Alberta Court of Appeal upholds testator’s right to keep pre-death financial accounts confidential

Heirs claimed testator was unduly influenced to transfer assets before death

Alberta Court of Appeal upholds testator’s right to keep pre-death financial accounts confidential

The Alberta Court of Appeal has upheld a testator’s right to keep her pre-death financial life private and confidential by refusing to allow full financial disclosure of transfers she made during her lifetime.

Alice Duhn died in 2018, leaving seven children who had lived with her and her husband – who died in 2014 – on a successful farm in Alberta. Duhn had been left with her husband’s entire estate and she spent a great deal of that money on her children and grandchildren. By the time of Alice’s death, her estate was worth $4.5 million, allegedly several million less than it had been in 2014.

Duhn’s children and beneficiaries wanted to obtain full financial disclosure regarding transfers of money and assets she made during the last four years of her life. The children wanted to review her financial affairs and decisions she made prior to her death because they claimed that Duhn may have lacked capacity and was unduly influenced when the transfers were made.

The personal representatives of the testator – Duhn’s grandchildren – opposed the request for full financial disclosure. They argued that they had investigated and reported about Duhn’s assets as they existed at the date of her death. They were never instructed or authorized by the testator to review or investigate transactions made prior to her death, and there was no legitimate reason or duty to do so.

In Duhn Estate, 2022 ABCA 360, the chambers judge ruled that the personal representatives have the duty to review certain financial information of a testator in order to properly list their assets and, consequently, the representatives may have to account for pre-death financial transactions of the testator under certain circumstances. However, the court cautioned that these circumstances should be extremely limited, and only when favoured by a balancing of the testator’s rights to privacy and control over their estate.

The chambers judge found that it was improper to order further production of accounting information for the  four years prior to Duhn’s death because the applicants had not met the minimum evidentiary threshold to displace Duhn’s rights to keep her pre-death financial life private and confidential, as she clearly desired.

The applicants appealed from the chamber’s judge decision. The appeal court noted that Alice had left a carefully drafted will anticipating litigation. She added a no-contest clause, obtained extensive legal advice, and attended medical appointments to ensure capacity as she made careful decisions. The court carefully considered the decision and found no errors in the chambers judge’s refusal to allow further production of documents for accounting purposes.

The appeal court, citing case law, said “a claimant should not be able to put an estate to the needless expense of steps, such as documentary discovery, unless he or she meets the minimal evidential threshold.” The appeal court dismissed the appeal.

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