Which Jurisdiction’s laws will govern your estate?

Lauren Liang
Articles

Introduction

In our globalized world, it is not uncommon for people to own property or have residences in multiple jurisdictions. The international aspect of a deceased’s estate can add significant complications to the administration of the estate because succession laws in each jurisdiction may vary significantly. For example, in British Columbia, if a person dies without a will and is survived by a spouse, children and parents, the estate would be distributed to the spouse and children. This may not be the case in other jurisdictions. For example, in China, the surviving parents would also have an interest in the estate. Jurisdictions may also differ with respect to claims that can be made against the estate. For example, in British Columbia, a spouse or a child of a deceased can apply to court to vary the deceased’s Will if the Will did not make adequate provision for their proper maintenance and support. Other jurisdictions may not provide family members with similar rights. For these reasons, the determination of which law applies to an estate may make a significant impact on a person’s interest in an estate and his or her ability to make a claim against the estate.

In British Columbia and most common law jurisdictions, the conflict of laws principles distinguish between movables (personal property such as bank accounts) and immovables (such as real estate). For immovable assets, the governing law is the law of the jurisdiction where the immovable asset is located. For movable assets, the governing law is the law of the jurisdiction where the deceased was domiciled at the date of death.

Domicile

The term “domicile” means the jurisdiction that a person treats as his or her permanent home or lives in and has a substantial connection with. A person’s domicile can be straightforward to determine if the person dies having lived in only one place his or her entire life. However, if a person has lived in multiple places and has a connection to more than one jurisdiction, the determination of domicile can be more complicated.

Canadian courts determine domicile by reference solely to the lex fori, which means the law of the jurisdiction in which the action is brought. For instance, if a British Columbia court has to determine which laws apply to the estate of a deceased, the court will rely on the laws of British Columbia to determine the domicile of the deceased. If domicile is determined to be in another jurisdiction, then it is that jurisdiction’s law that applies to the deceased’s movable assets, and the British Columbia court can apply the law of the foreign jurisdiction if that law is pled and proven to the satisfaction of the court.

The law requires that each person must have a domicile, and only one domicile at any point in his or her life. The law attributes to each person at birth a domicile which is called a domicile of origin. The person’s domicile of origin remains the person’s domicile until they acquire a domicile of choice by taking up residence in another jurisdiction. A person’s domicile is independent of the person’s nationality: a person can change his or her domicile without changing his or her nationality. Similarly, a person can change his or her nationality without changing his or her domicile.

Establishing domicile of choice in a jurisdiction requires a person to establish residence in that jurisdiction, and to have sufficient intention to make that jurisdiction a permanent home. These two aspects of the test are discussed further below.

1. Residence

The person must actually reside in the new jurisdiction. It is not sufficient that he or she intends to live there in the future. Where a person has multiple residences, it is necessary to identify the person’s “chief” or “principal” residence in order to determine the person’s domicile. Factors that may be relevant in this analysis include:

  • Whether the residence is used for business, holiday or vacation purposes;
  • The relative amount of time spent in each residence;
  • The presence and extent of personal property;
  • The presence of family members, particularly spouses and dependants;
  • A pattern of return to that residence;
  • The economic link of the person to that residence;
  • Legal relationships to a jurisdiction;
  • Official identification and documentation;
  • Whether the residence is the contact point for the person; and
  • The person’s social integration with the community in which the residence is located.

2. Intention.

The person must intend to make the new jurisdiction his or her permanent home for the indefinite future. The acquisition of a domicile is completed as soon as the intention is formed. No subsequent change of mind, or doubts arising as to the wisdom of the move, can affect the domicile. In addition, once the acquisition of a domicile is complete, a temporary residence for the purposes of health, travel or business does not change the domicile.

Once a domicile of choice is acquired, it replaces any previous domicile of choice and the domicile of origin.

Case Study – Re Foote Estate

There have not been many cases devoted entirely to the determination of a person’s domicile. The benchmark Alberta Court of Queen’s Bench decision in Re Foote Estate, provides a comprehensive and detailed analysis of the law of domicile, and illustrates the elusive nature of the concept.

Re Foote Estate involved the estate of the late Eldon Foote, who died on May 14, 2004. The issue before the Court was where Mr. Foote was domiciled at the time of his death, which in turn would determine the law that would govern the distribution of his movable assets and whether his family would be entitled to make a claim against his estate.

Mr. Foote was born in Alberta and lived in Alberta from 1924 to 1967. He married his first wife while he resided in Alberta, his domicile of origin. In 1967, he started a business in Australia. From 1968 to 1970, he travelled in Australia, Japan and Europe building up his business. In 1971, Mr. Foote married his second wife and they built a home on Norfolk Island (an island approximately 1,000 miles east of Sydney, Australia). In 1977, he and his then wife both obtained permanent residency status on Norfolk Island.  During this marriage, they purchased a house in Victoria, British Columbia, which was primarily occupied by Mr. Foote’s son while he attended school in Victoria.

Mr. Foote divorced his second wife in 1981 and the house in Victoria was sold at that time. Mr. Foote married for the third time in 1984. From 1984 to the end of the 1980s, Mr. Foote and his third wife lived mainly in rented accommodation in Tokyo, Japan and on Norfolk Island in Australia. By the late 1980s, Mr. Foote started to spend more time on Norfolk Island and his third wife was granted permanent residence status on Norfolk Island in 1996. From 1997 to 2000, Mr. Foote and his third wife spent time on Norfolk Island, in mainland Australia and in Canada. In 2000, Mr. Foote obtained a second home in Victoria, British Columbia and the couple spent time there the next few summers. Around this time, Mr. Foote also made plans to sell his home on Norfolk Island, although he never advertised it or listed it for sale. In April 2004, Mr. Foote was diagnosed with cancer and travelled to Edmonton to receive treatment, where he died in May 2004.

The Alberta court ultimately held that Mr. Foote died domiciled in Norfolk Island, and the law of Norfolk Island would govern the administration of his estate. The court found that Mr. Foote had acquired a domicile of choice there by at least 1972, and he had not abandoned it prior to his death. Even though Mr. Foote had established a second home in Victoria, he had not acquired a domicile of choice there because he lacked the necessary intention to settle in British Columbia indefinitely. The court held that although his intention to relocate to British Columbia was real, it remained in an uncertain form as he had no specific time-line for the relocation and the groundwork for the move remained notional. In addition, the tipping-point where attachment to the Victoria residence surpassed the Norfolk Island residence was not reached.

The court also rejected the argument that Mr. Foote had a plan to return to Edmonton to die in the land where he was born and implemented that plan once the seriousness of his medical condition was known to him. The court held that although at some point Mr. Foote made a conscious decision to spend the rest of his days in Edmonton, it was not a deliberate decision to live in Edmonton when he had no alternative choices.

Conclusion

The issue of domicile can have a significant impact on the administration and distribution of an estate. If you are involved in an estate (either as an executor or as a potential beneficiary) and the estate has one or more foreign aspects to it, you should consider seeking legal advice if you have any doubt about which laws govern the estate.