I recently had the pleasure of leading a course for lawyers who want to learn how to draft Wills (or improve their existing skills). One of the topics that we discussed at some length was how best to draft a residue provision in a Will, where there are multiple residuary beneficiaries. I thought it may be helpful to summarize a key discussion point from our session here, as in my practice I regularly come across Wills with residue clauses that could, under certain circumstances, lead to a partial intestacy.

Imagine that you are drafting a Will for a client who has three children. She also has several important charities that she supports, and which she would like to benefit on her passing. She has instructed you to draft her Will so that each of her children (call them Child A, B and C) receive 25% of the residue of her estate, with a giftover to her grandchildren (or more remote issue) if any of her children predecease her. She also directs that the remaining 25% of the residue should be divided equally among five charities (call them Charity A, B, C, D and E) that are important to her.

What is the best way to draft such a residue clause?

It seems like these instructions give rise to a number of straightforward drafting options. You could simply write the Will to mirror exactly as the client directs: pay 25% of the residue to Child A, provided if they’re not alive, their portion should be distributed to their issue, and then the same for Children B and C, and divide the remaining 25% among Charities A, B, C, D and E in equal shares. Or, you may be inclined to draft the Will so that the Trustee is directed to divide the residue into 20 equal shares, and to transfer five shares to each of Children A, B and C, with a giftover if they’re not alive, and then transfer one share to each of Charities A, B, C, D and E.

On first review, these options seem reasonable: the required beneficiaries will receive what the testator intended. However, on closer review, they could potentially give rise to an intestacy. What happens if the Will is drafted as above, and Child A predeceases the testator, but does not leave issue who survives the testator? If the Will is drafted as first described above, there will be an intestacy with respect to Child A’s 25%. There will also be an intestacy in the second example, as the trustee has been directed to divide the estate into 20 shares, but now does not have instructions with respect to five of those shares.

What is the solution to this issue? You could draft extensive alternate options in each provision – i.e. if Child A is deceased, giftover to their issue, if no issue, giftover to Children B and C and the charities, with a further giftover to the issue of Children B and C if either of them is not alive. Or, more simply, you can include language to this effect:

“I direct my Trustees to divide the residue of my estate into the number of equal shares required to give effect to the following provisions:”

In this example, the residue clause would then provide that if Child A or any of their issue are alive, the trustee will set aside five equal shares, with the same for each of Children B and C, and then to set aside one equal share for each of Charity A, B, C, D and E in existence at the date of death of the testator (note that I have not discussed the inclusion of a cy pres clause in the Will, as that is beyond the scope of this discussion).

This language, while similar to the second example above, prevents an inadvertent intestacy, by avoiding the setting aside of shares for a gift that cannot be satisfied. In the scenario described above, where Child A predeceases the testator and does not leave issue surviving the testator, this language ensures that only fifteen shares are set aside: five for each of Children B and C, and one for each of Charities A, B, C, D and E. An intestacy is avoided, and the relative proportions of each beneficiary has changed without the need for complex formulas or reapportioning language.

Wishing everyone happy drafting, and a wonderful weekend!