Canada: How WESA Will Impact Your Will

Last Updated: March 27 2014
Article by Marie-Claire Dy

Over the past few years, the BC legislature has overhauled British Columbia's laws regarding estate planning. In September 2011, the heavily revised Power of Attorney Act and Representation Agreement Act became effective, providing the province with modernized legislation for incapacity planning. In the same vein, the Wills, Estates and Succession Act ("WESA") will revise British Columbia's wills and estates legislation to bring it into the 21st century and will consolidate it under a single statute.

WESA will be effective on March 31, 2014. On the same date, the Wills Act, the Estate Administration Act, the Wills Variation Act, and the Probate Recognition Act will all be repealed. This newsletter will highlight some of the major changes in WESA and, in particular, those changes that could impact wills executed before WESA comes into force.

Effect of marriage on a will

Under the Wills Act, if a person signed a will before they were married, that will was automatically revoked on their marriage unless the will included a clause stating that it was made in contemplation of the will-maker's impending marriage. Under WESA, wills will no longer be revoked by marriage. However, we recommend that wills be reviewed whenever a major event, such as a marriage or birth of a child, occurs in a person's life. It should also be noted that if a will was revoked because of marriage before WESA became effective, it will remain revoked under WESA.

Gifts by attorneys

WESA introduces rules relating to gifts made by a person appointed as an attorney under a power of attorney. If the attorney gives away property that is the subject of a specific gift under a person's will, then the beneficiary under the will will be entitled to claim a gift equal to the value of the original gift on the date the original gift was given away. This will apply unless there is evidence that the will-maker authorized or intended to make such a gift during their lifetime and therefore leave nothing to the beneficiary under the will. As with many of the WESA changes, a will-maker can avoid these rules by stating in their will that these provisions do not apply.

Presumption of death

Over the years, case law and legislation have developed to deal with circumstances where a will-maker and a beneficiary died at the same time or in circumstances where it could not be determined which person died first. The old regime dealing with this was relatively simple. If a will-maker and a beneficiary died at the same time or in circumstances where it could not be determined which person died first, then the older person was deemed to have died first. Under WESA, if a will-maker and a beneficiary die in those circumstances or within five days of each other, the beneficiary is deemed to have predeceased the will-maker for the purposes of interpreting the will-maker's will.

WESA also changes the way in which ownership of jointly owned property passes where the owners die at the same time, in circumstances where it cannot be determined which owner died first or within five days of each other. In the past the younger owner was deemed to have survived and that person's estate received all of the jointly owned property. Under WESA, however, the joint ownership is severed and each owner's estate receives a 50% interest in the jointly owned property as a tenant in common.

Spousal disinheritance

Under the Wills Act, a person would be automatically disinherited from their spouse's will if they divorced their spouse, their marriage was annulled by the court or if there was a judicial separation. However, there was no automatic disinheritance of common-law spouses or in circumstances where the courts were not involved in a marital separation. Under WESA, common-law spouses will be automatically disinherited when the relationship ends and married spouses will be disinherited if: (i) the spouses live separate and apart for at least two years and at least one of them has the intention of living separate and apart permanently; or (ii) the spouses "separate" under the Family Law Act. Even if the spouses subsequently reconcile, reconciliation does not revive the gift provided under the will unless specifically addressed in the will. It should be noted that Bill 14 (which was introduced earlier this month) will amend when spousal relationships end and will allow for reconciliation within one year of separation.

Wills variation provisions

We had hoped that the Wills Variation Act would be substantially amended when WESA was enacted. Unfortunately, this was not the case. This means that spouses and children, regardless of whether they are adults or minors, of a will-maker continue to be entitled to challenge the will-maker's will if they believe they have not been adequately provided for in the will. No additional guidance with respect to the application of these provisions was provided in WESA.

Multiple wills

In some parts of Canada, multiple wills have been used as a means of limiting probate fees. Under this strategy, all of the assets that are likely to require probate before they can be transferred to the beneficiaries will be distributed under one will and the assets that do not require probate to be transferred will be distributed under another will. While multiple wills have been used in the past to deal with assets outside of British Columbia and to allow for probate planning in other jurisdictions, there has been much debate over whether it was possible to use multiple British Columbia wills to reduce probate fees. However, it appears that WESA will allow BC residents to use multiple wills to minimize probate, provided that different executors are used for each will. It is important to note that there are certain limitation periods, such as the limitation period for making claims under the Wills Variation Act (and the equivalent provisions under the WESA) that are based on the date a will is probated. If a will is never probated, those limitation periods will never start to run.

In light of the numerous changes that WESA will make to wills and estates law in British Columbia, we recommend that wills executed before March 31, 2014 be reviewed to ensure that WESA does not impact the will in a way that would be contrary to the will-maker's intentions.

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