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Tuesday, February 21, 2017

When a lawyer makes a new will for a client, does the beneficiary under the earlier will have rights?

One of the questions I hear regularly from clients, blog readers, and seminar attendees is "can he do that?" Sometimes they are asking about what executors can do and at other times they want to know about beneficiaries. And in some cases, they want to know what the lawyer is allowed to do.

In British Columbia recently, an interesting question was asked: Can a lawyer make a new will for a client without telling (or asking) a person who was the beneficiary under the client's previous will? Does the person who is a beneficiary under a will have any rights if the testator decides to make a new will that reduces or eliminates that beneficiary's inheritance?

Here is the situation. In 2007, Norman and Barbara Johnston made mirror wills. The wills said that they left everything to each other, and upon both of them being deceased, the entire estate would go outright to their son, David. In 2010, Barbara died. In 2012, Norman made a new will. He left a couple of small bequests to family members, and made a gift of $100,000 to his church. He then left the residue of the estate to David in trust for his lifetime, with the Public Trustee named as the trustee of David's inheritance.

David wasn't happy about this. After Norman died in 2013 and David found out about the new will, he decided to contest the will. Among other things, he argued that the lawyer who made the 2012 will, who was the same lawyer Norman had used all along, could not make this new will because he owed a duty of care to David. He lost his case at trial. He then appealed it, and lost on appeal. (If you're wondering how long court cases take, this case was concluded in December, 2016)

To read the full case report, click here: Johnston Estate v. Johnston.

The court confirmed that when a lawyer is asked by a client to make a will, the lawyer owes nothing at all to any beneficiaries who were named under previous wills. The lawyer's duty is to his or her client to make a will that meets the client's needs and wishes.

The court was also careful to point out that a lawyer does have some responsibility towards the beneficiaries under the new will. For example, if the lawyer took way too long to draft the will and the client died before the will was completed, and this caused a beneficiary to lose out on an inheritance, the lawyer could be held liable for that loss.

I think it's important to discuss this case because executors and beneficiaries alike misunderstand the rights they may or may not have under a will while the testator is still alive. In this case, it appears that David launched a long, expensive lawsuit based on rights he never had in the first place.

12 comments:

  1. A rather sad case that somehow David's lawyer J. Dubas was not able to clearly show that his case was feeble at best. You would think he would have sought out other opinions. David could not see outside the box. He was convinced he had a case. Some people are just plain stubborn.
    AS for my case. My lawyer is serving my sibling today ie financials. TBC

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  2. After a person passes away. Is there a time limit for the will to go to probate in British Columbia? If a will does go to probate who gets notified? My husbands Mother passed and he was not listed as a beneficiary. We were joint owners on our house (we lived together for 10 years)so her lawyer gifted the house to him in her will so he could not go after the estate. Just wondering if he will get notified? Hope that make sense. Thank you for your time

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    Replies
    1. You first mention that your husband is not to be a beneficiary, but then state the house was gifted to him in the will which would signify he is to be a beneficiary. Perhaps your husband is actually a joint owner with right of survivorship (joint tenant) in which case he would automatically assume full ownership of the home without the will, but he would need a copy of the death certificate so as to have the property registration transferred fully to his name.

      A copy of the Death Certificate could be requested from the estate executor appointed by the mother. It is the executor who assumes responsibility for communicating with beneficiaries and for settling the estate.

      Although you claim the lawyer gifted the house, it would be the mother who had gifted the home. While a lawyer can provide advice and usually prepares the will document, the will pertains to the mother's estate, not the lawyer's and she needed to sign it indicating her agreement to all the will's provisions.

      Lynne would be best to comment as receiving the home would not necessarily disqualify your husband from pursuing more of the estate if entitled.

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    2. Penny, there isn't a time limit. If there is a will, then the search itself is only to show that no later will was found. If the search is more than 180 days old, the executor should do a new search since there is no point using a search that is out of date.

      As for whether your husband will get notice, that's a bit more complicated. All beneficiaries named in the will get notices, but you said that he isn't named. I'm not sure how you know that, but I assume the executor or the estate lawyer told you. If the will names an alternate executor, that person gets notice too.

      I've never practiced law in BC but it's my understanding that potential beneficiaries on intestacy (i.e. anyone who would have inherited had there not been a will) get notice too. I would have thought that included your husband since he is a child of the deceased. However, I could be wrong on that and it would be worth your while to check the BC Supreme Court Rules to know for sure.

      The bit about the joint ownership of the house is somewhat confusing because the lawyer could not have gifted it to anyone since it wasn't the lawyer's house to gift. I think what you mean is simply that the lawyer took care of the paperwork that gave the house to the surviving joint owners, that being your husband and you. Any joint asset, such as this house, is not part of the estate, so that does not entitle your husband to notice regarding the probate.

      If you don't hear anything more about the estate and you're worried that your husband is not getting information he's entitled to get, you can always do a search at the probate court to see whether anyone has applied for probate.

      Lynne

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  3. @Penny Armstrong
    I understand that you question is aimed at Lynne Butler but since this is a blog, a blog for all viewers to learn from and share I have to say, I for one, am thoroughly confused by your query. :)

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  4. There has already been a will search done and his brothers have mentioned that they are going to contest the will. All I'm wondering is there a time limit for the will to go to probate in British Columbia? And if it is in probate will my husband be notified. My understanding once a will search has been completed you have 180 days to contest a will. It is really a very sad situation that has happened here and very complicated. It amazes me that when a parent dies how people change.

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  5. I too am confused as Penny's info remains un-clear. She mentions a will search so either there was no will found or the search is to establish if there is an alternate will recorded in the registry. Probate cannot proceed until a proper will is located and is deemed to be valid.

    Depending on the composition of the estate, probate may not even be necessary. IF the home was registered in Joint Tenancy with Penny's husband, then the property should not form part of the mother's estate.

    Assuming there is a will, just because the brothers may not like what that will contains, does not provide grounds to contest the will's validity.

    Unless Penny's husband is named as a beneficiary in the mother's will, he will likely not receive notification unless the will is deemed to be not valid.

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  6. I have a new question for Lynne, please. In BC can a person make a new, will naming a new executorand alternate executor without notifying the person named as executor in the previous will? Is there a legal requirement for the testator (person making the will) or the lawyer drawing up the will to notify the previously named executor, in the previous will that he/she is no longer executor?

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    Replies
    1. Yes, you can make a new will without notifying the previous executor.

      Lynne

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    2. Thank you so much, Lynne for your reply. I really appreciate it.

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  7. Mother in law passed away a month ago, husband requested copy of will ( he was one of the executors in what we found out is not the most up to date will ) Sister told him he is not legally entitled as not an executor or a beneficiary. This was unknown to him , as was the fact that in 2000 sister influenced mother to put home in only the sister's name. No money changed hands. There are 4 siblings. Husband has no idea why he would have been removed as a beneficiary. The date of the last will ( according to sister ) was 8 years after house name transfer. Mother passed away from dementia, which she was suffering from when new will was written. She and husband had a relationship until her death, but he was somewhat estranged from the sister. Because of the length of time since home name transfer is there nothing he can do to get his share ? British Columbia

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  8. With an aging population and dementia ie Alzheimer we might get to see more Wills challenged. Clints should discuss this with their lawyer and lawyers with their clients. My case-While I am not challenging my mother's Will, I will be challenging my sibling's actions re the use of our mother's monies for personal use, a so called money gift without supporting documentation, and monies transferred into a joint account that ended up in that beneficiary's personal account.TBC

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