Wife From Late Second Marriage Entitled to 36% Of Husband’s Estate

Miller v. Millir Estate 2011 BCSC 29

Audrey and Robert were married in 2005.  Robert had been married previously and had three adult sons.  Sadly, Robert died 4 years after the marriage.  He was 81.

Audrey, the Plaintiff, brought an application to vary Robert’s will under the Wills Variation Act.  According to the will, she was not to receive anything and she felt that Robert had not provided for her proper maintenance and support.  The estate was to be divided between two of his sons.  Robert's son, Rika, defended the action as executor of his father’s estate.

Audrey had received some assets outside of the will by way of survivorship.  These assets included bank and investment accounts, which had a value of ~$169,000 and they were part of an overall arrangement the couple had agreed to at the time. 

She sought to have 60% of the net proceeds of the matrimonial home go to her.

HELD:   the court awarded her a total of ~$75,000 from the net proceeds of the house in satisfaction of the legal and additional moral obligation that her late husband owed to her. 

The award was comprised of $54,000 from the estate to satisfy the legal obligation that he owed to her and $20,000 as an appropriate award for lump sum spousal support. 

The court applied family and divorce law principles in coming to their decision on what was adequate, just and equitable in the circumstances. 

In finding the value of $54,000 to satisfy the legal obligation, the court looked at the assets she received by right of survivorship, the economic circumstances and the fact that her husband had acquired his assets years before their marriage, and came to the conclusion that she would have been legally entitled to 30% of the total value of the estate.  Since the survivorship rights did not meet this value, the court aimed to award her the difference. 

In regard to support:  Given the relatively short length of the marriage, the role the plaintiff had in providing companionship and help to her husband, her age and financial circumstances, the court found that she would have been entitled to minimal compensatory, but primarily non-compensatory support (via the Divorce Act).  Finding that a lump sum was appropriate, the court felt that an amount of $20,000 from the sale of the house was adequate.

In addressing the additional moral obligation, which amounted to ~$21,000, the court took the following approach with the result being that the plaintiff received a total of $75,000 out of the sale of the home ($54,000 legal + $21,000 moral) – this, together with the survivorship assets of $169,000, being ~36% of the overall estate before death: 

MR. MILLER’S MORAL OBLIGATION TO THE PLAINTIFF

[54]           In Tataryn, McLachlin J. (as she then was), for the Court, described moral obligations as “society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards” (Tataryn, 821). She also adverts to the lack of a clear legal standard by which to judge moral duties and that “these obligations are admittedly more susceptible of being viewed differently by different people” (Tataryn, 822).

[55]           In identifying this potential difficulty, Tataryn discourages a polyvalent approach that takes into account the variable community standards that may be found within a society as diverse and multicultural as Canada. The court should not finely parse the expectations of individual communities within the larger community no matter how reasonable they may appear to members of the former.

[56]           Here, Mr. Miller clearly acknowledged by his words and conduct that he recognized his moral obligation to provide for the plaintiff. He apparently thought that he met his obligation in that regard by formulating his overall plan in 2008. The plan must, however, be reassessed in light of actual developments to the time of his death in 2009. Canadian contemporary society would expect no less than that he provide his wife with her lawful entitlement to share in a fair distribution of family assets and to receive a measure of additional support.

[57]           At the same time, Mr. Miller’s moral obligation was tempered by his acquiescence to the plaintiff’s decision to retain her own bank accounts and earnings for her own use. That ensured that she preserved, as a baseline, her economic position from before marriage and adequately reflected the fact that this was, for both, a “twilight” marriage.

[58]           By the terms of his will and accompanying declaration, Mr. Miller also acknowledged a moral obligation to his three adult sons. In spite of his antipathy towards one son who he felt had failed to maintain a relationship with both parents and his concern about another who had demonstrated financial irresponsibility, Mr. Miller still added a postscript to the effect that his executor might decide to share the residue of the estate with them. Rika Millir acknowledges that he accepts a moral obligation in that regard.

[59]           Counsel for the plaintiff contends that I should only consider the moral obligations that Mr. Miller owed to the plaintiff, on the one hand, and to Rika Millir, on the other, as the sole residual beneficiary and the only party to respond to the plaintiff’s claim. I disagree.

[60]           In spite of Mr. Miller’s unhappiness with the son who failed to maintain a relationship with the family and his concerns about the financial responsibility of the other, he obviously took them into account in deciding the size of the bequest to Rika Millir. That bequest amounted to passing on the whole of the interest in the former matrimonial home. It is commonly recognized in contemporary Canada that parents, where possible to do so, will pass on an interest in the family home. It would be artificial to entirely ignore the interest of the other two sons in weighing that consideration.

[61]           Finally, I take into account the need to respect Mr. Miller’s autonomy in making choices about the disposition of his estate. Overall, his approach was defensible but its adequacy must be reassessed based on the eventual size of the estate and consideration of the legal and moral obligations described above to ensure that the provision for the plaintiff was adequate, just and equitable in the circumstances.

[62]           A potential approach is as follows. After Mr. Miller’s death, the plaintiff received $169,000 and retained her own assets worth about $15,000. Without regard to any additional moral obligation, the legal obligation owed to the plaintiff totals $54,000.

[63]           In my view, a total payment of $75,000 out of the net sale proceeds of the house left in the estate would satisfy the legal and the additional moral obligation that Mr. Miller owed to the plaintiff. This would result in the plaintiff obtaining roughly 36% of the overall estate that Mr. Miller held immediately before he died. I consider such a result adequate, just and equitable in the circumstances.

[64]           While this result is less than the percentage that the plaintiff seeks, it is considerably more than the percentage that Rika Millir says represents the plaintiff’s maximum entitlement. In determining entitlement solely as a percentage of the net proceeds of the sale of the house, that is, the actual estate, as the plaintiff suggests, there is a risk of losing sight of the fact that the survivorship rights respecting the financial accounts solely benefited the plaintiff. It is necessary to consider the overall worth of Mr. Miller’s estate immediately before death to avoid distortion and ensure fairness. The 25% as proposed by the executor is, however, insufficient to meet Mr. Miller’s legal obligation to the plaintiff even without regard to his moral obligation.

[65]           In all the circumstances, I am persuaded to vary Mr. Miller’s will to provide for a payment to the plaintiff from the estate of $75,000. The balance held in the estate is sufficient to satisfy Mr. Miller’s moral obligation to his adult sons.

[66]           The payment of $75,000 to the plaintiff will be reduced by her proportionate 15% share (relative to the estate of about $511,000) of any additional expenses incurred by Mr. Miller’s estate that must be taken into account before final distribution. I exclude from the plaintiff’s share of expenses any portion of the expenses that the estate has incurred in defending the action.