Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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In Re Brooks Estate, 2011 BCSC 1606 (CanLII), a testator left a handwritten will in which he left his real property and two bank accounts to his “brother … Executor with Power of Attorney”. He goes on to list five other people and states “I would all the people named above to share equally in my estate [sic].”

The Estate Trustee applied for directions on the interpretation of the Will. Did the real property and accounts pass to the brother, or where they to be divided equally amongst the brother and the five other named beneficiaries?

Important to the decision was the fact that the real property and accounts made up the bulk of the estate.

What did the court do? The court found that the estate was to be divided amongst the five named beneficiaries and the Estate Trustee. The court noted that extrinsic evidence could be used to interpret the Will if there was ambiguity, and held that the only extrinsic evidence of relevance was the fact that there were no significant assets other than the real property and the accounts. The testator, the court held, must be presumed to know what his estate consisted of, and that there would be no significant residue beyond the specified assets. 

In any event, the court held that extrinsic evidence was not required, as there was no ambiguity. The testator referred to “my estate”. “In the absence of any further language limiting their application, the plain and ordinary meaning of those words is that all individuals named in the will share equally in the entire estate.”

Costs of all parties were ordered to be paid from the estate. The modest estate had a value of approximately $275,000. Presumably, the costs of the parties absorbed a significant part of the estate: costs which could have been avoided by a properly drafted will. Perhaps a better title for this blog would be “The Perils of a Handwritten Will.”

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle. 

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What happens if a Will gives a life interest in an estate to A, with a gift over to B, C and D, or their issue alive upon A’s death, and A decides to disclaim her interest in the estate?

This issue was considered in Clarke v. Di Bella, 2010 BCSC 505 (CanLII).

There, the testator made a Will that provided that until the death of the survivor of the testator or A, the Estate was to pay the income and capital, as the trustees may decide, to A. Upon A’s death, the residue was to be divided amongst B, C and D. If any of B, C or D was to predecease A leaving children, then that person’s share would go to their children.

A decided to renounce her gift, and have the residue pass to B, C and D immediately. That is, the gift to B, C and D would be accelerated.

The Public Guardian and Trustee opposed, taking the position that acceleration of the gift was contrary to the intentions of the testator, and that acceleration would disentitle the children of B, C and D from a possible inheritance.

The Court disagreed with the PGT’s position, and allowed the acceleration. It held that from a review of the case law, there were four clear principles that applied:

a.                  Acceleration is presumed unless there is an indication to the contrary;

b.                  In assessing whether there is an intention to the contrary, the court must look at both the instrument and the surrounding circumstances;

c.                  The instrument must be examined in its entirety, and clauses must not be examined in isolation; and

d.                  The intentions must be viewed, as nearly as possible, from what would be the views of the testatrix, applying an objective standard.

While many cases have disallowed acceleration, the court did not feel that the present circumstances prevented acceleration.

The court did, however, agree that the intention of the testatrix was that no beneficiary would receive a bequest before the age of 25, and imposed a restriction on distribution before the beneficiaries turned 25.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Cy pres is the equitable doctrine under which a court interprets a document containing a gift to charity by substituting another charity to reflect as closely as possible the donor’s intention. Courts use cy pres when a donor’s original charitable purpose cannot be exactly fulfilled. When literal compliance is impossible, the general intention of the donor should still be carried out as nearly as possible (cy pres) so that the charitable bequest does not fail.  

In our area of expertise, estate and trust litigation, cy pres applications are quite common to determine the proper beneficiary(s) of a subject testamentary bequest.  Megan Connolly has blogged on the application of the cy pres doctrine to charitable bequests in Wills. Cy pres has been applied in other areas of the law.

In the context of class action proceedings, settlements increasingly include cy pres orders (as they are often called) where part of the settlement funds are paid to charitable and non-profit organizations, to be applied to activities that may reasonably be expected to benefit class members. In a recent decision approving the settlement of a class action against a financial institution involving alleged unauthorized charges for foreign currency transactions, Justice Cullity reviewed cy pres orders in class action settlements and ultimately made an order for the Law Foundation of Ontario to receive $14.2 million to create a trust fund “for the purpose of advancing public access to justice in Canada”. Justice Cullity noted that access to justice had been used as a ground for certifying the proceeding. Class members and other members of the public would benefit from enhanced access to justice in the future. 

Thanks for reading,

Bianca La Neve

Bianca La Neve - Click here for more information on Bianca La Neve.

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Spouses commonly execute virtually identical Wills, called “mutual wills”, on the assumption that each will give the same gifts on death out of the same “family” pool of property.  Oftentimes the residue of the estate of the first spouse to die is left to the surviving spouse, as long as he or she lives at least 30 days after the death.

A problem can arise if both Wills provide for the same gifts in case of simultaneous death or death within 30 days.  If both spouses do in fact die within 30 days of each other then an unintended double legacy could result. 

The following wording might cause exactly that problem in a mutual will scenario (and perhaps should be avoided or redrafted):

1.           I direct my estate trustee to pay or transfer the residue of my estate to my said Husband ( Wife) if he (she) survives me by at least thirty days. 

2.           If my said Husband (Wife) dies before me or fails to survive me by at least thirty days, then I direct my estate trustee to pay $100,000.00 to my daughter Sue and pay or transfer the residue to my son Joe.

If both spouses have that wording in their wills, and both die within 30 days of each other, Sue might get two gifts of $100,000 for a total of $200,000 at Joe’s expense, even though only one $100,000 gift was intended.  Joe would not be a happy beneficiary.

Thanks for reading.

Sean Graham