All About Estates

When Does a Class of Beneficiaries Close?

“To my grandchildren…”

Sometimes, a testator will leave testamentary gifts to an undefined class of people, rather than to beneficiaries by name. Gifts might be left to “my children” or “my grandchildren” or even “the children of my niece” without any further specifications in the will[1].

This practice raises a question. Who are the precise members of this type of undefined class? Is the testator referring to people who fit the description at the time of drafting? In other words, do only those who are alive at the time of drafting qualify? Or do these classes stay open for those who fit the description and born in the future? If so, how long would such a class stay open and when does membership to the class close?

When it comes to assets, wills are ambulatory. This means a will necessarily takes into account all the changes to a testator’s things between the time that it is drafted, until the time it activates. If a testator referred to an asset ambiguously by class, e.g., “my car”, then whichever car the testator has at the time of his passing will be presumed to be that car[2].

When it comes to beneficiaries, it gets more complicated.

The Three Factors

All classes must close at some point in order to allow for the administration of the estate. The determination of a class of beneficiaries depends on three factors[3].

The first factor which Canadian Courts have typically considered is the testator’s intention. If that intention, either express or implied by still clearly discernible, can be made out, then it is the primary determinant or “controlling factor”. This will vary case by case, and depend on the language of the will, and circumstances in existence and known to the testator at the time.

Re Hyslop Estate[4] was determined on this “controlling factor”. By looking at the natural meaning of the will and surrounding circumstances, the Court determined that the testator did not mean to exclude the children of one of his sons who were not yet born at the time of the testator’s death.

If the first factor cannot be made out, Courts will instead rely on the second factor which is a rule of convenience. Absent contrary testamentary intention, members of a class are prima facie determined at the time of the testator’s death. This includes all those who are alive or conceived at the time of death, excluding those who are conceived and born after the testator’s death.

This second factor was Beard J.’s main reason in his decision of Re Charlesworth Estate[5]. In this case, the testatrix left assets to “the children of my niece, Lynne Arbez, and my nephew, Wayne Kindret”. At the time of drafting the will, Kindred had only one child and Arbez was pregnant with her first child. At the time of the testatrix’s death, Kindred had an additional child. Six months after the testatrix’s death, Arbez had a second child. This second factor led to the result that the second child was excluded from the class.

Lastly, the Courts may consider closing a class based on equitable factors. In Getty v. Crow[6], the Chatham County Court closed a class of beneficiaries in order to allow a 77-year-old beneficiary and his sons to collectively sell a property. While the buyers were worried about the possibility of future unborn or adopted children, the Court accepted that the 77-year-old was in ill health, had no intentions of adopting or fathering more children, and stated that the purchaser can rely on the “moral certainty” of his intention and situation.

The Takeaway

While Courts have tools to resolve issues regarding an undetermined class of beneficiaries, is it more efficient to specify these classes in the will drafting process.

Instead of “to my grandchildren”, one might consider “to my grandchildren who are alive at the time of my death” or “who are alive thirty days after my passing”. Better yet, one might refer to each beneficiary by name. In will interpretations, the intention of the testator is a paramount consideration. By making this clear through the language of the will, one can better streamline the estate administration process and better ensure one’s wishes are carried out.

 

[1] Re Charlesworth Estate (1996), 12 ETR (2d) 257 (Man QB).

[2] Assuming the testator has one car, and no contradictory descriptions of that car causes the gift to lapse, e.g. “my red car” when at the time of death he only has a blue car.

[3] As set out in cases such as Re Charlesworth Estate (1996), 12 ETR (2d) 257 (Man QB), Re Hyslop Estate, 1978 Ont. H. Ct., and MacQuarrie v. Eastern Trust Co. (1927), [1928] SCR 13 (SCC).

[4] 1978 Ont. H. Ct.

[5] 12 ETR (2d) 257 (Man QB).

[6] 1985 CarswellOnt 712 (Ont. Dist. Ct.).

About Tyler Lin
Tyler Lin completed his articles at de VRIES LITIGATION LLP. His practice focuses on estate, trust and capacity litigation.

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