All About Estates

Trust Created in Holograph Will Fails

A recent Court of Appeal decision from Alberta dealt with the interpretation of a holograph will.  The Court of Appeal upheld a lower court’s decision that the testator intended to create a trust but the trust failed since the objects of the trust were uncertain resulting in an intestacy.  The case serves as a good reminder that you should consult an expert to ensure your testamentary wishes are carried out.

In his reasons, Justice Wakeling of the Court of Appeal describes the case before him as being about the meaning of two sentences contained in the holograph will.  The elderly testator, who was survived by her four children and a number of grandchildren, hand wrote a will that contained the following paragraph:

My entire estate – cash, my house … and my quarter section of land … if it is then still in my possession, I leave to my son Paul Johan Lubbert and to my youngest daughter Irene Lubberts Hanson to jointly manage it and use it for their own benefit as salary for instance, or for the benefit of one of their siblings or of one of my grandchildren – as for instance medical expenses. Irene and Paul will make these decisions together and without yielding to any pressure applied by possible recipients.”

The testator’s family have trouble interpreting this provision leading them to court and before Justice Ross of the Queen’s Bench.  Justice Ross referenced the testator’s previous 2002 will and three holograph codicils she subsequently wrote.  In her 2002 will, the testator’s children shared her estate equally.

Justice Ross held that testator intended to create a trust for the benefit of all her children and grandchildren.  She did not intend to gift her estate to Paul and Irene alone, but appoint them as trustees of a trust.  Justice Ross rejected Paul and Irene’s argument that the testator had created a power of appointment.  The forceful language of the codicils (in which she disinherits various family members) was a factor in the court’s decision that, given her strong personality, the testator was unlikely to make a power of appointment.  However, the trust failed due to the uncertainty of its objects (i.e. the intended benefit). Since the trust failed, the testator’s estate would be administered in accordance with the rules of intestacy.  Paul and Irene appealed Justice Ross’ decision.

The Court of Appeal dismissed the appeal and upheld Justice Ross’ decision.  While all three judges concurred in the finding that the holograph will created a failed trust, Justice Wakeling wrote a lengthy decision, including 44 footnotes that reference over sixty cases and texts, providing an in-depth look at how courts interpret a testator’s intentions and the use of extrinsic evidence to do so.  Justice Wakeling quotes extensively from Canadian, English, and American decisions in ascertaining the testator’s intention. It is a decision well worth reading.

This case exemplifies the risks associated with a holograph will.  The testator, who spent a significant amount of time documenting her changing testamentary wishes, will now have her estate distributed in accordance with an intestacy.  Additionally, costs for both the appellants and respondents were awarded from the estate.

Thanks for reading.

Diane

About Diane Vieira
Diane has practiced in the area of estate, trust and capacity litigation since she was called to the Ontario Bar in 2006. Diane obtained her law degree from Queen’s University after completing an Honours Bachelor of Arts degree from the University of Toronto. She also recently received the Certificate in Elder Law from Osgoode Hall Law School. She is a member of the Trusts & Estates Section of the Ontario Bar Association, the Advocates’ Society, and the Toronto Lawyers Association. Diane has chaired various continuing legal education programs regarding estate, trust and capacity matters. She can be reached at dvieira@devrieslitigation.com