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WILLS - Construction and interpretation

Monday, April 08, 2019 @ 10:58 AM  

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Appeal by Rydland from a decision of a chambers judge declaring a pour-over clause in her late father’s will that granted the residue of his estate to an inter vivos family trust invalid. The father executed his will in respect of his Canadian assets in 1996. The family trust was settled prior to the execution of the will. The father executed the trust declaration contemporaneously with the execution of his will. The family trust could be amended and was revocable. In 1997, the trust was amended to require the trustees to comply with certain U.S. bank, bond and letter of credit requirements. The amendments were not witnessed in accordance with the formalities set out in the Wills Act. The appellant sought to validate the clause using the doctrines of incorporation by reference and facts of independent significance. In the alternative, she argued that the frailties of the clause could be remedied by an application of s. 58 of the Wills, Estates and Succession Act. The chambers judge held these doctrines and s. 58 inapplicable.

HELD: Appeal dismissed. Incorporation by reference was not available to save the pour-over clause as there was no document referred to in the will that the father intended to incorporate and that was in existence at the time of the will. As of the date of that will, the trust, being amendable and revocable, was not a presently existing document and the testator could not, by his will, create for himself a power to dispose of his property by an instrument not duly executed as a will or codicil. The doctrine of facts of independent significance should not be seen as a device to validate a pour-over clause like that current one both as a matter of statutory interpretation and as a matter of principle. Nothing in the Wills, Estates and Succession Act addressed pour-over clauses. Had the legislature intended to allow amendments to a will so long as the amendment presently affected significant assets, the legislature could have provided for it. Extending this doctrine to apply to an amendable, revocable trust would permit a testator to avoid the strictures of the Act and thus defeat the legislature’s intent. The chambers judge did not err in declining to apply s. 58 here. The appellant did not seek probate of the trust but sought to validate a clause that was part of a will that complied with the formalities. The clause sought to create a trust that would allow the will-maker to circumvent the formalities altogether.

Quinn Estate (Re), [2019] B.C.J. No. 373, British Columbia Court of Appeal, R.J. Bauman C.J.B.C., N.J. Garson and P.M. Willcock JJ.A., March 14, 2019. Digest No. TLD-April82019002