Parchen Estate (Re), 2016 ABQB 345

Court of Queen ’ s Bench of Alberta Citation: Parchen Estate (Re), 2016 ABQB 345 Date: 20160621 Docket: ES03 142361 Registry: Edmonton Court File Number ES03 142361 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial Centre Edmonton Estate Name Alexander Parchen Applicant (Plaintiff) Ailie Parchen Respondents (Defendants) Michael Symchuk, Valerie Symchuk and Sherry Walker _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice Dawn Pentelechuk _______________________________________________________ I.

Introduction [ 1 ] Alexander and Ailie Parchen were married almost 57 years before Mr. Parchen’s death on August 18, 2014 at the age of 80 years. Mr. Parchen died testate and Ms. Parchen argues that he did not adequately provide for her in his Will. She brings an Application under the Wills and Succession Act , SA 2010, c W-12.2, s 85 to have Mr. Parchen’s entire estate awarded to her. [ 2 ] In support of the Application, I have Ms. Parchen’s Affidavit, sworn June 4, 2015. The Personal Representative of Mr.

Parchen’s estate, who opposes the Application, filed a C2 Affidavit sworn March 22, 2016. [ 3 ] Ms. Parchen filed a Supplementary Affidavit containing a statement respecting her income, assets and liabilities on June 7, 2016.

The Personal Representative filed a Supplementary Affidavit on June 13, 2016 providing updated information on the Estate’s assets and liabilities, including costs related to preparing the matrimonial home for sale. [ 4 ] In my Interim Order of April 8, 2016, I ordered that the matrimonial home be prepared and listed for sale on a 60-90 day closing unless the parties agree to an alternative timeline. To date, the property has yet to be listed. II.

Background [ 5 ] I will briefly outline the facts as I have found on the evidentiary record before me. [ 6 ] Alexander Parchen executed his last Will and Testament on February 26, 2014. He appointed his son-in-law, Michael Symchuk, as his Personal Representative. Confirmation of Mr. Parchen’s capacity was provided by Dr. E. Toderovich on February13, 2014. [ 7 ] Mr. Parchen’s estate is worth approximately $440,430. The main asset of the estate is the matrimonial home, a 16-acre acreage in Westlock, worth approximately $380,000. I will refer to this property as “the acreage”.

The remainder of the estate is comprised of approximately $20,700 in vehicles and farm equipment, $34,050 in cash, and $6,000 in jewellery. The estate’s only outstanding debt is $320 in credit card debt. [ 8 ] A Grant of Probate was issued December 16, 2014. To date, none of the estate has been distributed. Curiously, the Grant of Probate indicates that Mr. Parchen’s two daughters, Valerie Symchuk and Sherry Walker, are not children of Ms. Parchen. Also, the Grant of Probate does not list Mr. Parchen’s two sons as surviving children. [ 9 ] In his Will, Mr. Parchen provided Ms.

Parchen with a life interest in the property, with a gift over to his two daughters Valerie Symchuk and Sherry Walker, of his half interest in the acreage on the death of Ms. Parchen. Ms. Symchuk and Ms. Walker were given equal shares in the residue of Mr. Parchen’s estate. [ 10 ] Mr. Parchen was diagnosed with cancer in the spring of 2005. He left the matrimonial home and moved to Edmonton in May of 2013. [ 11 ] Prior to preparing his Will, Mr. Parchen took steps to sever his relationship with Ms. Parchen. He severed the joint tenancy in the acreage.

He separated his senior’s benefits and Alberta Health Care from those of Ms. Parchen. In 2013, he filed his Income Tax Return showing his status as “separated”. [ 12 ] Mr. Parchen commenced divorce proceedings, through legal counsel, on February 14, 2014, shortly before he prepared his Will. Ms. Parchen filed a Statement of Defence and Counterclaim, but the divorce was not finalized before his passing. [ 13 ] Ms.

Parchen’s monthly income is $1908.94, comprised of CPP, Old Age Security and the Alberta Senior’s Benefit. [ 14 ] She wishes to move into a senior’s lodge arguing that managing the matrimonial home presents an unreasonable physical challenge for her. She investigated costs associated with Pembina Lodge, managed by the Westlock Foundation. She prepared a budget showing a deficit of $955.50 per month if she moves there. [ 15 ] Ms. Parchen provided a budget estimating her current average monthly expenses living alone at home.

Her current living arrangement results in total expenses of $2,457.98 per month, leaving a monthly deficiency of $549.04. She has no outstanding debts. Her assets include her half-interest in the matrimonial home, several vehicles and pieces of farm equipment valued at $23,750, cash assets of approximately $17,584.32, and some jewellery valued at approximately $8,400. III. The Law a. Automatic Revocation on Divorce [ 16 ] Mr. Parchen died testate, but had taken steps to initiate divorce proceedings and teriminate his relationship with Ms. Parchen prior to his death.

Section 25 of the Wills and Succession Act indicates that a will is automatically revoked by a divorce or termination of an adult interdependent partnership. Critically, subsection 3 further clarifies the specific circumstances in which this provision will apply: 25(3) This

section applies only in respect of the will of a testator (

a) whose marriage is terminated by a divorce judgment or found to be void, or (

b) who becomes a former adult interdependent partner on or after February 1, 2012, and applies regardless of when the will was made. [Emphasis added.] [ 17 ]

Section 63, which falls under

Part 3 of the Wills and Succession Act governing intestate succession, states: 63(1) For the purposes of this Part and section 13(1)(b)(

i) of the Estate Administration Act, the surviving spouse of an intestate is deemed to have predeceased the intestate if the intestate and the surviving spouse (

a) had been living separate and apart for more than 2 years at the time of the intestate’s death,

... (2) Subsection (1) does not apply to a surviving spouse who reconciled with the intestate if the reconciliation was subsisting at the timeof the intestate’s death. [18] This

section applies only to intestate succession, and there is no equivalent

section in

Part 2 of the Act, which governs testatesuccession. On its face,

section 25 is clear that a will is automatically revoked upon the granting of a divorce judgment, and not sooner. [19] It is unclear why the Legislature added

section 63 to

Part 3 of the Act, and not

Part 2. In 1994, the Alberta Law ReformInstitute released a report recommending that the Wills Act, RSA 2000, c W-12 be amended to allow for wills to be revokedautomatically by divorce (Alberta Law Reform Institute, “Effect of Divorce on Wills” (Edmonton: ALRI, November 1994)). The reportconsidered whether any event short of the granting of a divorce decree should be sufficient to revoke a will.

The Law Reform Instituteconcluded that: ... the further back from final termination one moves the triggering event, the less certain one can be that revocation of spousal gifts andappoints will be in accordance with the testator’s actual intentions.

Moreover, if something other than a precisely defined, formal eventsuch as a decree absolute of divorce...could serve as a trigger, it might not always be readily apparent whether the triggering event hasactually occurred” (at 23). [20] While the Legislature did not immediately adopt the Law Reform Institute’s recommendations in 1994, the construction of thepresent-day Wills and Succession Act is similar to the Law Reform Institute’s recommendation in that both set the granting of a divorcejudgment as the “trigger event” for revoking the will.

One of the major differences between testate and intestate succession is that theformer relies on evidence of the testator’s intent, while the latter distributes property in accordance with the statutory framework. It ispossible that an equivalent to

section 63 was not included in

Part 2 out of an abundance of caution to respect the testator’s expressintentions. [21] The issue of whether anything short of the granting of a divorce judgment can be sufficient to automatically revoke a will hasbeen judicially considered in other jurisdictions. For example, Ontario’s Succession Law Reform Act, RSO 1990, c S.26, s 17(2) revokeswills when the testator’s “marriage is terminated by a judgment absolute of divorce or is declared a nullity.” In Re Kindl (1982), (ON SC), 39 OR (2d) 219 (H Ct J), the testator’s wife had petitioned for divorce a year prior to the testator’s death.

Adecree nisi was granted, but the decree absolute had not yet been granted at the time of the testator’s death. The Court found that “[i]fthe petitioner or respondent in a divorce action dies before a decree nisi is made absolute, the survivor is a widow or widower”: at para13.

Since the decree absolute had not been granted as of the date of the testator’s death, the Court ruled that section 17(2) “does notapply so as to nullify the bequest made by the testator to his wife”: at para 24. [22] Overall, the statutory language is clear: in the absence of a divorce judgment or a positive step to revoke bequests made to aseparated spouse, the testator’s will remains in force. b. Entitlement to Maintenance and Support [23]

Part 5 Division 2 of the Wills and Succession Act allows the distribution under a will to be altered to provide for the propermaintenance and support of a family member. [24] The leading decision of Tataryn v Tataryn Estate, (SCC), [1994] 2 SCR 807 discusses a number of principleswhich were neatly summarized by our Court of Appeal in Koma v Tomich Estate, 2011 ABCA 186, 505 AR 372 at para 17: - What is "adequate" goes beyond the bare "necessities", and the statute does not contemplate a "needs-based" test.

An awardunder the Act can take account of the family's lifestyle and the claimant's realistic expectations; - The statute attempts to balance the interests of testamentary autonomy with the need to provide economic protection to survivingfamily members. Neither of these values can outweigh the other. Where possible, the court should attempt to recognize both interests; - An award under the Act should not only consider the legal obligations of the deceased towards the family, but should also haveregard to the moral obligations of the deceased.

The law recognizes a moral obligation to a surviving spouse and dependent children, anda lesser obligation to adult children; - What is "adequate" must be measured against contemporary community standards, having regard to what "a judicious personwould do in the circumstances, by reference to contemporary community standards"; - The extent to which all the legal and moral claims can be met will depend on the size of the estate.

On the other hand, becausethere is no longer any need to provide support for the deceased, the surviving family members may be entitled to more than the supportthey would have received during the deceased's lifetime; - The statute gives the court a wide ranging discretion [Citations omitted.] [25] While the Koma decision was based on an

interpretation of the predecessor to the Wills and Succession Act, Bensler J’sdecision in Re McKenna Estate, 2015 ABQB 37, 5 ETR (4th) 144 affirms that the relevant wording with respect to a claimant’sentitlement to maintenance and support remains “substantially the same”: at para 16.

Therefore, the principles enumerated in Tatarynand Koma remain instructive when determining maintenance and support entitlements under the present legislative framework. [26] The distinction between “legal” and “moral” obligations was explored by Moen J in Petrowski v Petrowski Estate, 2009ABQB 196, 466 AR 59: at para 445: The legal obligations are those that would be imposed by law on a testator during his lifetime if the claimant made an application for

support.

The moral obligations are those found “... in society's reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards.” [Citing Tataryn at 820-21]. [ 27 ] Legal obligations take priority over moral obligations, and moral obligations will “vary in strength on the basis of social expectation.” Only a minimum threshold must be reached to satisfy the testator’s moral obligations – otherwise, “the testator’s wishes are to remain undisturbed”: Petrowski : at para 452 . [ 28 ] In Re Broen Estate , 2002 ABQB 806 , 324 AR 396, the claimant widow had contributed all of her assets, income and labour towards the operation of the family farm for the preceding 16 years.

When her husband died intestate, his two estranged daughters from a previous relationship claimed entitlement to the bulk of the estate through the Intestate Succession Act . Acton J found that the widow’s moral claim to maintenance and support was significant due to the many years she spent “building up the estate in anticipation of their retirement”: at para 19, while the competing moral claims of the estranged daughters were “extremely low”: at para 20.

The entire estate was transferred to the widow on the basis of the strength of the deceased’s legal and moral obligations. [ 29 ] In Re Boychuk Estate , 2008 ABQB 38 , 439 AR 313, the testator left everything to two of his adult children, and nothing to his wife of 71 years. The size of the estate was very small, and evidence showed that the widow’s assets were sufficient to provide for her continuing care. Nevertheless, Macklin J ruled that neither of these factors “eliminate the legal obligation the deceased had for the adequate support of his wife”: at para 28.

In determining the extent of the widow’s entitlement, Macklin J found that her legal entitlement was for half of the estate, but her moral entitlement gave her a right to the estate in its entirety: at para 31. Accordingly, the widow received the entire estate. [ 30 ] The Court in Tataryn noted that the fact that one spouse outlived the other gives rise to a high moral claim for support “in the ‘extra years’ which fate has accorded [the surviving spouse]”: at p 824. This same principle was echoed by Acton J in Broen at para 19 in justifying the widow’s moral entitlement to maintenance and support.

In Koma at para 28 , the Court of Appeal acknowledged that a surviving spouse has both legal and moral entitlements to support. Again, so long as the testator provides for support within an acceptable range, the testator’s wishes should not be disturbed: Koma at para 30 ; Tataryn at p 823-24. [ 31 ]

Section 93 of the Wills and Succession Act identifies several factors that must be considered by the Court in an Application for maintenance and support by a family member: (

a) the nature and duration of the relationship between the family member and the deceased, (

b) the age and health of the family member, (

c) the family member’s capacity to contribute to his or her own support, including any entitlement to support from another person, (

d) any legal obligation of the deceased or the deceased’s estate to support any family member, (

e) the deceased’s reasons for making or not making dispositions of property to the family member, including any written statement signed by the deceased in regard to the matter, (

f) any relevant agreement or waiver made between the deceased and the family member, (

g) the size, nature and distribution of (

i) the deceased’s estate, and (ii) any property or benefit that a family member or other person is entitled to receive by reason of the deceased’s death, (

h) any property that the deceased, during life, placed in trust in favour of a person or transferred to a person, whether under an agreement or order or as a gift or otherwise, and (

i) any property or benefit that an individual is entitled to receive under the Matrimonial Property Act , the Dower Act or Division 1 of this Part by reason of the deceased’s death, [ 32 ] This list is not exhaustive and the Court may consider any other matter relevant. IV. Analysis [ 33 ] Mr. Parchen died testate, and the will’s formal and essential validity is not contested. While he took steps to initiate divorce proceedings, a divorce judgment had not been granted as of the date of his death. Following

section 25 of the Wills and Succession Act and the decision in Re Kindl , Mr. Parchen’s Will continues to govern the distribution of his estate as it was not revoked automatically prior to his death. Therefore, the intestacy provisions of the Wills and Succession Act are inapplicable in this case, but in any event, I note that Mr. Parchen moved out of the matrimonial home approximately15 1/2 months before his death. While Ms. Parchen denies that this constituted a formal separation, the parties were not separated for the two-year threshold prescribed in

section 63 to deem the surviving spouse to be predeceased if the deceased died intestate. [ 34 ] I will now go through the enumerated factors for determining entitlement to maintenance and support under

section 93 of the Wills and Succession Act : i. The Nature and Duration of the Relationship [ 35 ] Mr. and Ms. Parchen were married for 57 years. Mr. Parchen had commenced, but not finalized, divorce proceedings before

he passed away. [ 36 ] Despite the physical separation of Mr. and Ms. Parchen since May 2013, Ms. Parchen argues this should be treated as a mere five month separation. She deposes she was caught by surprise when she was served with divorce papers. Whether the parties were separated for five months or 15 1/2 is irrelevant – the parties remained legally married at the time of the testator’s death. Mr. Parchen clearly had a legal and moral obligation to provide financial support to his wife. However, I am of the view that the steps Mr. Parchen took to sever his relationship with Ms. Parchen cannot be ignored.

This provides some good explanation for why he chose to not leave his entire estate to her. ii. Ms. Parchen’s Age and Health [ 37 ] Ms. Parchen is 75 years of age. She deposes that she recently underwent knee surgery and must now have her other knee replaced. She deposes she is not physically capable of maintaining the acreage. Ms. Parchen’s evidence is not supported by any medical evidence nor does her Affidavit even reference when she had her first knee surgery. In argument, the Court was advised that her surgery occurred May 5, 2015. The Personal Representative does not dispute this.

The paucity of evidence on this point leaves unanswered questions. How did Ms. Parchen maintain the acreage from May 2013, when Mr. Parchen moved to Edmonton, until May of 2015 when she underwent surgery? Was her knee replacement surgery successful and did it increase her level of functioning? Has her second knee surgery been scheduled? iii. Ms. Parchen’s capacity to contribute to her own support [ 38 ] Ms. Parchen filed a sworn statement of income, assets and liabilities on June 7, 2016. Ms. Parchen’s monthly income is $1908.94 through CPP, Old Age Security and the Alberta Senior’s Benefits.

She also lists capital assets including her interest in the matrimonial home valued, various vehicles and pieces of farm equipment either solely or jointly owned valued at approximately $23,750, cash assets of approximately $17,584.32, and jewellery valued at $8400. She has no outstanding financial liabilities. Counsel for the estate advised me in a letter dated June 13, 2016 that they did not have an opportunity to review the Applicant’s statement before it was filed. There is some uncertainty as to whether Ms.

Parchen also has an RBC account in her name as this was not addressed in her sworn statement. [ 39 ] Overall, while Ms. Parchen’s income and assets are modest, she does have some independent financial capacity to support herself. Her desired living arrangement leaves her with a monthly shortfall of approximately $955.50, so she will have no choice but to draw down her capital assets, including her share of the sale proceeds from the matrimonial home. iv. Legal obligation of Mr. Parchen to support Ms. Parchen [ 40 ] Clearly, Mr. Parchen had a legal obligation to provide for his wife of 57 years.

Had the parties finalized their divorce, her entitlement would have been determined by the Matrimonial Property Act , the Dower Act and the law of constructive trusts. Again, the evidence is scant, but I am advised Ms. Parchen assumed the role of traditional homemaker and provided some bookkeeping services to Mr. Parchen for his business. They raised four children. She would be entitled to at least an equal division of the matrimonial property. Given Mr. Parchen’s failing health and advanced age, he would be precluded from making any significant support payments. [ 41 ] Conversely, Mr.

Parchen has no legal obligation to support his two daughters. All the children are independent and self- sufficient. v. Mr. Parchen’s reasons for not making a disposition of property to Ms. Parchen [ 42 ] The uncontroverted evidence of the Personal Representative is that the relationship between Mr. and Ms. Parchen had been strained for a significant period of time. Ms. Parchen rarely visited Mr. Parchen when he resided in Edmonton, notwithstanding that she had a car and a valid driver’s license. Conversely, Michael and Valerie Symchuk spoke to Mr.

Parchen approximately five times a week and they were the ones to accompany Mr. Parchen to his doctor’s appointments and dialysis treatments. vi. Any relevant agreement or waiver made between Mr. and Ms. Parchen. [ 43 ] There is no agreement or waiver in this case. vii. Nature and distribution of Mr. Parchen’s estate [ 44 ] Mr. Parchen’s estate is modest but not insignificant. The total value is approximately $440,430. The acreage has been appraised at approximately $380,000. [ 45 ] The budget put forward by the Applicant to move to Pembina Lodge is modest, and is not unreasonable.

The cost of moving to the lodge would outstrip her modest financial resources, however, leaving her unable to move without additional financial support. [ 46 ] Like the Testator in Koma , Mr. Parchen did not completely ignore his legal and moral obligations to Ms. Parchen. He provided housing for her by providing her with a life estate in his half-interest in the acreage. [ 47 ] On the uncontroverted evidence before me, it was Mr. Parchen’s daughters and son-in-law, not Ms. Parchen, who provided him with companionship and care in his later years during his failing health.

It is understandable and in my view, it is not inappropriate for him to recognize a moral obligation to his daughters for the assistance they provided while he was ill. [ 48 ] It is unclear if Ms. Parchen has executed a Will, and if so, who she has listed as her beneficiaries. The parties did not execute mutual wills, so Ms. Parchen is free to execute her own will at any time. [ 49 ] This Application involves competing values of testamentary autonomy and the legitimate claims of a surviving wife: In

Petrowsky , at para 42 the Court noted that legal obligations generally have priority over moral obligations, while moral obligations vary in strength on the basis of social expectation. Provisions in a Will are adequate when they meet a minimum threshold.

It is only where the testator has chosen an option which falls below his obligation as defined by reference to legal and moral norms, should the Court make an order which achieves the justice the testator failed to achieve. [ 50 ] The facts in this Application can be distinguished from those in Broen Estate where the Applicant had worked side by side with her husband for many years building up the estate in anticipation of her retirement. She provided many years of support and labour on the family farm and personally nursed her husband in the last years of his life, but received nothing under the Will.

The case is also factually distinguishable from Re Boychuk Estate which involved a 91 year old Applicant married for 71 years and an extremely small estate. V. Conclusion [ 51 ] In my view, to award the entire estate to the Applicant outright would not give proper effect to testamentary autonomy and Mr. Parchen’s desire to recognize his two daughters who provided care and companionship in his failing years.

In Koma , the Court recognized that the Court has significant discretion to craft a just Order. [ 52 ] At the conclusion of the Application, the parties agreed that the property would be listed for sale on terms agreed upon. There is uncertainty on whether Ms. Parchen’s half interest in the home (approximately $180,000) will be adequate to supplement her income and allow her to move to a senior’s residence for the duration of her lifetime.

Furthermore, counsel for the estate has indicated that a significant amount of work must be done on the property to prepare it for sale, and that the valuation may be out of date given the current economic downturn. Therefore, it is likely that the parties will realize less than $180,000 each from the sale of the property. [ 53 ] Upon sale of the house, Ms. Parchen will be entitled to proceeds equivalent to her half-interest in the matrimonial home. She has expressed a desire to move into Pembina Lodge.

She deposes she will have a deficit of $955.50 per month. [ 54 ] Since it is unclear what the net proceeds will be from the sale of the matrimonial home, it is uncertain whether Ms. Parchen’s half-interest will be sufficient to cover the $955.50 monthly deficiency if it is invested in an annuity. Ms. Parchen provided an annuity quotation from Manulife Investments dated May 12, 2015, but this is now out of date and was based on erroneous assumptions. [ 55 ] In short, I am not convinced that the Applicant requires the entirety or any additional portion of Mr.

Parchen’s estate to provide for her adequate maintenance and support. [ 56 ] Rather, the solution embraced by the Court of Appeal in Koma appears to be a practical solution. Since the parties have already agreed to sell the property, I direct that Ms. Parchen’s share of the net sale proceeds be released to her as soon as the sale closes. The costs borne by the estate to date to prepare the property for sale, the realtor’s commission and legal fees for the sale shall be deducted pro rata from both parties’ half-interests in the matrimonial home. Ms.

Parchen will have three months from the date the net proceeds are distributed to make another application to this Court. In that application, she must provide a new quote from Manulife Investments answering the following questions: 1) If Ms.

Parchen’s share of the sale proceeds is invested in an annuity, can the annuity be guaranteed for the remainder of her life paying out a minimum of $1000 per month? 2) If the annuity cannot be guaranteed for life at the rate of $1000 per month, how long can it be guaranteed for? 3) If the annuity cannot be guaranteed for life, how much more would be required in the principal investment to allow for the annuity to pay out $1000 per month for the rest of Ms. Parchen’s life? [ 57 ] If Ms.

Parchen’s share of the proceeds from the sale of the matrimonial home is sufficient to give her a guaranteed annuity that covers her monthly shortfall, then Mr. Parchen’s estate has no obligation to provide her with any additional support. If it is arguable that Ms. Parchen’s share is insufficient to establish such an annuity, she may apply to this Court for additional maintenance and support from Mr. Parchen’s estate to bring the annuity up to the level required to guarantee it for the remainder of her life. If Ms.

Parchen fails to bring an application within the three month period specified above, then she will not be entitled to any additional support from Mr. Parchen’s estate. The residue of Mr. Parchen’s estate shall be distributed to his two daughters, in accordance with his Will. [ 58 ] Legal costs for the application up to this point shall be paid by the estate, and are subject to review by an Assessment Officer at the discretion of either party; however, costs for any future application are in the discretion of the judge hearing it. Heard on the 8 th day of April, 2016.

Dated at the City of Edmonton, Alberta this 21 st day of June, 2016. Dawn Pentelechuk J.C.Q.B.A.

Appearances: Michelle Gallagher of Patriot Law Group for the Applicant Jessi Ritchie of Liddell Law Office for the Respondents