Mildred Doucette liked to maintain control: She liked to control her children, and she liked to control her property. In her estate, however, the ultimate control of who of her children ended up with what of her assets came down to a judge’s discretion in the Supreme Court of British Columbia.
Mildred was divorced from her ex-husband in 1981, and died in 2004 leaving four adult children ranging in age from 47 to 53. The court’s summary of the evidence showed that she had a strained relationship with at least two of the children, and this disfavour was reflected in her estate planning choices.
Mildred held some investments and bank accounts jointly with three of the children (one of whom was a recent addition after a late life reconciliation) and named all four as beneficiaries under her Will. The approximate value of the inheritances:
Diane – $230,000
Louie – $283,000
Joslin – $155,000
John – $5,000
Not surprisingly, the Will and joint accounts were challenged by John. Fortunately for him, the 2007 decision of the Supreme Court of Canada in Pecore v. Pecore places the onus of proof on an adult child where a parent has added him or her as a joint owner. In applying the procedure laid down by the SCC, the judge had to find evidence that Mildred intended each transfer to be beneficial.
In this case, it was all Mildred’s original money, all the income was paid to Mildred alone, and Mildred paid all related income taxes. Having failed to persuade the judge, each surviving joint owner child was deemed to be a resulting trustee holding his or her account as trustee for the estate beneficiaries.
Accordingly, the jointures were ignored and the account values were added into the estate assets, with the following resulting approximate inheritance values (the revised total is different from the original due to income and growth between death and trial):
Diane – $424,000
Louie – $420,000
Joslin – $5,000
John – $5,000
Obviously this wasn’t much help to John, but there was still one major issue yet to be resolved: whether the judge would exercise discretion to redistribute the Will entitlements on moral grounds.
In British Columbia, the Wills Variation Act has a provision distinct from all other provinces’ estate laws. If a judge is of the opinion that a testator has not made adequate support for a spouse or children, the judge may order an alternative estate distribution.
Over about fifteen pages, the judge recounted the history of Mildred’s sometimes acrimonious relationships with her children from their infancy to her death. While the court was prepared to “respect Mildred Doucette’s testamentary autonomy and intentions,” the paltry sums for John and Joslin showed that she “failed in her moral obligations.”
The judge then proceeded to directly vary the $854,000 estate as follows:
Diane – 25%
Louie – 35%
Joslin – 25%
John – 15%
This second stage Will redistribution aside, the relevant take-away here – regardless of province – is that a parent’s intention on adding a joint owner should be clearly documented in writing, particularly where it effects an uneven distribution among children.
Doucette v. Clarke, 2007 BCSC 1021