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Wills - Use an Expert Estate Planning Lawyer Now, Or
Your Family Will Need Good Litigators Later
Marc Weisman
Over the last few years, I’ve been
involved in many complex estate
dispute and litigation files arising
from poorly drafted wills. About
three years ago, an accountant, Richard S., asked me to
review the will of Carol G., one of his clients. Had I not
done so, and had I not made the revisions set out below,
Carol’s estate would likely have ended up in litigation.
Carol died five months ago, her son having predeceased
her by almost a year and a half.
The residuary provision of Carol’s will stated:
…[I]f my Spouse predeceases me or survives me but
dies within a period of thirty (30) clear days after my
death, on the death of the survivor of me and my Spouse
(referred to in this Will as the “Division Date”), I direct
my Trustees to divide the residue of my estate equally
between or among those of my children, David and
Rebecca, in equal shares per stirpes.
The Latin phrase “per stirpes” generally has a very
precise legal meaning. It is generally interpreted to
describe a manner of distribution to one’s issue (i.e.,
lineal descendants being children, grandchildren, great
grandchildren etc.). If an individual divides her estate
among her “issue in equal shares per stirpes” it means,
that at first instance, the individual’s children will be
entitled to the estate, equally. However, if a child
predeceases the individual leaving children of his or
her own, they will be entitled to receive the deceased
child’s share of the estate. The phrase “per stirpes” is
contrasted with another latin phrase “per capita”.
Per capita is generally interpreted to describe a manner
of distribution where the named beneficiaries (class)
must be alive at the time of the death of the individual
in order to be entitled to his or her share of the estate.
If an individual divides her estate between her “son
Joshua and daughter Marilyn, per capita“ it means
that if Joshua was not alive at the time of the death of
the individual, then Marilyn would be entitled to the
full estate. Joshua’s children would not be entitled to
any of the individual’s estate. The same would apply if
Marilyn was not alive.
The problem with Carol’s will is that it divides her
estate between her “children, David and Rebecca, per
stirpes”. Generally speaking, the phrase “per stirpes”
in the context of named beneficiaries appears to be
contradictory.
Since David predeceased Carol, Rebecca could argue
that their mother’s will should be interpreted so that
David had to be alive when their mother died in order
to receive an inheritance under her will. Based on this
argument, neither David’s estate nor David’s children
would be entitled to receive any inheritance under their
mother’s will.
This is exactly what happened in the recent case of
Dice v. Dice [2011] O.J. No. 2734, affirmed by [2012]
O.J. No. 3158.
Joseph and Eileen Dice were married and had two
children, Eddie and Marlene. Joseph died in 1975.
Joseph’s will provided a life interest in his estate to his
wife, Eileen (i.e., what is commonly called a “spousal
trust” in favour of his spouse, Eileen), and upon Eileen’s
death, his estate was to be divided equally between his
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son Eddie and his daughter Marlene, per stirpes. Eileen
died in 2010. Unfortunately, Eddie predeceased Eileen;
he died in 2000. Eddie had three children.
Marlene argued that the phrase “per stirpes” in the
context of named beneficiaries has no legal meaning,
and therefore Joseph intended only a child alive when
their mother died was entitled to an inheritance. Eddie’s
children argued that by including the words “per stirpes”
in his will, Joseph intended to create a “gift over” to
the lineal descendants of Marlene and Eddie if either
of them died before their mother. They reasoned that
otherwise the words “per stirpes” in Joseph’s will would
be meaningless.
Justice Turnbull at the Superior Court of Justice
(Ontario) agreed with Eddie’s children. Justice Turnbull
found that in reviewing Joseph’s will as a whole, rather
than focussing on a legalistic interpretation of one or
two phrases, Joseph intended to benefit each branch
of his family, Eddie’s and Marlene’s, equally.
Marlene appealed the decision to the Court of Appeal
(Ontario).
The Court of Appeal also agreed with Eddie’s children.
Justice Simmons, speaking for the Court of Appeal,
stated:
... First, and foremost, the court must determine the
intention of the testator when he made his will.
The golden rule in interpreting wills is to give effect
to the testator’s intention as ascertained from the
language that was used.
...
Where the testator’s intention cannot be ascertained
from the plain meaning of the language that was
used, the court may consider the surrounding
circumstances known to the testator when he made
his will – the so-called “armchair rule”. ... Under
this rule, the court sits in the place of the testator,
assumes the same knowledge the testator had of
the extent of his assets, the size and makeup of
his family, and his relationship to its members, so
far as these things can be ascertained from the
evidence presented. The purpose of this exercise
is to put the court in, as close as possible to, the
same position of the testator when making his last
will and testament.
...
In this case, neither the other provisions of his will
nor the evidence of surrounding circumstances that
was adduced provide much help in assessing the
intention of the testator concerning the meaning
of the residue clause. At most, what is evident is
a general intention to benefit his children more or
less equally.
What does seem clear, however, is that the testator
intended the words “per stirpes” should have some
meaning. If that were not the case, he could have
omitted them.
...
Even if used improperly, it seems to me that, having
regard to the traditional meaning of the phrase “per
stirpes” when used in conjunction with the term
“issue”, the most logical meaning is that the use
of the phrase conveys an intention, to benefit, at
least, the testator’s children’s children.
Viewed in this way, I do not agree that a gift to
named children, per stirpes necessarily creates a
contradiction in terms. Rather, in the context of
Mr. Dice’s will, which provides no other indication
of the testator’s intention, both aspects of this
disposition can be viewed as an elaboration of his
intention. That is, the disposition reflects both an
intention to benefit each of the testator’s children,
as well as an intention to benefit, at least, each
child’s children in the event that either or both of
the named children fail to survive the life tenant.
In the end, Eddie’s children were lucky that the Court
was able to conclude from reviewing Joseph’s will as a
whole that Joseph intended to benefit Marlene’s and
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Eddie’s children if either of them died before their
mother.
Do you have a question about a tax or estates matter, or a topic
that you would like to see discussed here? Contact Marc Weisman
at (416) 777-5455 or MWeisman@TorkinManes.com.
Turning to Carol’s will, I revised her will to read:
I direct my Trustees to divide the residue of my estate
equally between David and Rebecca, or to pay or
transfer all of the residue of my estate to the survivor if
only one of them is alive on the Division Date, provided
that if either or both of them predeceases the Division
Date leaving issue surviving him or her who is or are
alive at the Division Date, the share of the residue of
my estate to which such deceased child would have
been entitled if such child had survived the Division
Date shall be divided between or among such deceased
child’s issue in equal shares per stirpes.
Torkin Manes’ Tax , and Trusts and Estates Groups have significant
experience in tax planning and estates and trusts matters. Marc
Weisman is the Chair of the Tax Department and his practice focuses
on corporate and personal income tax and commodity tax planning,
and trusts and estates matters. His experience encompasses mergers,
acquisitions, divestitures, reorganizations, international inbound
and outbound acquisitions, investments and financings. Marc also
regularly counsels families on estate and succession planning, dispute
resolution and executors in carrying out their duties. Marc works with
accountants, financial advisors and non-specialist lawyers advising
on tax and estate planning on behalf of their clients.
Please contact members of our Tax, Trusts and Estates, and
Business Law Groups for more information.
The moral of this story is
that individuals
who want to ensure that their will reflects their
testamentary wishes should choose an expert in the
areas of Wills and Estate planning to prepare their
will. By revising the residuary provision in Carol’s will,
as set out above, we removed a significant ambiguity.
We avoided potential litigation among Carol’s children
and grandchildren.
I have been involved in too many situations where
grandparents and parents worked extremely hard to
build wealth and carefully considered its distribution
to family on their death. However, when it came to
the actual preparation of their wills, they relied on
their general counsel – a non-expert. (Perhaps, they
did not want to spend the money it would cost for an
expert to prepare their wills.) Their wills were fraught
with mistakes and ambiguities. This led to significant
litigation (costing tens and hundreds of thousands
of dollars) and resulted in their testamentary wishes
not being fulfilled. Worst of all, the dispute broke up
family relationships!
Risa Awerbuck, Trusts & Estates Law
416 777 5425 | rawerbuck@torkinmanes.com
Allan S. Bronstein, Business Law
416 777 5369 | abronstein@torkinmanes.com
Howard Burshtein, Business Law
416 777 5456 | hburshtein@torkinmanes.com
Jeffrey I. Cohen, Business Law
416 777 5422 | jcohen@torkinmanes.com
Jonah S. Mayles, Tax Law
416 775 8820 | jmayles@torkinmanes.com
Matthew Tevlin, Business Law
416 777 5401 | mtevlin@torkinmanes.com
Craig Vander Zee, Trusts & Estates Law
416 643 8812 | cvanderzee@torkinmanes.com
Marc Weisman, Tax, Trusts & Estates and Business Law
416 777 5455 | mweisman@torkinmanes.com
The issues raised in this release by Torkin Manes LLP are for information purposes only. The comments contained in this document should not be relied upon
to replace specific legal advice. Readers should contact professional advisors prior to acting on the basis of material contained herein.
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