Estate and Inheritance Disputes: Sibling Rivalry Edition

All siblings argue, but what happens when the argument takes place in a court room? Who pays for the litigation?

Estate matters can pit siblings against each other. A parent may leave their estate in the hands of one child to the exclusion of others. Historically, in Alberta, the estate was responsible for paying the legal expenses of the parties involved in litigating a dispute. With that historical approach, there was no risk to bringing a claim against a sibling; even if you lost and the claim was unreasonable, the estate was responsible for paying your legal costs.

However, in Schwartz Estate v Kwinter, 2013 ABQB 147 (”Schwartz Estate”), the Court held that estate litigants may be responsible for costs in their personal capacity when the entire litigation was “entirely devoid of merit, from start to finish. [The defendants] had not a whit of credible evidence to substantiate their allegations” (at para 11). The Court further added that the defendants had spent eight years litigating “on what can best be described as a enormous fishing trip, looking for an arguable case which never materialized” (at para 14). In their eight years of litigation, the defendants had spent $1.8 million in solicitor and client costs and were seeking reimbursement from the estate. The Court summarized the law at para 113:

In estate litigation, I have no doubt that the so-called “modern rule” applies, such that costs in estate litigation are now be treated in a similar fashion as to costs in other civil litigation. The old starting point that the estate should bear the costs of litigation has been replaced with the principle that the parties will normally bear costs as they would in other types of civil litigation, unless the challenge to the will or estate was reasonable, even though eventually unsuccessful.

The defendant’s application for costs was dismissed as their position “had no reasonable basis” (at para 199). Further, the Court awarded punitive costs against the defendants for their “frivolous and vexatious application” pursuant to Surrogate Rule 90(h) (at paras 198-199).

The defendants in Schwartz Estate tried to argue that the will of the deceased was misunderstood. However, their allegations went unsubstantiated, highlighting the importance of careful estate planning and having a properly drafted will by an experienced wills and estates lawyer.

If you want to ensure that your estate will be distributed according to your wishes, consult with a wills and estate lawyer at Vogel LLP today.