Family Tensions - Disinherited Wife Awarded 50% Interest in Property and Lump Sum

Anderson v. Anderson Estate 2016 BCSC 13

The recent decision of Anderson v. Anderson Estate is an example of the tension that often exists with families at the time of a death.  Earle Lloyd Anderson died December 6, 2012 only one week short of his 88th birthday.  The Plaintiff, Mrs. Anderson, was Earle’s second wife and they had been married in 1992.  Mrs. Anderson brought an application to vary the will of her husband as she had only been left the ability to remain in their matrimonial home (on conditions) and receive a modest income from the residue of the estate (on similar conditions).  The Defendants, Earle’s children from a previous marriage, opposed the application and held the opinion that their father and Mrs. Anderson were separated after his hospitalization before death in 2012 and was not entitled to anything further. 

At the time of his death, Earle’s estate consisted of a house in Kamloops valued $355,000, investment assets worth $192,483.30, and other assets totalling $184,654.40 consisting of life insurance benefits, a TFSA and a RRIF passed outside the estate by way of beneficiary designations. 

The Will detailed that Mrs. Anderson was to enjoy the use and occupation of the house for her life on conditions (that she remained unmarried and not living in a marriage like relationship) and to receive income of the residue of the estate for life on similar conditions.  In the event these conditions were not met or Mrs. Anderson chose not to live in the home, the Trustee was to sell the property and the proceeds of sale would fall to the residue producing income to Mrs. Anderson for life while unmarried, or purchase a more suitable property of equal or lesser value.  Upon Mrs. Anderson’s death or remarriage or upon her entering a marriage like relationship, the estate was to be divided into 5 equal shares, one share for each living child and the share of the deceased child being divided equally between his or her living children. 

Unfortunately, Mrs. Anderson and the four living children have never been close.  Tension in the family only increased when Earle was hospitalized for 2 weeks in March of 2012 due to failing health.  Mrs. Anderson felt unwanted and mistrusted and the presence of his family played a role in her attendance, or lack thereof, while Mr. Anderson was in hospital.  Mrs. Anderson basically stepped away and let his adult children take on the responsibility of his care.  The apparent lack of wifely devotion following his hospitalization became a significant concern for not only Earle, but also his children.  Although the couple seemed to have a happy marriage prior to March of 2012, Mrs. Anderson initiated a separation later that year and relieved herself of further caring for him in his poor health.  Mrs. Anderson and the deceased were, in effect, separated after his hospitalization.  

Decision:

Legal Obligations:

The judge found that Mrs. Anderson was legally entitled to one half of the estate, valued $362,702.85, in respect of the division of family assets.  In regard to Spousal Support, the judge found entitlement and reference to the Spousal Support Advisory Guidelines – with a midpoint of $6,926.64 annually.  This, as a lump sum, would be assessed at $30,000.

The total of the property and spousal support results in a notional legal claim of $211,351. 

Moral Obligations:

The judge applied principles from Tataryn and Picketts v. Hall in applying the law. 

The judge found the will did not make adequate, just or equitable provision for Mrs. Anderson.

Mr. Anderson did not owe any legal obligations to the Defendants and his will substantially prefers the moral claims of the Defendants over both the legal and moral claim of the Plaintiff even though part of their moral claim has been satisfied by the distribution to them of assets worth ~$184,000 outside the estate. 

Notwithstanding her questionable behaviour in the year leading up to his death in 2012, Mrs. Anderson still qualifies as a “long-term, caring and dedicated spouse”.  Mr. Anderson owed legal and moral obligations to Mrs. Anderson and they should not be subordinated by the moral claims of the independent children.

The judge did mention what was being claimed by the Plaintiff was more than required to provide adequately, justly and equitably for her and it would interfere with the testamentary autonomy of Mr. Anderson.  The judge awarded an undivided 50% interest in the property and additionally a sum of $90,000 with the remainder of the estate going to Mr. Anderson’s children per stirpes as provided in the will. 

The Deceased’s Moral Obligations

[43]        The Tataryn case recognized that the determination of moral duties is an uncertain business because there are no clear legal standards by which to judge moral duties. However, the court ranked Mrs. Tataryn’s moral claim as one of “a high order on the facts of this case”, and of two grown and independent sons, the court said “The moral claims of the sons cannot be put very high. There is no evidence that either contributed much to the estate.”

[44]        The facts in the Tataryn case are very different from the present case because the Tataryn marriage was one of 43 years and there was no issue of competing moral duties to a spouse and children of a previous marriage. That issue was, however, dealt with in Picketts v. Hall, 2009 BCCA 329 (CanLII), cited by the plaintiff for a number of propositions, despite the very obvious distinction that Picketts involved an estate worth $18,000,000.

[45]        The plaintiff in Picketts was a common-law spouse of 21 years standing with very modest personal means at the time their relationship started and at the time of Mr. Hall’s death. Mr. Hall’s will left her their matrimonial home condominium, $2,000 per month for life, and three months use of a Hawaiian condominium. The balance of the estate went to two independent adult sons. The trial judge varied the will on a maintenance based approach to provide for $175,000 per year maintenance, a lump sum to renovate the condo and to set aside a fund for her potential nursing care. The Court of Appeal varied the will further to provide for a lump sum of $5 million, plus the family home, the personal and household effects and an amount in lieu of the time in the Hawaiian condo.

[46]        The plaintiff relies on portions of the following paragraphs from Picketts:

[62]      It seems to me that it is also not a viable option for the court to approve a disposition that substantially prefers the moral claims of adult independent children to those of a long-term, caring and dedicated spouse.

[63]      In assessing the substantial moral obligation of the testator toward his spouse in this case (in addition to the substantial legal obligation), I take into account the following:

(1)        the absence of a legal obligation of Mr. Hall to either of his sons;

(2)        the length of the marital relationship between Mr. Hall and Ms. Picketts - 21 years;

(3)        the agreement of Ms. Picketts to give up her career thereby depriving her of the opportunity to accumulate an estate of her own other than through modest inheritances from her father and her brother;

(4)        the necessity for Ms. Picketts to dip into her limited savings to supplement the living expenses Mr. Hall had agreed to provide;

(5)        the lengthy period of loving and effective care Ms. Picketts provided to her spouse during his decline;

(6)        the promise Mr. Hall made that he would take care of Ms. Picketts as though she were his wife;

(7)        the size and liquidity of the estate.

[64]      I do not see Mr. Hall's promise mentioned in item (6) as being limited to the provision of maintenance. The promise has to be considered in the context in which it was made. It was given upon Mr. Hall reneging on an accepted marriage proposal that he had announced socially and which he had confirmed with a ring. I have no doubt that the friends who were witness to both promises would have expected the latter to have been kept by a bequest of capital from his estate. Although the residual promise is not actionable per se, I see it as a significant factor in consideration of the moral obligation toward Ms. Picketts that arose in this case.

[65]      Ms. Picketts is entitled to administer her own financial affairs without being dependant on the estate. She is also entitled to a measure of testamentary autonomy of her own so that she can pass her own estate to whomever she wishes.

[66]      In all the circumstances of this case, it is my opinion that it is adequate, just and equitable for Ms. Picketts to receive from the estate a lump sum payment of $5M plus the family home, the personal and household effects, and the settled amount for the Hawaii condominium. This variation of the will would properly address Mr. Hall's legal obligation to Ms. Picketts, and his moral obligations to her and to his two sons, without interfering with his testamentary autonomy more than the Act requires.

[47]        The plaintiff argues that most of the same considerations apply in this case and the most important factor strengthening the moral obligation of the deceased to her is the years of caregiving she provided. She specifically refers to three separate periods, being his recovery from the ditch incident in 1996, his recovery from his 2003 heart attack and the period between his 2003 heart attack and his hospitalization in March 2012. The defendants are somewhat dismissive of this argument stating that she has “overemphasized” her caregiving role which was not extraordinary and did not amount to “years”.

[48]        In light of the obvious long-standing dislike of the plaintiff on the part of the defendants and the mutual mistrust between them, I have had to consider much criticism of one party by the other as being subjective rather than objectively reliable. The plaintiff suggests that the defendants interpreted her behaviour in the spring of 2012 in the most negative way possible out of their dislike for her. I have considered that to be a factor in play and I also believe one or more of the defendants probably bear some of the blame for Mrs. Anderson’s self-exclusion from the hospital and care facility while Mr. Anderson was there, which was due in large measure to the animus built up over the years.

[49]        At the end of the day, it is reasonable to conclude that Mr. Anderson would have been hurt and dismayed by her non-attendance and declination to participate in his subsequent care, as well as her lawyer’s letter seeking some security of interest in their matrimonial home. This would obviously have influenced his decision to change the designated beneficiaries on the life insurance and TFSA assets which he had re-designated to Mrs. Anderson in 2011, presumably in recognition of his moral obligations to her future maintenance.

[50]        The plaintiff points out that while the defendants argue that the deceased’s moral obligation to them was strengthened by their actions in caring for him in the spring, summer and fall of 2012, they in fact arranged for Mr. Coles to charge the deceased $100 per day for his care. The plaintiff says this weakens the effect of their care in 2012 as giving rise to greater moral claim, and also illustrates the value of prior care given to Mr. Anderson. There is some merit to the latter argument, but obviously the level of care required in his last 10 months of life was higher than any needed previously.

[51]        There is no doubt that Mrs. Anderson did give up the last few years of her cooking career, and it is a factor worthy of consideration. Even though she did, as argued by the defendants, enjoy an increased standard of living by joining Mr. Anderson, she probably would have otherwise accumulated some savings as she approached retirement.

[52]        By her uncontradicted evidence, Mrs. Anderson did contribute financially to the household expenses and this, together with providing care which might otherwise have to be paid for, did help to reduce the drain on Mr. Anderson’s finances and preserve his estate.

[53]        Mr. Anderson did not owe any legal obligation to the defendants. His Will does substantially prefer the moral claims of the defendants over both the legal claims and the moral claim of the plaintiff, even though part of their moral claim has been satisfied by the distribution to them of assets worth $184,654 outside the estate.

[54]        Notwithstanding her questionable behaviour in the spring and summer of 2012, Mrs. Anderson still qualifies in my opinion as a “long-term, caring and dedicated spouse”, whose moral claims should not be subordinated to the moral claims of independent adult children. While the qualified life interest that Mr. Anderson provided her does have some contingent value, there was no evidence provided as to what that value might be. I am confident that it falls well short of even the notional legal claim I have valued at $211,351. The income on the investment assets is presently in the range of $1,800 per year, which is a very insignificant benefit to Mrs. Anderson presently and that fund has already diminished by approximately $11,000 since Mr. Anderson’s death and is subject to further erosion for house maintenance expenses.

[55]        The defendants have referred me to the case of McHale v. McHale Estate, 2015 BCSC 993 (CanLII), per Harris J., which, as counsel says, has some striking similarities to this case. In McHale, after a 25-year marriage, the testator’s will made a $30,000 bequest to his wife and left the remainder of his estate ($850.000 after expenses) to his two children of a previous marriage. The matrimonial home comprised $675,000 or $634,000 of the estate value, depending on whether the declared value or assessed value is used. A marriage agreement excluded the widow from an interest in the matrimonial home. She sought to set aside the marriage agreement and a variation of the will to provide her with fee simple to the home and 50% of the remainder of the estate. Harris J. found that the claim was beyond what would be adequate, just and equitable when considered in the context of the expressed intention of the testator and the competing moral claims of the defendants. The court awarded an amount equal to a 50% interest in the proceeds of sale of the matrimonial home, less $30,000.

[56]        Defendants’ counsel suggests this award amounted to approximately 32% of the value of the estate using the gross value of $909,582 and the lower assessed value for the property. (It is not clear that is the correct view, and it may have been 36%, although nothing turns on that difference).

[57]        A significant distinction between the McHale case and the present case is the receipt by the defendants of the outside -of-estate assets in at least partial satisfaction of their moral claims.

Conclusion

[58]        In my view, it is contrary to contemporary moral standards that a long-term, caring and dedicated spouse with a notional legal claim to equal division of family assets should be limited to a qualified life interest, with the entire estate going on her death to the testator’s independent adult children. In all the circumstances, I am of the opinion that the Will does not make adequate provision for the plaintiff, and should be varied.

[59]        In my view, the specific relief sought by the plaintiff is more than is required to provide adequately, justly and equitably for her, and would unduly interfere with Mr. Anderson’s testamentary autonomy, and the defendants’ moral claims. Exercising the discretion granted by the Act, I would vary the Will to provide the plaintiff with an undivided 50% interest in the property located at 1180 7th Avenue, Kamloops, B.C., and, additionally, the sum of $90,000. The remainder of the estate shall go to Mr. Anderson’s children per stirpes as he provided. The provisions of the Will regarding taxes, insurances and other expenses are abrogated and these expenses shall be borne in proportion to ownership interest in the property.