Per stirpes. It is a term that is often used in estate planning and will drafting yet is also one which frequently causes problems. Perhaps because the meaning is not always understood, even by estates practitioners, and therefore the term is misused. Or it could be because the term can be interpreted differently when a testator’s intentions are taken into account. In the recent decision in Jonas v Jonas, 2022 ONCA 845 (CanLII), the Ontario Court of Appeal was asked to consider the interpretation of the residue clause in a will and in particular the phrase “in equal shares per stirpes”.
The testator died leaving his common law spouse, four children and four grandchildren. The appellant was one of the testator’s children. The application judge was provided with six possible interpretations of the residue clause, although only two were argued before her. The residue clause stated:
“I DIRECT my trustees to divide the rest, residue and remainder of my estate as follows: forty per cent (40%) to be divided equally among my children who shall survive me and sixty per cent (60%) to be divided equally between my grandchildren and my great grandchildren (if any) who shall survive me or be born within ten years of my decease, in equal shares per stirpes. Provided that the share to my grandchildren shall be kept and invested by my trustee and used for the support of such grandchildren and for their education and then paid to each of them upon such grandchild attaining the age of 40.”
When the application was initially before the court the appellant (then a respondent) argued that the residue was to be interpreted so that 60% of the residue would be distributed equally among the children (in addition to 40% of the residue). She argued that if, at the time of the vesting period (10 years from date of death), a child of the testator had no children of their own then the child would receive an additional 15% share of the residue (or ¼ of the 60%). If, at the 10 year mark, a child of the testator had children of their own, then the 15% would be divided equally between or among those children. In other words, each child (and the “branch” of that child’s family) would receive the same quantum amounting to ¼ of the residue.
Alternatively, the Children’s Lawyer argued that the residue clause created two classes of beneficiaries: the first class was the children of the testator (to receive 40% of the residue); the second class was the grandchildren and great grandchildren of the testator alive at the death of the testator or born within 10 years of the testator’s death. The 60% of the residue was for the second class of beneficiaries only, not to be distributed among those in the first class.
The Court of Appeal found that the application judge correctly relied on the “armchair rule” set out in Dice v Dice Estate, 2012 ONCA 468 (CanLII). When doing so, the appellate court reiterated that:
“…the court must determine the testator’s intention as ascertained from the language that was used and the will as a whole. Where the intention cannot be ascertained from the plain meaning of the language used, the court may consider the surrounding circumstances known to the testator when making the will. The court sits in place of the testator and assumes the same knowledge they had of the extent of their assets, the size and makeup of their family, and their relationship to the family members, based on the evidence presented.”
After placing herself in the position of the testator, the application judge agreed with the interpretation of the residue clause submitted by the Children’s Lawyer: the testator meant to create two classes of beneficiaries distinct from each other. The testator meant for the beneficiaries within those classes to receive an equal share of the residue of the estate. If the appellant’s interpretation was accepted then a child of the testator who did not have children of their own would receive a greater share of the residue. This result would have defeated the intentions of the testator.
In its decision the appellate court stated that it does not accept that “the case law interpreting the term per stirpes admits of one definition.” Rather, there is caselaw supporting the interpretation of the residue clause with which the application judge agreed – where per stirpes is a “type of “gift over” mechanism”. Ultimately, despite the possibility of multiple interpretations, when per stirpes is used in a will and the clause is ambiguous, the armchair rule should be applied and lead to the correct interpretation in that case.
 In her factum the appellant raised another interpretation of the residue clause, one which was not argued before the application judge. The Children’s Lawyer submitted that it was inappropriate to raise this new argument on appeal. The Court of Appeal determined that it did not need to address the issue as the newly-raised argument did not reveal an error in the reasoning of the application judge.