12 of the WVA is for the party who has breached the provisions to either repay the estate or to post security in the entire amount which has been wrongfully disbursed.

[35]         The Executrix in this matter must make matters right. She must, within 30 days of the date of these reasons, repay the estate or post security in the amount of $202,000, being the amount which she has improperly advanced to the beneficiaries. If the security is not posted within 30 days the plaintiff will be at liberty to seek further relief.