Pre-nuptial agreement helps prevent wife from varying husband's will

Martinson v. Anniko, 2009 BCSC 1104

The plaintiff brought a claim under the WVA for variation of a will as she felt that her late husband had not made adequate, just, and equitable provision for her in his will.  His last will had been executed in 2005 and it made no provision for her benefit.  The couple did have a marriage agreement which outlined that neither would have a claim against the other’s property, but the plaintiff claimed the reasons for disinheritance were not valid and justifiable at the time of his death. 

The plaintiff and her late husband married in 1985 at the ripe age of 67.  It was the second marriage for each of them.  In the days leading up to their marriage, they executed a marriage agreement which detailed the following:

·         They agreed all assets acquired by each of them before the marriage or acquired thereafter, as well as proceeds thereof, should remain the property of the acquirer with no right to the other party.

·         The assets of either party were recorded and attached to the agreement.

·         The husband’s assets included specified real estate properties in Europe as well as inventories within the properties and all bank and other economic instruments.

·         The wife’s assets included real estate in Victoria, and all inventory there, as well as bank and other economic instruments.

The couple would later go on and execute further marriage agreements in 1986, 1988, and 1995.  The subsequent agreements confirmed the previous ones, but detailed in the final agreement that the matrimonial property in Victoria was to be held by them as joint tenants. 

Beginning in 1996 and leading up to 2005, the husband executed 3 wills.  Each of these wills included some provision for the plaintiff and/or her children from her first marriage.  The wills were accompanied by a written statement signed by the will-maker for the purpose of s. 2 of the WVA – giving reasons for any limited provisions that were made for the plaintiff.  In all of the wills, he left the residue of his estate to his nephew and his wife and children and it would only go to the plaintiff if they all predeceased him. 

The final will, which was made in 2005, specifically made no provision for the plaintiff or her children, but left $50,000 to the plaintiff’s granddaughter.  Again, the residue was to go to the nephew and his wife and children.  The written statement that accompanied the will provided reasons, which included that he had transferred to her as joint owner the Victoria matrimonial property, valued at ~$700,000, a bank account valued at ~ £40,000 and another with ~$20,000.  The plaintiff was also to receive investments and had also received $70,000 from funds held in his name. 

The plaintiff, 91 at trial, was in poor health and was living in an assisted living residence in Victoria and had expenses that exceeded her income.  She felt that due to the length of their marriage and that she had been caring for him as his health deteriorated, she was entitled to some provision in the will, specifically, the residue of the estate or at least her husband’s interest in the matrimonial home. 

Importantly, out of fear that her children would not get any inheritance from her if she predeceased her husband, the plaintiff severed the joint tenancy on the matrimonial home by transferring her joint interest into the joint names of two of her daughters and herself. 

HELD:  that the husband had met both his legal and moral obligations to his wife and an order varying the will would not be granted.  The husband had discharged his duty through the marriage agreement and his s. 2 reasons for the transfers.  He had given her a joint interest in their matrimonial home, which he had paid for himself, along with joint interests in bank accounts and investments.  The plaintiff chose to sever her joint tenancy, which her husband may not have been aware of, and this prevented herself from receiving his share upon his death.  Additionally, he did not hold her to the original marriage agreement.  

[49]           While the existence of a marriage agreement is not a complete answer to the testator’s moral obligations in his Will, it is a factor to consider on that claim (Steernberg v. Steernberg et al, 2006 BCSC 1672 (CanLII) and cases followed).

[50]           Here it is observed that the marriage agreement did change over time to give the plaintiff some rights to the deceased’s property.  While it started as an agreement that each party would keep all property that they acquired before and after marriage, and later added provisions that each release the other from any claims under the Family Relations Act and under the Wills Variation Act, eventually it evolved into an agreement that gave the plaintiff a joint interest in the family home funded solely by the deceased initially.

[51]           When the deceased made his first Will on February 19, 1996 he left the plaintiff personal, domestic and household articles belonging to him and cash of 300,000 Swedish crowns.  In his statement of reasons satisfying s. 2 of the Wills Variation Act accompanying this Will he pointed out that he had transferred to her a joint interest in the family property at Algoa Place which at that time he said was valued at $400,000, and a joint interest in his English bank account valued at $130,000.

[52]           In his next Will of June 15, 1999 he left a bequest to the plaintiff of the same benefits giving the same s. 2 reasons in a statement accompanying the Will, save that this time he valued the English bank account at approximately £40,000 and added a transfer of a joint bank account in Victoria valued at approximately $20,000.

[53]           In his following Will of October 5, 2001 he eliminated the bequests to the plaintiff of 300,000 Swedish crowns and gave cash bequests to her three children of $100,000 each, but only if he survived the plaintiff.

[54]           The plaintiff was given a contingent interest in the residue of the estate if all the persons in his nephew’s family that were named as residuary beneficiaries had all passed away prior to his death.

[55]           The s. 2 statement accompanying the Will gave as an additional reason beyond the previous reasons for eliminating the bequest to the plaintiff that she would also receive his share of the Scotia McLeod investments registered in their joint names and currently valued at that time at $160,000.

[56]           In the next Will of May 2, 2003 he repeated the conditional cash bequest of $100,000 to two of the plaintiff’s children but with respect to a third child set up a contingent $100,000 trust fund for her care, maintenance, education and benefit.  Again the plaintiff was only given a contingent interest in the residue of the estate if all persons in the nephew’s family had predeceased him.

[57]           His s. 2 statement of reasons remained the same.

[58]           In his final Will of July 8, 2005 he eliminated the bequest to the plaintiff of his personal possessions and eliminated all of the bequests to her children.  In this Will he left $50,000 to Nicola Bancroft and the residue to nephew Thomas and his family.

[59]           This time the s. 2 statement of reasons for making no provision for the plaintiff in the Will stated that the Algoa Place property in joint tenancy then had a current value of approximately $700,000 instead of as previously stated of $400,000.  He put the English bank account and the Victoria joint account at the same values as previously but increased the value of the Scotia McLeod investments from $160,000 to $205,000, and added as an additional reason a $70,000 recent gift to the plaintiff.

[60]           I have no evidence that the plaintiff was coerced into executing the marriage agreements.  It would not be unusual for the deceased at age 67 to want to preserve all the assets that he had accumulated over his lifetime before remarrying at that time of his life.

[61]           In terms of the deceased’s legal and moral obligations to the plaintiff in his final Will of July 8, 2005, I am satisfied that he met both those obligations through the marriage agreement and his s. 2 reasons given involving the transfers to the plaintiff.

[62]           The deceased did not hold the plaintiff to the original marriage agreement whereby she would receive nothing of his property.  He gave her a joint interest in the matrimonial home that he had paid for himself as well as a joint interest in his bank accounts and his share of the Scotia McLeod investments.

[63]           If the plaintiff had maintained her joint interest in the Algoa Place property, she would have received his joint interest automatically on his death.  However she became concerned about her daughters receiving no bequests from the deceased if she predeceased him, for which the deceased had no legal or moral responsibilities.  Accordingly she severed the joint tenancy leaving her in the position of not being entitled by law to his half interest upon his death.

[64]           The plaintiff now says she has assets of $334,000 from the sale of the home.  She says she has loaned some of these proceeds to two of her daughters but she does not say how much.  Presumably being loans she can recover these loans.  She also says she has another $96,000 total in a Manulife account and in a registered investment fund.

[65]           In my view these assets should be sufficient to sustain the plaintiff in a reasonable lifestyle hereafter.

[66]           In Kelly v. Baker (1996), 1996 CanLII 1596 (BC CA), 15 ETR (2d) 219 (BCCA), Mr. Justice Finch, as he then was, said that the reasons for disinheritance given by a testator do not have to be justifiable as they only have to be valid and rational reasons at the time of his death, valid in the sense of being based in fact and rational in the sense there is a logical connection between the reasons and the act of disinheritance.

[67]           The plaintiff claims that the deceased’s reasons for disinheritance were not valid and justifiable at the time of his death because she had severed the joint tenancy in the family home out of concern for her children and did not receive his joint interest on his death.  She says the Scotia McLeod account changed in 2005 as well for the same reason being a concern for her children and she and the deceased took their shares out.  She says she used her share to pay ongoing costs of caregivers and personal and household expenses but acknowledges she may have given some of it to her children, although she says she cannot remember the amount.

[68]           She also says the English bank account was closed in July 2007 when they each received their half interests and again she says with respect to her half interest she paid caregiver costs and personal and household expenses.

[69]           With respect to the $70,000 gifted to her she says she in turn gifted most of this money to her daughters.

[70]           It may be that all of the deceased’s reasons set out at the time of his July 8, 2005 Will were not valid at the time of his death on September 27, 2007 because some of the bequests had been paid out prior to his death, but I do not see why the plaintiff’s decisions to take her bequests out early should affect the validity of the deceased’s reasons as set out at the time of the Will.

[71]           There is no evidence before me that the deceased was ever made aware that the plaintiff had severed the joint tenancy on the family home in 2005.  He may have thought that the joint tenancy continued through to the time of his death and his interest would become available to the plaintiff on his death.

[72]           I accept that the plaintiff used some of these funds for caregivers and personal and household expenses, but it also appears that a lot of these monies went to her daughters.  That was her decision and in my view cannot result in any additional responsibility being imposed on the deceased.

[73]           I also recognize the plaintiff’s evidence that she was the deceased’s caregiver in the last few years of his life and that he was a difficult patient.  However, I continue to be satisfied that his gifts to her as evidenced by his statement attached to his final Will of July 8, 2005 were sufficient to satisfy all of his legal and moral responsibilities to the plaintiff at the time of his death.  Beyond that his testamentary autonomy should be given effect.