Wills Variation: Testamentary Freedom vs. Legal/Moral Duties

The conceptual core of wills variation legislation is to permit judicial interference with testamentary freedom where adequate provision has not been made in respect of a narrow protected class. Testamentary freedom is subordinate to the main objective of wills variation legislation: adequate, just and equitable provision for spouses and children of the will-maker.

Sigurdson J. in Ciarniello v. Ciarniello Estate, 2016 BCSC 1699 recently affirmed that testamentary freedom should only be interfered with where provision in the will is outside the range of options that satisfy the will-maker’s legal and moral duties.

Second spouse and adult children

Dr. Ciarniello and his second wife lived together for 39 years, including 28 in marriage. He had five adult children, three from his first marriage (referred to as the “First Marriage Children” in the reasons for judgment) and two from his second marriage. Dr. Ciarniello’s second wife was a homemaker and took care of him when his health declined. Dr. Ciarniello died on April 28, 2013 at the age of 80.

The impugned will and wills variation action

The will dated May 3, 2012 provided that, after certain specific gifts, the residue of his estate was to be divided among the five children and that his second wife was to be given any interest that he might have had in the family home. Despite being left with a valuable home, Dr. Ciarniello’s widow had insufficient income to meet her expenses and had drawn down her RRIF considerably since his death. Dr. Ciarnello’s widow brought an action to vary the will on the basis that the deceased failed to make adequate, just and equitable provision for her. Her two children supported her application, but the First Marriage Children opposed it.

Evidence of testamentary intention

Evidence before Sigurdson J. indicated that Dr. Ciarniello told his family that his wife would be provided for outside of the will and each child would share equally:

30   As to the deceased’s estate planning, Mr. Sky, the co-executor and trustee, said that he had been involved in preparing the deceased’s will since around 2006. Mr. Sky deposed that the testator made it clear his intention was to ensure the plaintiff received family assets outside the will through various purchases and dealings, and that his five children would share equally in his estate. Dr. Ciarniello expressed his intention to adequately provide for his wife by gifts of real estate and repayment of business loans and debts and by commercial properties in Vancouver and Vernon and his interest in the family home, in a statutory declaration of May 2012. Mr. Sky described the model as being one to transfer equity outside the will to the plaintiff and the remaining assets to all his children through the will.

The First Marriage Children said that their father carefully planned and provided for his second wife by way of gifts and the payment of business loans during their marriage, including the transfer of commercial properties and his interest in the family home. The First Marriage Children opposed the variation of the will, saying that the will-maker provided an option that amounts to a division of assets that is adequate, just and equitable, so the court should respect that decision.

Applicable wills variation legislation

This case fell to be determined under the Wills Variation Act as Dr. Ciarniello died while that Act was still in force. Section 186 of the new governing statute, the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (“WESA”), applies to a will whenever executed if the will-maker died on or after the date on which Part 4 comes into force. WESA came into force on March 31, 2014 and Dr. Ciarniello died almost a year earlier on April 28, 2013, hence the Wills Variation Act applied.

The essence of the Wills Variation Act is embodied in s. 2 (now reflected in s. 60 of WESA). It provides that if, in the court’s opinion, a will fails to make adequate provision for the proper maintenance and support of the will-maker’s spouse or children, the court is empowered, in its discretion, to vary the will to make the provision it considers adequate, just and equitable in the circumstances.

Testamentary freedom vs. legal and moral duties

The First Marriage Children argued that while the main aim of wills variation legislation is the adequate, just and equitable provision for spouses and children, the other significant interest protected in the legislation is testamentary freedom. Sigurdson J. agreed that testamentary freedom should not be interfered with, but only to the extent that the will-maker has done something that could be said to be within a range of options that satisfy his or her legal and moral duties:

60    The leading authority is Tataryn, where the Supreme Court of Canada identified two fundamental interests the Wills Variation Act protects: the first and main statutory objective is the adequate, just and equitable provision for a will-maker’s spouse and children, and the second statutory objective is the will-maker’s testamentary autonomy.

61    Madam Justice Ballance in Heathfeld v. St. Jacques, 2015 BCSC 505, said at para. 49:

The conceptual essence of the statute is to permit judicial interference with testamentary freedom where adequate provision has not been made in respect of a narrow protected class. Testamentary freedom is, therefore, subordinate to the main objective of the WVA and must yield, to the extent required, to achieve adequate, just and equitable provision for the applicant spouse and/or children. That said, the judicial approach is not to start with a “blank slate and write a will designed to right all the perceived wrongs of the past, nor interfere only to improve upon the degree of fairness of a will if the testator has met his obligations under the [WVA]”: Chan v. Lee (Estate), 2004 BCCA 644 at para. 43.

[…]

87 As noted in Tataryn the court should look at a range of reasonable options in deciding whether the provision by the testator was adequate, just and equitable. Tataryn at 823-4 adds this:

… In many cases, there will be a number of ways of dividing the assets which are adequate, just and equitable. In other words, there will be a wide range of options, any of which might be considered appropriate in the circumstances. Provided that the testator has chosen an option within this range, the will should not be disturbed. Only where the testator has chosen an option which falls below his or her obligations as defined by reference to legal and moral norms, should the court make an order which achieves the justice the testator failed to achieve. In the absence of other evidence a will should be seen as reflecting the means chosen by the testator to meet his legitimate concerns and provide for an ordered administration and distribution of his estate in the best interests of the persons and institutions closest to him. It is the exercise by the testator of his freedom to dispose of his property and is to be interfered with not lightly but only in so far as the statute requires.

Testamentary freedom disturbed to meet legal and moral duties

Dr. Ciarniello was entitled to testamentary autonomy provided his allocation of assets fell within a range of options, any of which might be acceptable. However, Sigurdson J. found that the allocation Dr. Ciarniello chose did not meet his legal and moral duty to his spouse, hence was not within the range of options entitled to deference. The will-maker’s legal duty was assessed as if he notionally separated from his wife immediately before his death. On that basis, he did not discharge the legal duty to his spouse, as she got less than half of the family property at the time. The will-maker also failed to discharge the moral duty to his spouse. Her moral claim was stronger than the adult independent children’s as she and Dr. Ciarniello had a long-term relationship in which she was a loyal participant until his death. Dr. Ciarniello’s will preferred his moral duty to his adult children to his wife’s exclusion.

Although the evidence suggested that the will-maker undertook clear and deliberate estate and tax planning, and was apparently an astute businessman, Sigurdson J. concluded that the provision for his spouse was outside the range of reasonable options. She was without sufficient cash flow to meet her expenses, tax liability and estate’s ongoing liabilities. It was not an adequate, just and equitable provision for her. The will was varied to provide that 25% of the estate be paid to the wife, along with the transfer to her of Dr. Ciarniello’s minority (10%) interest in a company.

Balancing testamentary freedom against legal and moral duties on a wills variation action

Testamentary freedom is one of the fundamental interests protected by wills variation legislation, but it is secondary to the objective of ensuring that provision in the will satisfies certain legal and moral duties to the spouse and children of the will-maker. There will be a number of ways of dividing an estate which are adequate, just and equitable; provided that the will-maker has chosen an option within that range, testamentary freedom should not be disturbed. Only where the will-maker has chosen an option which falls below his or her obligations as defined by reference to legal and moral norms should the court intervene.