Disinherited children from first marriage awarded $150,000

Waldman v. Blumes, [2009] B.C.J. No. 1499

Action was brought against the estate of Dr. Blumes by his daughters from his first marriage after it was revealed that he had left his entire estate to his second wife, Esther.  Dr. Blumes had been married to his first wife for 48 years, until her death, and had two daughters from the marriage.  After her death, he married Esther, who was considerably younger than him (he being 70 and she 37).  The couple had two sons who were both minors at the time of his death.  Within his will, which he drafted during his second marriage, he named Esther as executor and the sole beneficiary.  None of his children were left any part of his estate and the court went into analysis and discussion on the legal and moral obligations which Dr. Blumes owed to his children and second wife. 

The court assessed the will and surrounding circumstances and found that his second wife, Esther, was owed a substantial legal obligation coupled to a strong moral obligation.  Their marriage was a lengthy one and she also helped provide management for their condo which they had utilized to produce an income.  It had been Dr. Blumes’ desire for the couple to have children as Esther was concerned about their age difference and the likelihood that she may need to raise the children as a single parent.  Dr. Blumes had assured her that their combined finances would be sufficient to support her after his death and it was upon this assurance that she did not pursue a full-time career in law and only continued to work part-time.  It had been the couple’s plan that the family assets would pass to her to support the family after his death and the court found that it would be wholly inequitable to deprive her of the estate which she relied upon to support herself and the children in the future.  As to the moral obligation, Esther had two children knowing that it was likely she would be widowed while their sons still required parental support.  Also, as his health began to deteriorate, Esther provided care for Dr. Blumes until his death.  The court found this established a strong moral obligation. 

The moral obligations owed to his daughters, Ms. Waldman and Ms. De La Ren, differed than that owed to Esther.  Dr. Blumes had been mindful of the Wills Variation Act and believed that his moral obligation to his daughters had been satisfied.  Dr. Blumes had helped pay for Ms. Waldman’s post-secondary education and helped both daughters purchase homes (though many years ago).  Neither daughter contributed to the acquisition of assets making up the estate, however, much of their father’s assets were accumulated during their mother’s lifetime.  It was also important that neither daughter received an inheritance upon their mother’s death as the entire estate passed to their father. 

The court reiterated that what is adequate, just and equitable must be judged by contemporary standards.  The court found that Dr. Blumes had not fulfilled his obligation to his daughters.  Though he had been generous in gifts to them many years ago, the size of the estate had appreciated considerably.  Taking into consideration the size of the estate, the previous gifts, the circumstances of the various beneficiaries, and the contribution their mother had made to the acquisition of the assets, the court concluded that the two daughters should have the will varied in their favour. 

As the estate was estimated at ~$1.2 million net, the court found it adequate, just and equitable to vary the will allowing for $75,000 to each of the daughters from the estate.  The amount reflected the moral obligations owed to the daughters as well as the obligations owed to Esther and the two sons, without interfering with testamentary autonomy more than the act required.

Legal Obligations

56     As stated earlier, Dr. Blumes had a legal obligation to his wife. The marriage was a lengthy one. It was also a marriage in which there was a substantial age difference. From the beginning of their relationship, Dr. Blumes encouraged Esther Blumes to work part-time. He was semi-retired in 1985 when they married, and retired fully in 1989. During the marriage, Esther Blumes continued to work part-time, and contributed to the ongoing expenses of the family and to the maintenance of Dr. Blumes' assets. She contributed to the maintenance and upkeep of both the matrimonial home and the apartment. She also cared for Dr. Blumes during his later years, keeping him at home until just before his death.

57     The evidence is that during their more than 20 year marriage Esther Blumes contributed to the apartment by managing and maintaining it, as well as providing funds to pay for the expenses associated with the apartment. At the time Esther Blumes and Dr. Blumes married, the management of the apartment was carried out by a manager who lived in the large ground floor of the apartment. Shortly after their marriage, Esther Blumes assumed primary management of the apartment, although she was under no obligation to do so.

58     Dr. Blumes allocated income in the amount of $12,000 a year for managing the apartment to Esther Blumes, which she and Dr. Blumes agreed would be used to pay expenses, including taxes, insurance, food, clothing and other household expenses. Throughout their marriage, the apartment was used as a joint asset and the income was used to support the family. When there were insufficient funds in the bank account for apartment-related expenses, either Dr. Blumes or Esther Blumes would deposit personal funds into the bank account to cover the expenses. The uncontradicted evidence of Esther Blumes is that the management fee paid to her was below market value for caretaking costs of a building of this condition, age and location.

59     Apparently, it was Dr. Blumes that wanted the couple to have children. The boys were born when he was 74 and 76. Esther Blumes was concerned about their age difference and how she would manage as a single parent when he died. In reliance on Dr. Blumes' assurances that their combined assets would be sufficient to support her after he died, Esther Blumes did not pursue law on a full-time basis during their relationship.

60     The evidence is that Esther Blumes inherited some monies from her father and mother when they died, which she has used for family purposes, including paying for their sons' Bar Mitzvahs and Dr. Blumes' income tax.

61     In reliance on their plans for all of the family assets to be passed to her upon Dr. Blumes' death, Esther Blumes did not pursue her practice as a lawyer on a full-time basis. Accordingly, it is my view, that Dr. Blumes had a legal obligation to Esther Blumes of the highest order.

62     Dr. Blumes also owed a legal obligation to his sons. They were both minors at the time of his death. As a result, he had a legal obligation to provide maintenance for them.

 

Moral obligations

63     In addition to his legal obligations, Dr. Blumes had a moral obligation to Esther Blumes. On his encouragement, she had two children with him knowing that it was likely that she would be widowed while their sons still required significant parental support.

64     Both Esther Blumes and Dr. Blumes regarded their estate as being there to provide for their old age. Given their plan for their family, it cannot be just and equitable to deprive her of the estate because he died first.

65     As well, Esther Blumes cared for Dr. Blumes as his health started to fail. In the circumstances, Dr. Blumes had a strong moral obligation to Esther Blumes.

66     Dr. Blumes also had a moral obligation to his sons. The moral obligation to minor children is higher than the moral obligation to independent adult children: L.A.C. (Guardian ad litem of) v. Koller Estate, 2004 BCSC 30 at paras. 63 and 64.

67     The moral obligation to Jacob and Jedidiah includes an obligation to provide financial assistance, to the extent appropriate in the context of the family's lifestyle and the size of the estate, during the period of time that they are pursuing their education and getting a start in life. Contemporary community standards mandate that a parent will endeavour with whatever means to give assistance to their children as young adults until they complete their education, even when the children are no longer minors: Handlen v. Handlen Estate, 2001 BCSC 1528 at para. 27.

68     The sons have years of post-secondary education ahead of them.

69     The evidence is that Dr. Blumes paid for Ms. Waldman's university education and gave both Ms. Waldman and Ms. De La Ren monies when they bought their homes.

70     Additionally, Jacob and Jedidiah assisted in the care giving to their father when he became more elderly. For example, they helped him with showers and cleaned up after him. In my view, Dr. Blumes did not discharge his legal and moral obligations to his sons by not providing for them in the will.

71     Dr. Blumes also had a moral obligation to his adult independent children. The claim of an adult independent child is always more tenuous than the claim of a spouse or a dependent child. Some of the factors to be considered when determining the moral obligations to an adult independent child are summarized in Clucas at para. 12:

  • 6. The moral claim of independent adult children is more tenuous than the moral claim of spouses or dependent adult children. But if the size of the estate permits, and in the absence of circumstances negating the existence of such an obligation, some provision for adult independent children should be made. (Tataryn, supra)

 

  • 7. Examples of circumstances which bring forth a moral duty on the part of a testator to recognize in his Will the claims of adult children are: a disability on the part of an adult child; an assured expectation on the part of an adult child, or an implied expectation on the part of an adult child, arising from the abundance of the estate or from the adult child's treatment during the testator's life time; the present financial circumstances of the child; the probable future difficulties of the child; the size of the estate and other legitimate claims. (Dalziel v. Bradford, supra [1985] B.C.J. No. 2754 and Price v. Lypchuk, supra

 

  • 8. Circumstances that will negate the moral obligation of a testatrix are "valid and rational" reasons for disinheritance. To constitute "valid and rational" reasons justifying disinheritance,the reason must be based on true facts and the reason must be logically connected to the act of disinheritance. (Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213 (B.C.C.A.); Comeau v. Mawer Estate, [1999] B.C.J. No. 26 (B.C.S.C.); and Kelly v. Baker (1996), 15 E.T.R. (2d) 219 (B.C.C.A.))

 

  • 9. Although a needs/maintenance test is no longer the sole factor governing such claims, a consideration of needs is still relevant. (Newstead v. Newstead (1996), 11 E.T.R. (2d) 236(B.C.S.C.))

72     In this case, neither Ms. Waldman nor Ms. De La Ren contributed to the acquisition of the assets making up the estate. However, as stated earlier, most of the assets were accumulated during their mother's lifetime. Neither daughter received any bequest in their mother's will, as Dr. Blumes was the sole beneficiary.

73     Dr. Blumes was of the view that he had satisfied any moral obligations to his adult independent children by providing them with support earlier in their life. Hartley Cramer, Dr. Blumes' lawyer, deposed that in March 2006, he talked to Dr. Blumes on the phone and met with him regarding his estate planning. Mr. Cramer deposes that Dr. Blumes was concerned that he wanted to protect the assets in his name for his current wife and minor children from the possibility of claim under the Act. Dr. Blumes told Mr. Cramer that he wanted to arrange his affairs to be able to provide for his minorchildren, Jacob and Jedidiah, after his death just as he had already provided for his adult children during his life. Mr. Cramer informed Dr. Blumes that he could set up an alter-ego trust, but Dr. Blumes instructed him not to proceed with such a trust because of the cost.

74     The evidence is that Dr. Blumes paid for Ms. Waldman's post-secondary education and gave her $25,000 towards the purchase of a house in 1986. Dr. Blumes gave Ms. De La Ren $16,000 towards the purchase of a house after her marriage ended in 1977. There was no evidence about the cost of the houses purchased by either Ms. Waldman or Ms. De La Ren, or what percentage of the price of the house was paid by their father.

75     Ms. De La Ren asserts that she has a claim based on need. However, she has not satisfied the onus on her to prove need based on the evidence. She has not provided her income tax returns, any specific evidence regarding the value of her property in San Diego, or evidence that the health issues she has disable her from working. In her affidavit, Ms. De La Ren does not set out her income from the various companies she has.

76     As well, her affidavit evidence regarding her financial situation did not accord with the documents. In her affidavit, Ms. De La Ren deposes that after her marriage break down, she received part of the equity in the matrimonial home, which was not significant, and child support until her daughter turned 18. However, the separation agreement between Ms. De La Ren and her former husband set out that she was to receive spousal support as well as child support until the children reached 21 or completed full-time education, and the matrimonial home was to be transferred solely to her. As well, a vacant property that was in joint tenancy was to be transferred to tenancy in common and Ms. De La Ren was to receive a lump sum payment.

77     Although Dr. Blumes was of the view that the monies he paid to his daughters discharged his moral obligations, what is adequate, just and equitable in the circumstances must be judged by contemporary standards. There is no doubt that the gifts were generous at the time they were made, however, the assets comprising the estate have appreciated considerably since the time the gifts were made. Having considered the size of the estate, the amount of Dr. Blumes' earlier gifts to his daughters, the circumstances of the various beneficiaries and, in particular, the contribution Beverly Blumes made to the acquisition of the assets that make up the estate, I have concluded that some provision for Ms. Waldman and Ms. De La Ren should have been made in the will.

78     As indicated earlier, the most significant obligation Dr. Blumes had was to his wife, followed by his dependent sons. Dr. Blumes had both legal and moral obligations to his wife and his dependent sons.

79     In all of the circumstances of this case, it is my opinion that it is adequate, just and reasonable for Ms. Waldman and Ms. De La Ren to receive a fixed sum in the amount of $75,000 each from the estate. This variation, in my view, properly addresses Dr. Blumes' moral obligations to Ms. Waldman and Ms. De La Ren, and his legal and moral obligations to his wife and two dependent sons, without interfering with Dr. Blumes' testamentary autonomy more than the Act requires.