Financial advisors and financial planners in British Columbia should be prepared to face the most comprehensive overhaul of the province’s estates legislation in almost a century.

Under the new regime, which will come into force later this year, advisors could face a host of new challenges, ranging from their role in advising elderly clients who may be intellectually impaired to an increase in lawsuits over the settlement of estates.

One of the key new provisions of the new Wills, Estates and Succession Act deals with “undue influence” in will-making. Under that provision, the burden of proving that there was undue influence on a will-maker shifts from placing the burden of proof on the person alleging undue influence, under current law, to the person being accused of using undue influence.

Under the new law, the accused person must prove that the will was freely made. When the new legislation comes into force later this year, it will apply to existing wills.

“It’s a brand new provision which could serve as a red flag for a financial advisor by warning that there may be delays and other problems down the road if this section comes into play when an estate is being settled,” says lawyer Mary-Jane Wilson, a partner with Surrey, B.C.-based Wilson Rasmussen LLP who specializes in estate law. “Any kind of lawsuit is definitely going to delay an estate settlement. Financial planners should be aware of this new rule.”

Essentially, some beneficiaries could find themselves in the hot seat if a B.C. will is challenged. As Wilson explains: “Under Section 52 [of the new legislation], where a person [the challenger] establishes that a party was in a position where there was potential for dependence or domination of the will-maker, and alleges that a gift in the will resulted from that party using this position to unduly influence the will-maker, the onus is now placed on the party seeking to uphold the gift to establish that the will did not result from undue influence.”

Sally Dennis, who heads the wealth-management division of Vancouver-based law firm Farris, Vaughan, Wills & Murphy LLP, says this section has been included in the new legislation to provide better protection for elderly will-makers. “You have many examples today of suspected elder abuse as the population ages and older people become more dependent on others.”

Under the current law, the person making the accusation of undue influence won’t necessarily have all the facts, Dennis explains. But someone such as a caregiver who has been accused of coercion is likely to have all the facts.

“I think Section 52 is an im-provement because it better protects the will-maker,” Dennis says. “And, after all, a will really should reflect somebody’s true wishes.”@page_break@However, she notes, the new law should not cause advisors undue concern. “In their normal day-to-day work, most financial planners are dealing with middle-age clients and not so much with elderly clients,” she says. “So, I don’t think they need to be overly stressed about the new legislation.”

This new “burden of proof” provision, while perhaps one of the more dramatic changes, is only one in a new statute with 271 sections that gathers together seven existing pieces of legislation into one omnibus bill. It has been the subject of extensive consultation, including a comprehensive study by the B.C. Law Institute that began in 2003.

“There are a great many changes,” says Greg Blue, a senior staff lawyer with the institute, “because this is a major reform of B.C. succession law.”

The new legislative regime is based largely, but not completely, on the BCLI’s three-year succession law reform project and its 2006 report: Wills, Estates and Succession: A Modern Legal Framework (available at www.bcli.org). The act was passed in September 2009, and will probably come into force by this autumn.

The intent of the new law is to update and streamline B.C. succession law, Blue adds. One of the goals in the vast overhaul is to make the province’s succession law easier for the public to understand. This is likely to be of particular importance in a province that is chosen by many Canadians as their preferred location for retirement.

A paper prepared by the B.C. Ministry of the Attorney General in support of the new legislation also notes that changing demographics triggered many of the changes, particularly the generally expanding elderly population and the increasing dependency of that population on others. (Indeed, the fastest-growing age group in Canada is people who are more than 100 years old.)

Other key changes that advisors will want to be aware of include new rules regarding intestacy, as well as ways to ensure a deceased person’s last wishes are respected, even if they are contained in a document that does not meet the requirements to be considered a will.

There will also be faster and easier ways to administer estates of less than $50,000.

“Regardless,” Blue says, “anyone advising people on their estates, including financial planners, needs to make sure the will-maker is acting independently. The key here is to make sure the will can stand up and won’t be revoked.

“And,” he adds, “when financial planners are acting on behalf of beneficiaries, they’ll also want to make sure the beneficiary is squeaky clean in regard to undue influence.”

Some of B.C.’s top wills and estate practitioners were involved in preparing the new legislation, and the consultations and feedback included participation from a range of estate and financial planners.

The B.C. government says that the new legislation will not invalidate wills made before the law comes into force but will apply to their interpretation. IE