The recent case of Kelly v. Bell, 2012 BCSC 841, argued by Lindsay Kenney’s Angela Thiele, involved a claim for variation under the Wills Variation Act.
Olive Bell had died in 2008, leaving her estate to her two adult independent children, Valerie and Irving. Pursuant to Olive’s will, the house and its contents were to be left to Irving, while the residue of the estate was to be divided equally between Valerie and Irving. In terms of value at the time of Olive’s death, the terms of the will would have left Irving with about $2.4 million and Valerie with less than $350,000.
The Court held that the main issue in this lawsuit was not the accuracy of Olive’s reasons for disentitling Valerie to an equal share of the estate, but rather the huge increase in value of the house. When Olive reviewed her will in 2006, Olive believed her house to be worth around $1 million and the residue to be worth $860,000. Therefore, the terms of her will in 2006 would have given $1.43 million to Irving (73% of the estate) and $430,000 to Valerie (23% of the estate). However, by the time of Olive’s death in 2008, the house was actually worth $2.058 million and the residue was worth about $695,000. This would have left Irving with 88% of the estate and Valerie with 12% of the estate.
The Court ruled that this was not within the range of society’s reasonable expectation of a judicious person in the circumstances, and that it was dangerously close to a disinheritance of Valerie. The Court held that this was not Olive’s intention. The Court varied the will to give a 23% share of the entire estate (which included the house) to Valerie, though the Court noted that the division was probably on the low side of an adequate, just and equitable distribution.
The case has interesting implications. Assets, such as a house, may fluctuate in value from the time a will is made to the time of death. If an asset is subject to a specific bequest, such a fluctuation in value may result in an unjust distribution at the time of death. This is something that individuals should be aware of when planning their wills.