Lover Receives Interim Distribution of $250,000 From $2.5 Million Estate

Davis v. Burns Estate, 2016 BCSC 1982

Upon the death of Patricia Burns, a number of legal issues arose relating to her sizable estate valued $2,569,807.61.   Her daughter, Leslie Davis, brought an action under s. 60 of WESA alleging that her mother’s will did not make adequate provision for her, the only child.  Additionally, Brent Dale brought an application under WESA for the payment of an interim distribution of $250,000 from the estate as he was a beneficiary under the will.  The largest asset of the estate had been a house located in Vancouver and was sold in February of 2016.  Patricia had left two wills:  one that was dated October 2010 and another from 2005.

The 2005 will had made certain specific bequests of personal and household effect to her daughter, Leslie, and to her granddaughter, and divided the remaining residue of her estate to George (80%) and the final 20% to two friends.  In this will, she had excluded Leslie from further sharing in the estate and included the opinion that she had provided amply for Leslie, to the extent that she deserved, and that she was not disposed to provide for her any further. 

Brent, the applicant for the interim distribution, was the common-law spouse of Patricia for approximately 5 years up until her death.  Brent and Patricia had commenced living together in 2010 after Patricia had asked him to move into the house.  Notably, Brent’s sole source of income was from his CPP Old Age Security ($1500/month) and his monthly expenses exceeded his income. 

Brent and Patricia had a lengthy background in which they had known each other since 1967.  Brent had been close with Patricia and her late husband.  The pair became closer after her husband’s death. 

Brent mentioned that, when they began living together, they pooled their income, slept together and generally lived in a spousal relationship.  Brent mentioned his income went toward paying for groceries, house utilities, and veterinarian bills for Patricia’s dog, which he has continued to look after, and for travelling with Patricia. 

Brent deposed that around the time of the execution of the 2010 will, Patricia had informed him there would be changes to the will and he would be left with 20% of the house and “that should be enough for him to have fun if she passed away.”

George, a friend of Patricia and her late husband for 30 years, objected to the distribution.  George was of the opinion that Brent had not come up in his discussion with Patricia and her late husband and had only been a marihuana supplier for Patricia.  George noted Brent was merely a roommate of Patricia’s and not a spouse, as he alleges.  George took the position that he does not consent to the distribution “unless George can also receive an interim distribution equivalent to 50% of his 80% interest in the residue”. 

DECISION:

The court applied the factors set out in Hecht and allowed the interim distribution.

The court noted both Brent and George have claims against the estate as both were named in the 2010 will.  Brent demonstrated a need for money as his income exceeded his expenses and the wishes of Patricia, that he enjoy the ability to travel and his remaining years, are unfulfilled due to the estate conflict and Leslie’s outstanding lawsuit.

Although George may be correct and is entitled to or ought to be granted an interim distribution, he did not bring a separate application for such distribution by which the court could judge whether or not he meets the factors set out in Hecht.  The court declined to entertain such request without a formal application.

As there was some delay in Leslie’s claim and the outstanding litigation had resulted in no distribution being made from the estate, coupled to the fact there was frustration in fulfilling the deceased’s wishes in her 2010 will, the court found it would be equitable to grant Brent’s application.  It was found there was no prejudice to either George, who is able to bring his own application for distribution, or Leslie, who is still able to pursue her claim against the residue of the estate. 

Discussion of the Legal Principle to be Applied

[31]         In Hecht v. Hecht Estate (1991), 62 B.C.L.R. (2d) 145 (C.A.) at paras. 42- 46 the Court of Appeal set out a number of the factors the court was to consider when deciding whether to exercise its discretion to grant leave to the executors to make an interim distribution when Wills Variation Act proceedings have been commenced. The Wills Variation Act, R.S.B.C. 1996, c. 490, was repealed and replaced by the Act under which proceedings have been commenced by Leslie. Those factors included:

a.     the amount of the benefits sought to be distributed as compared to the value of the estate;

b.     the claim of the beneficiaries on the testator;

c.     the need of beneficiaries for money; and

d.     the consent of the residuary beneficiary to the proposed transfer.

See also Henney v. Sander, 2014 BCSC 889 at para. 38.

Application of the Legal Principles and Decision

[32]         The current residual value of the estate, after sale of the house, is $2,569,804.61. Brent seeks a distribution of $250,000. Patricia’s estate would conservatively be valued at $2,300,000 after expenses assuming the litigation proceeded. Brent’s share in the residue of the estate would amount to $460,000, assuming Leslie is not successful.

[33]         If Leslie is successful I do not think she would be awarded an interest in excess of 50% of the residual value of the estate, given the expressed intentions of Patricia in the 2006 letter and in her two wills. I emphasize however that I make no findings whatsoever concerning the entitlement Leslie may or may not have to share in Patricia’s estate. This entitlement is a matter solely reserved to the trial judge. I must apply the factors set out earlier in Hecht.

[34]         Clearly both Brent and George have claims on Patricia’s estate as both are named in her 2010 Will. George is granted an 80% share of the residue of the estate in both her 2005 and 2010 Will. Patricia’s reasons for granting him this portion of her estate are set out in her 2006 letter as noted above.

[35]         Brent has need for money as his income does not cover his expenses and the wishes of Patricia that he enjoy the ability to travel and enjoy his remaining years are unfulfilled because the affairs of the estate have not been able to be wound up as Leslie’s lawsuit remains outstanding.

[36]         The remaining beneficiaries, George and Leslie, do not consent to an interim distribution being made to Brent unless a similar interim distribution is made to them. While George may be entitled to and ought to be granted an interim distribution, he has not brought a separate application for such interim distribution by which the court can judge whether or not he meets the factors set out in Hecht. Accordingly, I am not prepared to order an interim distribution be made to George without such application being before me.

[37]         Leslie is not a residuary beneficiary. She issued her notice of civil claim on August 21, 2015. Responses to the civil claim were filed by the executor and by George on September 17, 2015 and by Brent on October 28, 2015. This application was filed September 13, 2016. No steps have been taken in the claim filed by Leslie. The outstanding litigation has resulted in no distributions being made from the estate and a frustration in fulfilling the terms of Patricia’s wishes as expressed in her 2010 Will. In my view, it would be equitable not to grant Brent’s application.

[38]         I find there is no prejudice to either George, who can bring his separate application for an interim distribution, or Leslie, who can pursue her claim against the residue of the estate on an expeditious basis.

[39]         For the above reasons I grant Brent’s application.