In a recent British Columbia case, the court was asked to interpret the residue clause of a will. The testator’s wife held a life interest in the Estate’s property and was a beneficiary of an ongoing testamentary trust. However, both her stepchildren (and presumed receipients of the residue of the Estate) predeceased her.
The testator died in 1979. He was survived by his second wife (Marion), his adult son (Carson), his adult daughter (Marilyn) and his grandchildren. In his 1979 last will and testament, he gifts Marion a life interest in their property. The residue of his Estate was divided into two trusts, with Marion receiving 55% of the residue (the “Wife’s Share”) and Marilyn and Carson receiving 45% of the residue (the “Children’s Share”). The Children’s Share was divided 60% to Marilyn and 40% to Carson.
The remainder/residue in the Wife’s Share would go to Carson and Marilyn or the survivor of the two upon Marion’s death.
While the Will contemplates that either Marilyn or Carson may predecease Marion, the Will does not contemplate what would happen if they both predeceased their stepmother.
Carson died in 1999. Marilyn died in 2016, and Marion died in 2022 at the age of 103.
The Residue Clause
Upon Marion’s death, the trustee of the testator’s Estate requested the court’s advice and direction with interpreting the residue clause of the testator’s Will:
To divide the residue of my estate into two parts, the one consisting of [55%] of the residue, hereinafter referred to as “my Wife’s Share” and the other consisting of [45%] of the residue, hereinafter referred to as “my Children’s Share” and to deal with such shares as follows:
(i) To stand possessed of my Wife’s Share upon trust to pay to my wife, MARION LOUISE BRADLEY, out of such share the net income derived therefrom during her lifetime, …
(ii) Upon the death of the survivor of me and my wife my Trustees shall divide my Wife’s Share or the remainder thereof among my issue then alive by way of [60%] of such share to my daughter, MARILYN DAWNE BRANDRETH, and [40%] of such share to my son, CARSON GEORGE BRADLEY.
(iii) To divide my Children’s Share among my said daughter and son in the same proportionate amounts.
(iv) If either of my said daughter or son shall have died before such division and appropriation I direct that his or her share shall be paid and transferred to the survivor of them.
Did the ambiguity in the definition of issue create an intestacy with respect to the Wife’s Share as both Marilyn and Carson predeceased Marion? Was there an intestacy with respect to the Children’s Share as they had now both died before the end of the Estate’s administration? If there was an intestacy was it created at the time of the testator’s death or when Marion died? Whose issue would take on an intestacy?
The court, noting the general presumption that a testator who executes a will does not want an intestacy, found that there was no intestacy with respect to either the Wife’s Share or the Children’s Share.
When Carson died in 1999, the remainder of the Wife’s Share vested in Marilyn to be received by her or her estate, when Marion died. As such, the remainder of the Wife’s Share would now go to Marilyn’s estate.
The Children’s Share vested in Carson and Marilyn at the time of the testator’s death. Any funds remaining in the Children’s Share (which could have been collapsed during their lifetime) would go to Carson’s estate (40%) and to Marilyn’s estate (60%).
This case is a reminder of the importance of estate planning for blended families and the need to create non ambiguous beneficiary classes in wills.
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