b columbia law institute · backgrounder—wills, estates and succession: a modern legal framework...

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BRITISH COLUMBIA LAW INSTITUTE 1822 East Mall, University of British Columbia Vancouver, British Columbia V6T 1Z1 Voice: (604) 822 0142 Fax: (604) 822 0144 E‐mail: [email protected] Website: www.bcli.org Backgrounder Report no. 45—Wills, Estates and Succession: A Modern Legal Framework Date: June 2006 The law of succession is among the most archaic areas of private law, and British Columbia legislation dealing with various aspects of succession is highly fragmented, spread throughout a forest of statutes. The British Columbia Law Institute initiated the Succession Law Reform Project in 2003 with support from the Ministry of Attorney General in order to redress the long neglect of this area. The goals of the project are to reduce the number of separate succession‐related enactments through consolidation and to modernize the statu‐ tory and common law dealing with succession on death. The project was conducted with the aid of a large group of volunteers drawn from the prac‐ tising wills and estates Bar, the Society of Notaries Public of British Columbia, and legal academics with expertise in the law of succession. Their work has culminated in this re‐ port, which contains draft reform legislation and commentary, to implement the conclu‐ sions reached by the committees formed to carry out the project. An Interim Report on Summary Administration of Small Estates was issued earlier. The new small estates proce‐ dure it contained was designed for implementation as a set of amendments to existing leg‐ islation. It is incorporated into the draft reform legislation contained in this report as well. The project included a review of the law and legislation governing alternate succession ve‐ hicles that are sometimes referred to as “will substitutes,” such as insurance and retire‐ ment savings plan beneficiary designations, as well as the more traditional subjects of suc‐ cession law: wills, intestate succession, and probate procedure. Enactments selected for consolidation were ones dealing exclusively or at least primarily with succession on death, as opposed to those dealing with aspects of the law of property that are applicable equally to decedents’ estates and the living. The draft Wills, Estates and Succession Act contained in Part Two of this report consolidates the present Wills Act, Wills Variation Act, Estate Administration Act, and Probate Recognition Act. Provisions currently found in the Law and Equity Act regarding the designation of pen‐ sion and retirements savings plan beneficiaries are also consolidated, although the benefi‐ ciary designation provisions in the Insurance Act are not. Certain amendments to the Insur- ance Act beneficiary designation sections are recommended, however.

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Page 1: B COLUMBIA LAW INSTITUTE · Backgrounder—Wills, Estates and Succession: A Modern Legal Framework June 2006 The consolidated reform legislation contains provisions on survivorship

BRITISHCOLUMBIALAWINSTITUTE 1822EastMall,UniversityofBritishColumbia Vancouver,BritishColumbiaV6T1Z1 Voice:(604)8220142Fax:(604)8220144E‐mail:[email protected] Website:www.bcli.org

Backgrounder

Reportno.45—Wills,EstatesandSuccession:AModernLegalFrameworkDate:June2006

Thelawofsuccessionisamongthemostarchaicareasofprivatelaw,andBritishColumbialegislation dealing with various aspects of succession is highly fragmented, spreadthroughoutaforestofstatutes.TheBritishColumbiaLawInstituteinitiatedtheSuccessionLawReformProjectin2003withsupportfromtheMinistryofAttorneyGeneralinordertoredressthelongneglectofthisarea.Thegoalsoftheprojectaretoreducethenumberofseparatesuccession‐relatedenactmentsthroughconsolidationandtomodernizethestatu‐toryandcommonlawdealingwithsuccessionondeath.Theprojectwasconductedwiththeaidofalargegroupofvolunteersdrawnfromtheprac‐tisingwills and estates Bar, the Society ofNotaries Public of British Columbia, and legalacademicswithexpertise in the lawof succession.Theirworkhas culminated in this re‐port,which contains draft reform legislation and commentary, to implement the conclu‐sions reached by the committees formed to carry out the project. An Interim Report onSummaryAdministrationofSmallEstateswasissuedearlier.Thenewsmallestatesproce‐dureitcontainedwasdesignedforimplementationasasetofamendmentstoexistingleg‐islation.Itisincorporatedintothedraftreformlegislationcontainedinthisreportaswell.Theprojectincludedareviewofthelawandlegislationgoverningalternatesuccessionve‐hicles that are sometimes referred to as “will substitutes,” such as insurance and retire‐mentsavingsplanbeneficiarydesignations,aswellasthemoretraditionalsubjectsofsuc‐cessionlaw:wills,intestatesuccession,andprobateprocedure.Enactmentsselected forconsolidationwereonesdealingexclusivelyorat leastprimarilywithsuccessionondeath,asopposedtothosedealingwithaspectsofthelawofpropertythatareapplicableequallytodecedents’estatesandtheliving.ThedraftWills,EstatesandSuccessionActcontainedinPartTwoofthisreportconsolidatesthepresentWillsAct,WillsVariationAct,EstateAdministrationAct,andProbateRecognitionAct.ProvisionscurrentlyfoundintheLawandEquityActregardingthedesignationofpen‐sionandretirementssavingsplanbeneficiariesarealsoconsolidated,althoughthebenefi‐ciarydesignationprovisionsintheInsuranceActarenot.CertainamendmentstotheInsur­anceActbeneficiarydesignationsectionsarerecommended,however.

Page 2: B COLUMBIA LAW INSTITUTE · Backgrounder—Wills, Estates and Succession: A Modern Legal Framework June 2006 The consolidated reform legislation contains provisions on survivorship

BritishColumbiaLawInstitute—BCLIReportno.45 Page2of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006Theconsolidatedreformlegislationcontainsprovisionsonsurvivorshiptodealwithsitua‐tionsinwhichtwoormorepersonsdieatthesametimeorincircumstancesmakingitim‐possibletodeterminewhichofthemdiedfirst.Theseprovisionsdifferfromthesurvivor‐ship presumptions now contained in the present Survivorship and Presumption of DeathAct,asexplainedbelow.ThereformlegislationinPartTwocontainsanumberofmiscellaneousamendmentstotheEscheatAct, thePower of AppointmentAct, and the beneficiarydesignationprovisions inParts3and4of the InsuranceActmentionedabove.While thesearenotpartof thecon‐solidatedenactments, theyare includedaselementsofa comprehensive reformBill. Sig‐nificantreformsarerecommendedinalltheareasofsuccessionlawinadditiontothecon‐solidationofenactments.Asubstantialnumberof the reformsurged in thisReportwerepresagedbyrecommendationsoftheformerLawReformCommissionofBritishColumbiainaseriesofreportspublishedinthe1980s.Themostimportantchangesfrompresentlawaresummarizedbelow.ReformoftheWillsActandtheGeneralLawofWills

ThisreportrecommendsthefollowingmajorchangestotheWillsActandthenon‐statutorylawofwills:• Introduction of a broad dispensing power to relieve against the consequences of a

breachoftheformalrequirementsforexecutionandattestationofawill.Theprovi‐sionwouldallowthecourttoadmitadocumenttoprobateifitcouldbesatisfiedthatthedocumentembodiesthefinaltestamentarywishesofthedocument’smaker.Simi‐larprovisionsarefoundinfiveCanadianprovincesatthepresenttime.

• Anattestingwitnessorthewitness’sspousewouldnotlosethebenefitofagiftunderthewilltothatwitnessorthespouseifthewitnessorotherpersonseekingtoupholdthegiftisabletoprovethatthetestatorknewandapprovedofthegift.

• Awillwouldnolongerbeautomaticallyrevokedbythesubsequentmarriageofthetestator.

• Circumstances inwhichagiftunderawill toaspouseof the testator isrevokedbyeventsassociatedwith thebreakdownof thespousal relationshipwouldbeharmo‐nizedwiththeeventsthatgiverisetoadivisionoffamilyassetsunderPart5(matri‐monialproperty)oftheFamilyRelationsAct.Currently,section16oftheWillsActandPart5oftheFamilyRelationsActarenotfullycongruentinthisrespect.

• Theprincipleunderlyingsection16oftheWillsAct,namelythatatestamentarygifttoaspouseisrevokedautomaticallyonthebreakdownofthespousalrelationshipandthewill interpretedas if the formerspousehadpredeceased the testator,wouldbeextendedtonon‐maritalspouses,i.e.,personsinmarriage‐likerelationshipsofatleasttwoyears’duration.Thisisinkeepingwithagenerallegislativepolicytotreatmar‐ried persons and those in stable, long‐termmarriage‐like relationships in a similarmanner.

Page 3: B COLUMBIA LAW INSTITUTE · Backgrounder—Wills, Estates and Succession: A Modern Legal Framework June 2006 The consolidated reform legislation contains provisions on survivorship

BritishColumbiaLawInstitute—BCLIReportno.45 Page3of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006• Courtswouldbegiventhepowertorectifyawillifitdoesnotcoincidewiththetesta‐

tor’sintentionsduetoanaccidentalsliporomission,amisunderstandingofthetesta‐tor’s instructions, or a failure to carry out those instructions. This power is aimedmainly atpreventing thedefeatof testamentary intentionsdue to errors andomis‐sionsofthewilldrafter.Itwouldnotbeavailableincaseswherethetestatorhasmis‐understood the legal effect of languageused in thewill orwhere theremerely is adisputeoverthemeaningofthewill.Therectificationpowercouldbeusedateitherthe probate or construction stage, and extrinsic evidence would be admissible toprovethefactsjustifyingitsexercise.

• So‐called “privilegedwills,” i.e., informalwillsmadebymilitarypersonnelonactiveservice andmariners at sea,wouldbe abolished.Reasons for abolitionare that theprivilegeisindisuse,thearmedforcesdonotencouragerelianceonit,andthepro‐poseddispensationpowerwouldbeavailableinanycasetoupholdalegallyinformalwill that is demonstrated to the court’s satisfaction to represent final testamentarywishes.Theprivilegeextended tominorswhoareorhavebeenmarried tomakeavalidwillwouldbereplacedbyadecreaseintheminimumageforwill‐makingto16.

• Rulesconcerningtheadmissionofextrinsicevidenceoftestamentaryintentasanaidto the interpretation ofwills have been given statutory form. Extrinsic evidence oftestamentaryintentwouldbeadmissiblewherethewillismeaninglessorambiguous,eitheronitsfaceorwhenreadinlightofsurroundingcircumstances,butevidenceofintentwouldnotbeadmissibleforthepurposeofshowingambiguity.Thedistinctionbetweenpatentandlatentambiguitywouldnolongerberelevanttotheapplicationoftheserules.

• Realpropertywouldabatetogetherwithpersonalproperty.• The principle of section 30 of theWills Act (i.e., that themortgage debt passes to‐

getherwithmortgagedrealpropertyratherthanbeingbornegenerallybytheestate)wouldbeextendedtoregisteredchargesonbothrealandtangiblepersonalproperty,if thechargesrelatetotheacquisition,preservation,or improvementoftheasset inquestion.

• TheConventionProvidingaUniformLawontheFormofanInternationalWillwouldbeimplementedinBritishColumbia,withlawyersandnotariespublicdesignatedasthe “authorized persons” beforewhom awill could be executed in the Conventionformbytestatorswishingtomakeuseofit.

ReformoftheWillsVariationAct

ThecurrentWillsVariationActdiffersfromdependantsreliefstatutesinmostotherprov‐incesandterritoriesinimposingnorestrictionsontheabilityofadultnon‐spousalclaim‐ants to seek relief against awill. Inmost Canadian jurisdictions, an adult claimant otherthanasurvivingspousemustdemonstrateaninabilitytobeself‐supportingduetoillnessormental or physical disability in order to be eligible to bring an action to displace thetermsofawill.CaseauthorityrequiresthatcourtsapplytheActwithregardtoamoralob‐ligationnormallyrestingonaparenttoprovideforchildrenintheparent’swill,regardlessof their children’s circumstances.While this approach hasmany defenders, themajority

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BritishColumbiaLawInstitute—BCLIReportno.45 Page4of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006positionthatultimatelyprevailedinthetwocommitteesthatdealtwiththematterintheSuccessionLawReformProjectwasthatthecurrentActanditsinterpretationpresenttoogreataninroadontestamentaryfreedom.No change is proposed in relation to the eligibility of surviving spouses to claim reliefagainstthetermsofawillortheprinciplesonwhichthatreliefisbased,whichareheavilyinfluencedbythelawofmatrimonialproperty.Inrelationtoadult,self‐sufficientchildrenof the deceased, however, the reformsproposed in this report to theWills VariationActwouldbringtheActclosertothedependantsrelieflegislationofotherCanadianprovincesandterritories.The dependants relief provisions of Part Two contain a significant new departure fromotherCanadianlegislation,however,indistinguishingbetweentheformofrelieftosurviv‐ingspousesandthatavailabletoothereligibleclaimants.Asurvivingspousewillcontinuetobeentitledtoajustandequitableprovisionoutoftheestateifthewillfailstoprovideit.Relieftootherclaimantswouldbebasedon“reasonableandnecessarymaintenance.”Themaintenancewouldbepaidperiodically,butcouldbefinancedthroughanannuity,particu‐larlyifitistobepaidoveralengthyperiod.Significantfeaturesoftherecommendeddependantsrelieflegislationare:• Thedependantsreliefprovisionsapplytointestaciesaswellaswills,unlikethepre‐

sentWillsVariationAct.AllotherCanadiandependantsreliefstatutesexceptoneal‐lowvariationoftheintestatedistributionscheme.

• Achildovertheageofmajoritywouldhavetobeunabletobecomeself‐supportingduetoillness,mentalorphysicaldisability,oranotherspecialcircumstance(“specialcircumstanceschild”)orcurrentorprospectiveenrolmentinaneducationalorvoca‐tionaltrainingprogram(“studentclaimant”)tobeeligibleforrelief.

• Astepchildwhowasaminoratthetimeofthedeceased’sdeathandwhohadbeensupportedbythedeceasedforatleastoneyearimmediatelybeforedeath,wouldbeeligibletoclaimrelief(“eligiblestepchild”).CurrentlytheWillsVariationActdoesnotallow any stepchild to claim relief unless adopted by the deceased during the de‐ceased’slifetime.

• Ananti‐avoidanceprovisionwouldmakeatransactionconferringabenefitonasec‐ondpersonvoidableagainstaneligibleclaimant if itwasmadeby thedeceased forthe purpose of defeating rights under the dependants relief legislation. The courtcouldmakeanorderinrelationtothetransactionthatitcouldhavemadeundertheFraudulent Conveyance Act if the eligible claimantwhose rightswere defeated hadbeenacreditorofthedeceased.Atransactionwouldnotbevoidableifthepartywhobenefitedprovidedgoodconsiderationandenteredintothetransactioningoodfaith.CurrentlytheWillsVariationActcontainsnoanti‐avoidanceprovisions.

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BritishColumbiaLawInstitute—BCLIReportno.45 Page5of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006IntestateSuccession

ThecurrentintestacyprovisionsarefoundinPart10oftheEstateAdministrationAct,sur‐rounded by procedural legislation. In the reform legislation the intestacy provisions aregroupedtogetherwithothersdealingwithsubstantiverights.Therightsofasurvivingspouseinanintestacywouldbesignificantlyenhanced.Thepref‐erential share, applicable if the deceased left a spouse and surviving issue,would be in‐creasedfromthecurrentlevelof$65,000to$300,000.(Iftheissuearenotallissueofbothspouses,thepreferentialsharewouldbe$150,000becausethenaturalchildrenofthede‐ceasedcouldnotnormallyexpecttoinheritfromthespouseandshouldinfairnessreceivesomeoftheestate).Aspousewouldtake1/2ofthebalanceoftheestateregardlessofthenumberof issue.Currently the surviving spouse takesonly1/3of thebalance if there ismorethanonechildorothersurvivingissue.The increasedspousalpreferentialshare is intendedto takeaccountof thechange in thevalueofmoneyandincreaseinpropertyvaluesinBritishColumbiasincethepreferentialsharewas set at $65,000 several decades ago. The formerLawReformCommission rec‐ommendedthepreferentialsharebeincreasedto$200,000in1983.Anincreaseintheor‐dinaryspousalshare from1/3to1/2wherethereareseveral issue isconsideredappro‐priateinlightofcurrentsocialstandardsemphasizingtheneedtosecurethepositionofasurvivingspousewhomaybewelladvancedinyearsatthetimeoftheintestate’sdeath.Theconceptof “deemed lapse,”underwhicha testamentarygift toaspouse isautomati‐callyrevokedwhenthespousalrelationshipisdissolvedoradivisionoffamilyassetsoc‐curs, isextended to intestacy.Ondivorceorexecutionofaseparationagreement, forex‐ample,therighttoaspousalshareintheintestacyoftheotherpartytothemarriagewouldbeextinguished.Thestatutorylifeestateofthesurvivingspouseinthespousalhomewouldbeabolishedinfavourofarighttoappropriatethespousalshareagainstthespousalhomeattheoptionofthesurvivingspouse.Thestatutorylifeestatehasfewdefenders,asitisperceivedtocreatevaluation problems and to overcomplicate the administration of intestacies. This changetoowasrecommendedbytheLawReformCommissionmorethantwodecadesago.Achangefromthecurrentschemeof intestatedistributiondependingondegreesofcon‐sanguinitytoa“parentelic”one,i.e.,asystembasedonthelineofdescentfromtheclosestcommon ancestor of the deceased person and the relative in question, is recommended.Theexistingandproposedsystemsproducethesameresultsexceptwhereremotekinareentitledtotakeinanintestacy.Undertheexistingdegreesofkinshipsystem,acloserrela‐tiveandamuchmoreremoteonemaytakethesameshareifthereisnosurvivingspouseor issue, because they are of the samedegree of kinship.Under a parentelic system, thecloserrelativeinthelineofdescentfromthecommonancestorwillalwaystakeaheadofamoreremoterelative.TheparentelicsystemhasbeenadoptedinManitobaandisafeatureoftheUniformIntestateSuccessionActoftheUniformLawConferenceofCanada.IthasalsobeenrecommendedforenactmentinAlbertabytheAlbertaLawReformInstitute.

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BritishColumbiaLawInstitute—BCLIReportno.45 Page6of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006SmallEstates

Specialattentionwasgiven in theProject to improving thescheme forsummaryadmini‐strationofsmallestates inBritishColumbia.Theprocedureproposedtoreplace thecur‐rentsection20oftheEstateAdministrationActwouldallowestatesunderavalueceilingsetbyregulationtobeadministeredwithoutaformalgrantofprobateoradministration.The procedurewould be available to the official administrator aswell as the deceased’spersonalrepresentativeorthedeceased’ssuccessors.Theprocedurewouldbeinitiatedbythefilingofastatutorydeclarationintheprobateregistrybythepersonalrepresentative,ifany,apersonbeneficially interested in theestate,anomineewith thewrittenconsentofthosebeneficiallyinterested,ortheofficialadministrator.Theroleoftheprobateregistrywouldbelimitedtoenteringarecordofthefilingofthesmallestatedeclarationinthecivilregistrydatabasesystemandstampingandreturningacopyofthesmallestatedeclaration.Thecopyofthesmallestatedeclarationwiththecourtstampwouldfunctionlikeagrant,allowingthedeclaranttogathertheassetsoftheestateanddealwiththemasifaformalgrantofprobateoradministrationhad issued.Personsdealingwith thedeclaranton thestrength of the court‐stamped declaration would receive a statutory release of liabilitywhichwould protect them to the same extent as if the declarant had received a formalgrant.Theproposedsmallestateprocedurewouldbelimitedtoestatesconsistingsolelyofper‐sonal property, as a formal grant of probate or administration is necessary in order totransferrealestate inBritishColumbia.Thereporturges,however, thatconsiderationbegiventoanamendmenttotheLandTitleActthatwouldrelaxthisrequirementinconnec‐tionwithsmallestates.Thereportrecommendsthat thegrossvalueceiling for thesmallestatesummaryadministrationprocedurebesetinitiallyat$50,000andincreasedlaterifconsideredappropriate.EstateAdministration

Thesectionofthereportdealingwithestateadministrationconsolidatesmuchofthecon‐tentof theEstateAdministrationAct and theProbateRecognitionAct.Muchof theEstateAdministrationAct ishighlyarchaic.Mostprovisions thathavebeencarried forward intothe reform legislationhavebeenredrafted in contemporary legislation language.Numer‐ousprovisionsthatareduplicative,coverednowbyrulesofcourt,orclearlyobsoletehavebeeneliminated.Somenewfeaturesare introduced intoBritishColumbiaprobateproce‐dureunderthedraftlegislation:• Anoticeofanapplicationforagrantofprobateoradministrationsenttobeneficiar‐

iesorotherpersonsinterestedinanestatewouldberequiredtocontainprescribedtextinformingtherecipientofthepossibilitythattheymayhaverightsinrelationtothe estate and the existenceof limitationperiods applicable to anyproceedings fortheirenforcement.ThiswasrecommendedbythewillsandestatesBarinthe1980s.

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BritishColumbiaLawInstitute—BCLIReportno.45 Page7of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006• Therewouldbea21‐daynoticeperiodbetweenthesendingofnoticeofanapplica‐

tion for probate or administration and the filing of the application. Currently sec‐tion120 (1)of theEstateAdministrationAct allowsnotice tobegiven concurrentlywiththefilingoftheapplication,whichmaytendtodefeatthepurposeofthenoticebydeprivingrecipientsofarealisticopportunity to takeappropriateadviceandactupon their rights vis­à­vis the application. The notice period could be abridged oreliminated by the court to enable issuance of a grant on an expedited basis whennecessary.

• Administratorswould no longer be required to provide a bond or obtain an orderdispensingwith it,unlessaminorormentally incapableperson is interested in theestate.Whensecurityisrequiredforthesereasons,itcouldtakeanyformacceptabletothecourt.Thischangereflectstherealitythatadministrationbondsaredifficulttoobtainandcanbedisproportionatelyexpensive,thoughthereisseldomaneedtore‐alizeuponthem.

• TheresealingprocedurenowfoundundertheProbateRecognitionActisretained,butwithrecommendationsthatitbeextendedtoallCanadianprovincesandterritories,theU.K.,Ireland,allCommonwealthjurisdictionshavingacommonlawlegalsystem,HongKong,andallU.S.jurisdictions.Currently,BritishColumbia’sregimeforreseal‐ingisthemostrestrictiveinCanadaintermsofthejurisdictionstowhichitextends.

AlternateSuccessionVehicles:Non‐ProbateBeneficiaryDesignations

Thedesignationofbeneficiariesunderlifeinsuranceandaccidentandsicknesspoliciesononehand,andundernon‐insuranceRRSPs,RRIFs,employeebenefitplans,andpensionsontheother,aregovernedbydifferentlegislationinBritishColumbia.Parts3and4oftheIn­suranceActgovernbeneficiarydesignationsunder insurancepolicies, includingsomean‐nuity‐typeretirementsavingsplansthatfitwithinthebroaddefinitionof“insurance”intheAct.Beneficiarydesignationsunderthenon‐insurancevehiclesaregovernedbyprovisionsnowcontainedintheLawandEquityAct.ThelegislativeschemeundertheInsuranceActismoresophisticated,complete,andflexi‐ble thantheLawandEquityActprovisions. Itallows irrevocabledesignations(an impor‐tantsecurityinstrumentinseparationagreementsandspousalandchildmaintenanceor‐ders).Italsoinsulateslifeinsuranceproceedsandaccidentandsicknesspolicydeathbene‐fitsagainstclaimsofcreditorsofthelifeinsured.Thisprotectionisnotcurrentlyavailabletobeneficiariesofnon‐insuranceRRSPsandRRIFs.ThereformlegislationinPartTwoofthereportcontainsprovisionsthatassimilatethere‐gimeapplicabletobeneficiarydesignationsundernon‐insurancevehicleswiththatfoundintheInsuranceAct.Inparticular:• Proceedsofnon‐insuranceRRSPsandRRIFspayable toadesignatedbeneficiaryon

thedeathofaholderwouldbeimmunetoclaimsofcreditorsoftheplanholder.(TheInsuranceAct also insulates the insured’s interest in a life or accident and sicknesspolicyfromexecutionorseizureduringtheinsured’slifetimewhileadesignationin

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BritishColumbiaLawInstitute—BCLIReportno.45 Page8of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006

favour of a family class beneficiary is in effect. This feature is not extended by thedraftlegislationtonon‐insurancevehicles,ascreditorprotectionduringlifewasnotconsideredtobeamatterofsuccessionlaw.)

• Planmemberswouldbeabletomakeirrevocabledesignations.• Designationsofbeneficiariescouldbemadeeitherbywrittendeclarationorwill,and

planmemberscouldalterandrevokethedesignations,whetherornotthetermsoftheplanexpresslyallowforit(subjecttopensionlegislationthatdirectsthedestina‐tionofsurvivorbenefits,whereapplicable).

Additionalchangesrecommendedare:• Anon‐insuranceplanmembercouldappointatrusteetoreceiveandholdplanpro‐

ceeds for a designated beneficiary,with payment to the trustee operating as a dis‐chargetotheplanadministrator.ThisisexpresslyprovidedforintheInsuranceAct,butauthority for the interpositionofa trustee is lacking in theLawandEquityAct,causingplanadministratorstobereluctanttoacceptdesignationsinvolvingtrustees.

• Legislativeconfirmationthatanattorneymaymakeabeneficiarydesignationonbe‐halfofthedonorofthepowerofattorney,ifthepowerofattorneyexpresslyauthor‐izesthis.Thevalidityofsuchadesignationunderapowerofattorneyisdoubtfulatthepresenttimebecausetestamentaryauthoritysupposedlycannotbedelegated.

SurvivorshipPresumptions

The recommendations contained in theLawReformCommissionofBritishColumbiaRe­portonPresumptionsofSurvivorshipin1982werefullyendorsedbytheProjectCommitteeandtheAlternateSuccessionVehiclesSubcommittee,andarereflectedinthedraftlegisla‐tioninPartTwo.Thecurrentgeneralpresumption,underwhichtheyoungerisdeemedtosurvivetheelderwhentwopeopledieatthesametimeorincircumstancesthatmakeit impossibletode‐terminewhichpersonsurvivedtheother,wouldbereplacedbyageneralpresumptionun‐derwhichtheestateofeachpersonwouldbedistributedasifheorshehadsurvivedtheother.Thiswillgenerallyresultinpropertydevolvingtothebeneficiariesordescendantsofeachdeceased,whileincasesofspousesorotherpersonswhohaveleftpropertytoeachotherthecurrentpresumptionmayresultinanentireestategoingtobenefittherelativesoftheotherdeceasedpurelyonthebasisofdeemedsurvival.Jointtenantsdyingatthesametimeorincircumstancesmakingituncertainwhetheronesurvivedtheotherwouldbedeemedtohaveheldthejointpropertyastenantsincommon,sothattheirrespectiveshareswoulddevolvetotheirownbeneficiariesordescendantsin‐stead of benefiting those of the other joint tenant on the basis of the legal fiction of“deemedsurvivorship.”Ageneralrequirementofaminimumoffivedaysofsurvivorshipbeforeentitlementwouldariseonintestacyorunderanytestamentarygift,jointtenancy,jointbankaccount,orother

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BritishColumbiaLawInstitute—BCLIReportno.45 Page9of9Backgrounder—Wills,EstatesandSuccession:AModernLegalFramework June2006dispositionofpropertydependingondeathforitsoperationisrecommended.Ifthebenefi‐ciary,jointtenant,orotherpartyintendedtobenefitdidnotsurvivethedeceasedforfivedays,heorshewouldbedeemedtohavepredeceased.Thisistofulfilltheusualintentionofatestatortobestowabenefitonaparticularbeneficiary,ratherthanthesuccessorsofthatbeneficiary.Manywillsspecifyaconsiderablelongerperiodofsurvival,e.g.15or30days,asaprerequisite to takingagift.The five‐daysurvivorshiprulewouldnotapply totheappointmentofanexecutor.Thesurvivorshippresumptionsaredefaultrulesthatcouldbedisplacedbyawillorotherinstrumentcontainingacontraryintent.MiscellaneousReforms

The Power of Appointment Act, which deals with illusory appointments in exercise of apowerofappointment,isredraftedinsimplerlanguage.Amendments to theEscheatAct areproposed to remove superfluousprocedural distinc‐tionsbetweenthetreatmentofescheatedrealpropertyandpersonalpropertypassingtotheCrownasbonavacantiaandtoclarifythattheActappliestoboth.ConclusionTheInstituterecommendsenactmentofthedraftWills,EstatesandSuccessionAct inPartTwoofthereportinthebeliefthatthisstepwillbringthelawofsuccessioninBritishCo‐lumbiaintokeepingwithcontemporaryrealitiesandprovideafunctionallegalframeworkforthetransferofpropertyondeathforaconsiderabletimetocome.