March 20, 2011 - Alberta's New Wills and Succession Act

The new Wills and Succession Act covers 126 sections and consolidates (and modernizes) five (5) acts -  the Wills Act, the Intestate Succession Act, the Survivorship Act, the Dependents Relief Act and section 47 of the Trustee Act.  

The Act received Royal Assent on December 2, 2010 by the Alberta legislature.  It is not in force yet; the Act will become effective on proclamation, with some exceptions for specific clauses.  There is no timeline yet as to when that will happen, but it appears to be only a matter of time before it is in force.  Following is a brief summary of some of the changes. 

The basic premise of Alberta succession law that has been in practice for decades (and in practice in common law countries for centuries) shall continue to be in force, the principle of Testamentary Freedom or Freedom of Disposition.  The basic premise is that individuals are free to dispose of their estates in any manner that they decide is best – with a few exceptions.  These exceptions include one’s legal and contractual obligations, and the exception that one’s family must be looked after.  If one dies intestate, the legislation assumes that the deceased wants their family to benefit first and foremost from their estate. 

The new Act is designed with a mind to accommodate and allow for easier settlement of disputes and overall efficiency of settling disputes.   First, it sets out to co-mingle succession law and other legal areas such as trusts, pensions, adult guardianship, contracts and general property concepts.  Also the Act is more directive in telling a court how it must interpret a Will.    With the consolidation of all five statutes into one Act, it should make finding a resolution and determining how a court will resolve an issue much easier to predict and less costly to resolve.  And when property law and family law issues mix, the new Act is addressing some of these more recent and obvious concerns. 

 Transfers of Property While Living 

Supreme Court of Canada made recent decisions on the presumption of gratuitous transfers of assets from parent to child.  The decisions are based on modern values and practices.  The new Act also addresses concerns that may arise, for example, from a family business deal and a disposition in a Will.

If there was a property transfer during life that may impact inheritance, the courts are free to hear evidence and make a direction based on the totality of the evidence. 

 “Child” and “Parent” Definitions Revised and Support Obligations

New definitions:  “Child” shall carry the same definition as the new Family Law Act, SA 2003 F-4.5 (FLA) amendments, and includes children in the womb at the time of death.  Basically the FLA clarifies and re-defines “child” and “parent”.   However, this change is focused on clarifying and detailing different assisted human reproduction opportunities.  It does not change or affect the difference between “child/ren” and “step-child/ren”, or “grandchild/ren” and “step-grandchild/ren”, etc.  Essentially, if you want your Will to set out provisions for step-children, you have to specifically include them as “step-children” and merely leaving everything to your “children” is not sufficient.  This remains the same.  

And with respect to step-children or being in loco parentis, it appears that there is no support obligation for your estate to care for them after you are deceased.  As the definition of “child” takes the definition of “child” and “parent” from Part I of the FLA, which means biological or assisted human reproduction.   It does not include loco parentis.  The new Act states that a “Family Member” may make application for support or maintenance from an estate, and the definition of Family Member only includes the definition of child as defined in the FLA.   Section 1 and 28 of the new Act define “parent” as someone who is as defined in Part I of the FLA.  This definition does not include in loco parentis parents.  Unless you are a grandparent standing in the place of you grandchild/ren or great-grandchild/ren, in which case your estate does have support obligations. Adding to the list of family members who can claim support will be grandchildren, great-grandchildren and adult children under the age of 22 who are in full-time school

With respect to family maintenance and support, an adult interdependent partner or spouse of a deceased will have an automatic right to stay in their shared home for three months after death.  However, the Dower Act, RSA 2000, D-15, still takes precedence, Section 1 (c) (iv) “the right of the surviving spouse to a life estate in the homestead of the deceased married person, and  (v) the right of the surviving spouse to a life estate in the personal property of the deceased married person that is exempt from seizure under writ proceedings;”

Survivorship

Currently, if two people die at the same time, or in circumstances where it is impossible to determine who dies first, all the property interests flow to the youngest person as if that person survived longer (Survivorship Act, RSA 2000, S-28).    The new Act provides that each person is deemed to have died first.  And if they have had joint property, that property is deemed to be split equally between both of them.

Validity and Formalities 

With respect to Wills, the basic formalities will continue, but provisions in the new Act shall modernize the way Wills are interpreted and validated. 

Marriage and Divorce:  The Act removes the rule that a marriage invalidates a Will.  However, it adds a rule that a gift or bequest to an ex-spouse or ex-partner is void unless the Will specifically states otherwise.  But only IF there is a divorce judgment that is granted AFTER the coming into force of the new Act or they become a former Adult Interpedently Partner AFTER the coming into force of the new Act.   Merely being separated and living separate lives is not sufficient, and getting your divorce before the new Act is proclaimed, is not sufficient.

And the new Act, along with changes to the Matrimonial Property Act, allows a spouse to take matrimonial property whether the marriage ends due to death or due to divorce.  As matrimonial law now stands, if you divorce, you are entitled to roughly half the property acquired during the marriage.  However, couples who lose a spouse to death do not have this same entitlement.  These changes in the new Act to give the same property rights to a spouse of a deceased.

Interpretation:  The Act also provides for allowing extrinsic evidence of a deceased’s intent to aid in interpreting a Will.  The courts have new powers in validating a Will and can rectify mistakes by adding or deleting words if it is clear that there was a mistake.  And witnesses (and spouses of witnesses) who were previously disqualified from inheriting can qualify if they prove there was no undue influence.

The Act provides for a default list if a named beneficiary cannot inherit.

Intestacy

With respect to intestate succession, the Act makes two major changes.  One, if a person dies intestate with spouse or adult interdependent partner, the spouse or adult interdependent partner takes the entire estate as long as there are either no descendants or all descendants are also the descendants of the surviving spouse or adult interdependent partner;  if there are descendants that are not the offspring of the surviving spouse or adult interdependent partner, then the surviving spouse or adult interdependent partner takes the prescribed amount or 50% and the children take the residue to be distributed amongst them.   The prescribed amount will be set by regulations and varied from time to time.

Secondly, if a person dies intestate, and leaves no children and no parents, then the entire estate is split between the maternal and paternal sides of his family, instead of going to nearest next of kin.

Trustee Act 

The sections of the Trustee Act that allow for dispositions through external documents such as life insurance or RRSP, with a designated beneficiary will remain the same. However, these laws are now moved into this new Act from the Trustee Act.