Correcting a Mistake in a Will – What did the Testator Intend


Written on July 25, 2014 – 8:54 am | by Justin de Vries

Elizabeth Ann McLaughlin died at the ripe old age of 98.  She was predeceased by her husband.  Together they had six children, including Daniel.  Daniel, as estate trustee, sought to rectify what he characterized as a solicitor’s mistake in his mother’s secondary will.

For many years prior to her death, Mrs. McLaughlin had no relationship with her son, Thomas, or her daughter, Judith.  She had previously instructed her long time solicitor, Mr. Walsh, to remove Thomas and Judith from her will.

In 2010, Mrs. McLaughlin instructed Mr. Walsh to draft primary and secondary wills to reduce probate taxes (multiple wills are a common estate planning tool).  She again confirmed that Thomas and Judith were not to be named as beneficiaries.  However, in drafting the secondary will, Mr. Walsh repeated the cash bequests set out in the primary will and omitted the residue clause (the secondary will only dealt with the house).  The effect of the drafting errors was that the beneficiaries under the primary will benefitted from the same set of cash bequests twice and the residue of the secondary estate (which was not gifted under the will) would go by way of intestacy, such that all of the children, including Thomas and Judith, would benefit equally.  Adding further insult to injury was the fact that the secondary will revoked the primary will.

According to the court, while the secondary will contained no obvious error or ambiguity on its face, the mistake become apparent in light of the surrounding circumstances, especially the admission by the solicitor of his mistake and the ample evidence that Mrs. McLaughlin did not want to benefit Thomas and Judith.

Judith submitted that there was no evidence that Mrs. McLaughlin did not approve of the words in the secondary will.  According to Judith, if the will was read over by Mrs. McLaughlin and it appeared that she understood it, it should be presumed that Mrs. McLaughlin knew and approved of the contents.  Even if Mrs. McLaughlin failed to understand the legal effect of the actual words in the will, it was not a rectifiable mistake.

Judith maintained that a will should not be changed except in exceptional circumstances.  Judith claimed that the words of the secondary will were clear and unambiguous.  Therefore, no extrinsic evidence of Mrs. McLaughlin’s intentions should be introduced even though an intestacy was created, cash bequests were doubled, and the primary will was revoked.  Plainly put, what Mrs. McLaughlin may have intended should not be considered by the court.

The general rule is that in construing a will, the court must determine the testator’s intention from the words used in the will and should not consider extrinsic evidence of intent.  Evidence proffered by a third party (usually a beneficiary) of what the testator intended has been generally considered self-serving and unreliable.  However, the court does have the power to rectify (i.e. fix) a will in order to give effect to the testamentary intentions of the deceased where there was a clerical error (often described to as a “slip of a solicitor’s pen”) or where the testator’s instructions have been misunderstood or not carried out by the solicitor.  In other words, the court can correct or rectify a solicitor’s mistake.

In considering whether to rectify the will, the court sought to determine exactly what happened in order to explain how the mistake occurred and to rebut Judith’s position that no mistake had, in fact, been made.  In other words, the court looked at what Mrs. McLaughlin intended rather than just accepting the solicitor’s evidence that he did, in fact, make a mistake.

The court held that Mrs. McLaughlin likely wanted to create a primary and secondary will because her son Daniel was updating his will at the same time.  Mrs. McLaughlin was told she could avoid probate fees by executing a secondary will and this is something she would have wanted to do.  Moreover, the court found that Mrs. McLaughlin did not want to create an intestacy, to revoke her primary will, or duplicate the cash bequests in her primary will.

Finally, while Thomas and Judith suggested that Mr. Walsh and Daniel were overbearing, there was no benefit to Mr. Walsh to prepare a will that would expose him to a claim for negligence or for Daniel to orchestrate a will where he would receive a smaller share, as he would on an intestacy.  The court accepted that Mr. Walsh had made a mistake and the ample evidence that Mrs. McLaughlin never intended to benefit Judith and Thomas.  As such, the court was prepared to rectify the will as requested.

Happy Litigating!

Justin

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    Trust Income and Working Income Tax Benefit Eligibility


    Written on July 24, 2014 – 7:00 am | by Steven Frye

    Recently the Canada Revenue Agency (“CRA”) was asked whether income allocated by a communal organization and reported as self employment earnings for CPP eligibility on a trust income tax slip (T3 slip) is considered “working” income for the recipient to claim the Working Income Tax Benefit (“WITB”).

    CRA responded that the Income Tax Act generally defines income from a Trust to be income from a property and not any other type or form of income. While the income may be considered self-employment income for the purposes of CPP eligibility, CRA notes it does not alter the fact that it is still considered income from property for income tax purposes, so it does not qualify for a WITB claim.

    While CRA was responding to a matter related to a communal organization, deemed to be a Trust for income tax purposes, it is a reminder that the same provisions apply to income from any Trust carrying on a business. As the income from a trust is characterized as property income, it is not eligible for the WITB claim, it does not create contribution room for a RRSP, it does not provide access to child care or moving expense claims, or any other benefits of “earned income” from business or employment.

    Thanks for reading

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      My Final Blog


      Written on July 23, 2014 – 7:55 am | by Laura West

      This will be my last blog for ‘All About Estates’ as I have made the decision to return to my home province of British Columbia and I will be moving from Toronto to Vancouver in August.

      I have very much enjoyed being part of this blog – I think that it is an excellent source of information for those engaged directly or peripherally in the estates field. Although each of the bloggers have different specialities, they all present interesting, engaged and informed viewpoints on a daily basis.

      I also think that the readers of this blog have been fantastic and I wish to thank all of you who have contributed ideas for blog topics, given constructive feedback or simply wanted to chat about the issues raised in that day’s blog.

      Although I will no longer be contributing to this blog, I will continue to be a loyal subscriber and will cheer my fellow bloggers on as they continue to provide excellent information to the blog’s readership.

      I hope to stay in touch with both readers and bloggers so that our conversations can continue.

      Thanks

      Laura West

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