Throughout life, the relationships between our family and friends often change depending on where we are sitting in life’s timeline. Age, where we live, family dynamics, lifestyle and so much more determines the strength or weaknesses of all of our relationships. As we age, our children move out of the home, our social status changes for better or worse, and friends move away and new friendships form to fill the void of the old ones. With all these moving variables, it should really come as no surprise that who we choose to bequeath our wealth to can also change. Changing where our wealth ends up at the end of our lives can be as simple as changing a name. However, situations can arise that can impact how someone’s wealth is left to another. The case below discusses one such instance where a valid contract prevented a will-maker from changing the beneficiaries of her estate in her will.
In the 1990s, Jessie James came to know both Fonda Munro and her spouse, Bruce Boughey through their mutual interest of horses. The parties first began socializing at pony shows and events and became good friends over the years. Ms. James was a realtor who was interested in breeding ponies in her retirement. Mr. Boughey and Ms. Munro also raised ponies, and Ms. Munro was an equestrian coach.
When Ms. James learned that her friends were looking to move in to a larger property to accommodate their horses, Ms. James offered for them to move on to her 63-acre farm property. In exchange, Ms. James asked her friends to provide help around the farm and to manage the property.
The parties came to an agreement whereby Ms. Munro and Mr. Boughey would pay Ms. James $100,000 to build a home on her property, and they would then take care of the farm and the horses. In exchange, Ms. James agreed to make a will where she would leave everything in her estate to her friends.
Ms. Munro and Mr. Boughey moved on to Ms. James’ property and took care of the farm for many years. However, the friends started to grow apart and the relationship eventually deteriorated. After ten years, Ms. James wasn’t happy with how things were going and made a new will which benefitted a different close friend. When Ms. James informed Ms. Munro and Mr. Boughey that she intended to make this new will, they filed a court claim alleging a breach of contract. Ms. Munro and Mr. Boughey sought to uphold Ms. James’ original promise to name them as beneficiaries in her will.
As Ms. James had told Ms. Munro and Mr. Boughey in advance that she wanted to end the agreement, this was deemed an “anticipatory” breach. Ms. Munro and Mr. Boughey had two choices. They could accept the end of the contract seek damages for their loss, or they could refuse to accept the change and ask Ms. James for specific performance, being to follow through on what was contracted. Ms. Munro and Mr. Boughey sought specific performance of the contract.
The court reviewed the terms of the contract and found that the contract was, in fact, valid. At the heart of it, this was a contract for services. Ms. Munro sought the assistance of her friends to help out around the farm and, in exchange, she would pay them through her estate. A lawyer drafted up the contract. Both parties signed the agreement and continued to follow the contract for many years. When Ms. James decided to change her will, she breached her end of the contract.
The court agreed that the contract should be preserved. The plaintiffs were to continue their care and obligations, and they were entitled to receive Ms. James estate on her death.
This case was a great example of how changing a will may not void a contract that is specifically tied to it. If a will is changed in order to manipulate an existing contract in some way or another, that change may be considered a breach of that contract. At that point, you are entitled to damages or you can seek an order for the parties to comply with the contract. Either way, a valid contract does not become void simply because one party changes their mind.
If you have questions on this topic or other estate related issues, feel free to get in touch with our lawyer, Chelsea Dubeau today.
Case reference: Munro v James, 2020 BCSC 1348