Sunday, April 30, 2006

Notes Forgiving Loans Invalid: Failure to Comply with Wills Act Not Forgiven

As I have posted here, British Columbia has strict technical requirments for making a valid will. With limited exceptions, a will is not valid unless it is in writing, and signed at its end by the testator (or signed in the testator’s name by some other person in the testator’s presence and by the testator’s direction), the testator makes or acknowledges the signature in the presence of two witnesses, and the witnesses sign their names in the presence of the testator.

This rule can catch other documents that one might not consider wills, such as a document in which a creditor purports to forgive loans on the creditor's death.

This issue arose in Anderson Estate v. Polson, 2003 BCSC 1721.

The defendants, Ronald John Polson and Polson Investments Ltd., had each given the deceased demand promissory notes. The corporate defendant executed a demand note dated December 11, 1991 for $200,000 and Mr. Polson signed a note dated February 1, 1998 for $55,000.

Mr. Anderson signed a document dated December 31, 1991 that proved that the December 11, 1991 note would be considered paid at Mr. Anderson’s death. There was a further provision that if Mr. Anderson’s wife survived him, Polson Investments Ltd. would be required to continue making payments of $1500 to his wife during her lifetime. This document was witnessed by a lawyer in the State of Washington. Mr. Polson also signed this document on behalf of Polson Investments Ltd., acknowledging that he had read and understood the agreement, in front of a Notary Public in British Columbia,.

Mr. Anderson added a similar statement dated March 31, 1999 to the February 1, 1998 note purporting to forgive the balance owing on that note on his death.

When Mr. Anderson died his executor took the position that the statements purporting to forgive the balance owing under the notes were testamentary in nature (in other words, in the nature of a will). The statements forgiving the debts on death were void, because they were not signed in accordance with the Wills Act, RSBC 1996, c. 489.

Mr. Justice Truscott agreed with the executor’s position. Applying the test in Cock v. Cooke (1986), L.R. 1 P. 241, a document is testamentary if the person making it intends that it will not take effect until his death, and if it is dependent on his death for its vigour and effect.

In finding that the statements were testamentary, Mr. Justice Truscott applied the following factors from the judgment in Elliott v. Turner and Turner (1944) 2 D.L.R. 313 (Ont. H.C.):

1) no consideration passes,
2) the document has no immediate effect,
3) the document is revocable,
4) the position of the deceased and the donee does not immediately change.

Mr. Justice Truscott found that Mr. Anderson intended that the forgiveness would only take effect on his death. The statements were dependant on his death for their vigour and effect. There was no consideration. Because Mr. Anderson could demand payment during his lifetime, the statements were revocable. Mr. Anderson’s and the debtors’ positions did not change immediately.

Saturday, April 29, 2006

Cyberage Estate Planning

I have read a couple of interesting posts yesterday and today on estate planning in this age of websites, blogs and online accounts.

Shelley Mactyre in a post entitled "Internet Memorials" in her blog The Fig Tree, and Brian Olson in "What about digital assets?" in his Utah and Nevada Estate Planning Blog, talk about the importance of keeping user names and passwords in a secure place that will be accessible to your personal representative after your death.

As a result of reading these posts, my estate planning checklist just got a little longer.

Sunday, April 23, 2006

Effect of Divorce on a Will

Last week, I wrote in a post here about the effect of marriage on a will. What about divorce?

In British Columbia, s. 16, of the Wills Act, RSBC 1996, c. 489 says that if you make a gift in your will to your spouse, and you and your spouse later divorce, the gift to your spouse is revoked. On your death your will takes effect as if your spouse died before you. However, this rule does not apply if it is apparent from your will that you intend for your spouse to take the gift even after a divorce.

For example, let's say Susan makes a will in 1990, in which she leaves everything to her husband Bill if he survives her. Her will provides that if Bill dies first, her estate will go to her son Ralph. Susan and Bill divorce in 2000. Susan does not change her will, or remarry. She dies in 2003. Bill and Ralph survive her. The estate will go to her son Ralph.

However, if Susan decided she still wanted to leave her estate to Bill despite their divorce—and yes that sometimes really does happen-- she could make a will that says that her estate will go to Bill even if she dies after their divorce.

Section 16 also applies if you appoint your spouse as executor, and you later divorce. Unless your will indicates a contrary intention, the divorce revokes the appointment of your former spouse as executor.

However, section 16 of the Wills Act only applies if there is a divorce, a judicial separation, or the marriage is found void or declared a nullity by the court. It does not apply if a married couple merely separates, or signs a separation agreement.

Furthermore, section 16 of the Wills Act only applies to a gift made in a will. If you designate your spouse as the beneficiary of your life insurance in a life insurance contract, or as a benificiary in your pension plan or Registered Retirement Savings plan, and you and your spouse later divorce, the divorce does not revoke any of these designations. (But, see a my post "Life Insurance Policy Beneficiary Designations Are Not Sacrosanct," here, about a case in which the court held that the terms of a separation agreement prevented a former spouse from keeping the proceeds of a life insurance policy.)

If you are getting divorced, it is important that you review your life insurance, RRSP and pension plan designations, as well as your will, in light of your new circumstances and wishes.

Wednesday, April 19, 2006

University of Toronto, Faculty of Law

Falconer Hall


Flavelle House


I took these pictures of my alma mater, the University of Toronto, Faculty of Law, when I was in Toronto attending the Canadian Bar Association, Wills and Estates section meeting in February. You can read more about the law school buildings here.

Tuesday, April 18, 2006

Effect of Marriage on a Will

[Since I wrote this post, British Columbia law has changed. Under the Wills, Estates and Succession Act, which came into effect on March 31, 2014, a marriage on or after that date does not revoke a will. The old law described in this post will apply if the marriage occurred before March 31, 2014.]

Under British Columbia law, if you make a will, and then get married, your marriage revokes your will. There is an exception if you include in your will a declaration that the will is made in contemplation of your marriage. This is set out in s. 15 of the Wills Act, RSBC 1996, c. 489.

This is one respect in which marriage does have different legal consequences than living in a marriage-like relationship. If you live in a marriage-like relationship, this does not have the effect of revoking your will (although your common law spouse may apply to vary your will).

Supposing two people who are living together in a marriage-like relationship make wills in which they each leave everything to each other. At the time they make their wills, they are not contemplating marriage, and their wills do not contain a declaration that they are made in contemplation of marriage. The couple later marries. Because they have already left everything to each other in their wills, they do not make new wills. The husband dies.

What is the result?

The marriage revoked the husband's will. He dies intestate (without a will.) If he did not have any children, or other issue, his wife will receive his estate anyway under s. 83 of the Estate Administration Act, RSBC 1996, c. 122. If he had children or grandchildren, his wife will have to share the estate according to the rules for intestate estates under s. 85 of the Estate Administration Act.

Should section 15 of the Wills Act be amended? Abolished? Should a spouse be given the option of allowing the other spouse's will to remain in effect if it was made before their marriage?

Monday, April 17, 2006

More Wills,Trusts and Estates Law Blogs

I have added five more law blogs to my sidebar. They are:

Andrew Ewalt's Law Blog--Andrew practices in the greater Hartford, Connecticut area. Although his blog also covers a variety of other legal subjects, he writes frequently about estate and succession planning issues.

Arizona Elder Lawyer--Cameron Pickett writes about trusts, wills, estates, probate, tax issues, guardianships, and conservatorships, with an emphasis on elder law issues. She practices in Chandler Arizona.

The Fig Tree--Shelley Mactyre of Hillsboro, Oregon wins the award for the best name for a blog with an estate planning focus. You can find out how she came up with the name for her blog here.

Florida Probate Blogs.com--David Luber practices estate planning and probate law in Broward County, Florida.

Utah and Nevada Estate Planning Blog--Brian Olson of Gallian, Wilcox, Welker & Olson, recently started his blog on estate planning law in both Nevada and Utah.

Sunday, April 16, 2006

Springing Powers of Attorney

As I wrote in a previous post, Powers of Attorney: Responsibilities of the Attorney, here, "[a] power of attorney is a document that allows you to appoint someone to act on your behalf in handling your assets and financial affairs."

At common law, if you made a power of attorney appointing someone to handle your financial affairs (called your “attorney” or the “donee” of the power of attorney), and you subsequently became incapable of managing your affairs, the power of attorney terminated, and the attorney would no longer have authority to manage your affairs.

However, in British Columbia we have legislation that allows you (the “donor”) to make a power of attorney that continues in effect despite your subsequent mental infirmity. This is set out in Section 8, of the Power of Attorney Act, RSBC 1996, c. 370. In British Columbia we call a power of attorney that will remain in effect despite the donor’s subsequent mental infirmity an “enduring power of attorney.”

We often use enduring powers of attorney as planning tools for our clients in case they later become of mentally incapacitated. By making an enduring power of attorney you are appointing someone to look after your affairs if someday you lose the mental capacity to look after your own finances. This is often the main reason people make enduring powers of attorney.

Most powers of attorney come into effect immediately. This means that if you make a power of attorney, the person you appoint as your attorney could use the document to deal with your house, bank accounts or investments now, even while you have capacity. If your attorney uses it against your wishes while you are competent, then he or she would be misusing the power of attorney, but the Land Title Office, or the financial institutions you deal with would not know that.

Some people do not want the person they appoint as their attorney to be able to use the document, unless they become incapable of managing their own affairs. There are a couple of ways you can do this.

One way is to leave the document with your lawyer, or with someone else, with a letter of instruction stating that the document may only be released to the attorney if the attorney brings in a letter from a medical doctor expressing the opinion that you are no longer capable of managing your affairs, or if you later authorize the document’s release.

A second way you can prevent your attorney from using the power of attorney while you are still mentally competent is to provide in the power of attorney document itself that the power of attorney may only be exercised during any subsequent mental infirmity on your part. This is called a springing power of attorney.

Until recently, there was some question about whether springing powers were effective in British Columbia. Apparently, Land Title Offices were refusing to register a springing power of attorney, which had the effect of preventing an attorney appointed under a springing power of attorney from dealing with the donor’s land.

This question appears to be settled by the British Columbia Court of Appeal’s decision in Goodrich v. British Columbia (Registrar of Land Titles), 2004 BCCA 100 (CanLII)(2004), 236 D.L.R. (4th) 433; (2004), 26 B.C.L.R. (4th) 45, which you can read here. In that case the Registrar of Land Titles refused to register a springing power of attorney. The Registrar argued that section 8 of the Power of Attorney Act did not authorize springing powers of attorney. The Registrar also raised concerns about how the Registrar would be able to determine whether the donor had a mental infirmity.

The Court of Appeal rejected the Registrar’s argument that springing powers of attorney were invalid, and held that the springing power of attorney in Goodrich was valid. The court referred the case back to the Supreme Court to determine if the donor was suffering from a mental infirmity.

Madam Justice Saunders recognized the practical problems of determining when a springing power of attorney springs into effect. She wrote at paragraph’s 30 and 31,

[30] The Registrar raises concerns about the integrity of the registration system and correctly notes the reliance that is placed upon documents presented for registration. Where, the Registrar asks, is the safeguard to ensure the condition in the power of attorney is met? Respectfully, I do not agree with the chambers judge that the Land Title Act provides no mechanism enabling the Registrar to make a determination of mental capacity. While a more satisfactory process might be devised, it appears to me that the Land Title Act empowers the Registrar to conduct an inquiry under s. 382(1) of the Land Title Act as part of determining whether the instrument signed by the attorney is registrable, that is, whether the instrument is signed by the attorney under a valid power of attorney. From this decision a party may appeal to the Supreme Court of British Columbia. If I am wrong in this, and in any case, two other avenues appear to me to be open to settle the question in a way that provides the necessary certainty: either the Registrar may state a case under s. 314 of the Land Title Act, or the attorney may seek a direction pursuant to Rule 10 of the Rules of Court.

[31] Any of these three avenues will involve an enquiry into the mental state of the donor, with consequent delay and costs. For that reason, and absent an amendment to the legislation that will establish a procedure such as that recommended by Professor McClean, it would be better that the power of attorney prescribe on its face the evidence which will be sufficient to satisfy the condition there set out.


I have concerns about using springing powers of attorney. I would recommend to anyone who makes one that they make sure that the document sets out very clearly what evidence is required to show when the attorney’s authority starts. For example, you could require an opinion from a medical doctor, or opinions from two doctors, that you are no longer mentally competent to manage your affairs. On the other hand, when the power of attorney is registered with a Land Title Office, the Registrar will require any letters from your doctor or doctors, which will then become public record.

You should balance the potential complications and loss of privacy against any benefits before making your power of attorney a springing power of attorney.

Thursday, April 13, 2006

Taxation of Registered Retirement Savings Plans at Death

A registered retirement savings plan (“RRSP”) is a retirement plan that allows taxpayers in Canada to defer tax on savings until retirement. Contributions to RRSPs are tax deductible. Tax on interest, dividends and capital gains on investments in an RRSP is deferred. When the taxpayer takes funds out of the RRSP, he or she then pays taxes on the amount withdrawn each year. You can contribute to your own RRSP or to your spouse’s plan or common law partner’s plan.

What are the tax consequences when the person entitled to an RRSP (the “annuitant”) dies?

The basic rule—to which there are some important exceptions—is that the annuitant is deemed to have received the value of the RRSP at death, and the value is then included in the annuitant’s income in his or her terminal return for the year of death. This can result in very large income taxes in the year of death.

There are some exceptions.

If the annuitant designated a spouse or common law partner (for a definition click here) as the beneficiary of the RRSP, then in the case of a matured RRSP, the spouse or common law partner becomes the successor annuitant and pays the tax as he or she receives payments from the plan. A matured plan is a plan that is paying retirement income. In this case, the estate does not have to pay the tax.

If the plan is unmatured (not yet paying retirement income), and the annuitant designates a spouse or common law partner as the beneficiary, then the spouse or common law partner may elect to transfer the RRSP into his or her own RRSP, Registered Retirement Savings Plan, or qualified annuity, and pay tax when he or she receives payments. Again, the effect is that the estate does not have to pay taxes on the RRSP for the deceased’s year of death.

What if the annuitant designates his or her estate, as the beneficiary of an RRSP, but the annuitant’s spouse or common law partner is a beneficiary of the estate? In that case, the annuitant’s executor or administrator may be able to jointly elect with the spouse or common law partner to have the same rules apply as if the annuitant had named the spouse or common law partner as a beneficiary of the RRSP.

The Income Tax Act, Canada, has similar rules that allow tax to be deferred on an RRSP for beneficiaries who are the annuitant’s financially dependant children or grandchildren. In the case of a child or grandchild who is under 18, an annuity to age 18 may be purchased with the proceeds of the RRSP. Tax is then deferred until the years in which the child receives annuity payments.

In the case of a child or grandchild who is dependant by reason of a physical or mental infirmity (whether over or under 18), the proceeds of an RRSP may be transferred into the child or grandchild’s RRSP, Registered Retirement Income Fund, or annuity.

It is important to keep in mind that if you designate someone other than a spouse, common law partner, or financially dependant child or grandchild as a beneficiary of an RRSP, the tax burden of the RRSP will fall on your estate, rather than on the beneficiary. This may not be important if your RRSP beneficiary is the same person as the beneficiary in your will. But if you are naming others as the beneficiaries in your will, you may be leaving them less than you think, unless you take into account the fact that their share will be reduced to the extent that your estate bears the tax burden in respect of your RRSP.

I have one more exception to point out in this post—which I admit already has too many exceptions. Although the tax burden in respect of an RRSP may fall on the estate, if there are insufficient funds in an estate to pay the taxes, Canada Revenue Agency may collect the tax from the beneficiary of the RRSP.

For more information, see Canada Revenue Agency’s "Death of an RRSP Annuitant" here, and Interpretation Bulletin IT-500R "Registered Retirement Savings Plans -- Death of an Annuitant" here.

Sunday, April 09, 2006

B.C. Property Transfer Tax: Principal Residence Exemptions

In British Columbia there is a tax on the transfer of land under the Property Transfer Tax Act, RSBC 1996, c. 378. The usual rule is that if you transfer land, or an interest in land, the person to whom you transfer the land (the “transferee”) has to pay a tax of one percent of the fair market value of the land (or of the interest in the land if you are not transferring the whole fee simple interest) on the first $200,000, plus two percent to the extent that the value exceeds $200,000. At one time, with two hundred thousand dollars, you could buy a pretty nice new house, and most people had to pay one percent. Not anymore. Not in Kelowna.

The tax applies to the value of the land, which is not always the same as the price of the land. For example, if you give land away, or sell it for less than its fair market value, the recipient of your generosity still has to declare the value of the land, and pay property transfer tax when he or she registers the transfer at the appropriate Land Title Office.

Fortunately, there are a number of exemptions available, including an exemption on the transfer of a “principal residence” to a “related individual.” This is set out in section 14.

A principal residence is land on which either the transferor or the transferee has resided on the land for a continuous period of at least six months before the transfer, the buildings were designed to accommodate three or fewer families, the buildings are classified under the B.C. Assessment Act as residential, and the land does not exceed a half hectare.

If the land exceeds a half-hectare, but meets the other requirements for a principal residence exemption it will receive a partial exemption based on a formula set out here.

A related individual means:

“(a) a person’s spouse, child, grandchild, greatgrandchild, parent, grandparent or greatgrandparent,
(b) the spouse of a person’s child, grandchild or greatgrandchild, or
(c) the child, parent, grandparent or greatgrandparent of a person’s spouse.”

A spouse includes a married spouse and a person who “is living and cohabiting with another person in a marriage-like relationship, including a marriage-like relationship between persons of the same gender, and has been living and cohabiting in that relationship for a continuous period of at least 2 years.”

A related person does not include a brother or sister.

The exemption applies where a principal residence is passed through the deceased’s estate to a beneficiary who is a related individual to the deceased, and either the deceased or the beneficiary resided in the residence for at least six consecutive months before the deceased’s death.

There is also an exemption on a transfer of a principal residence from a trustee to a beneficiary of the trust if the beneficiary is a related individual to the person who either contributed the land on the trust, or contributed other assets used to buy the land. Either the contributor or the beneficiary must have resided in the residence for at least six consecutive months before the transfer. Please note that the Act does not set out an exemption on the transfer of the land from the contributor to the trustee.

The Ministry of Small Business and Revenue has published a bulletin on "Exemptions for the Transfer of a Principal Residence" here.

Saturday, April 08, 2006

Missing Original Will

What happens if you find a photocopy of a deceased person’s will, but cannot find the original?

In British Columbia, there is a presumption that if the original will was in the possession of the deceased, but is missing, the deceased revoked the will. If, however, you have a copy of a will, and can satisfy the court that the will was lost, rather than revoked, you may be able to probate the copy.

This issue came up in a decision released a couple of weeks ago. The Supreme Court of British Columbia dealt with a dispute among siblings in Andersson v. Khan, 2006 BCSC 521. This case involved a contest over two alleged wills, with allegations of forgery and much unpleasantness. In this post, I am going to confine my discussion to the issue of the missing original will.

Dr. Khan and his wife made mirror image wills in 1982 in which each left everything to the other. If, on death of one, the other spouse was not alive, each will provided that their son Sharaf Khan would receive Dr. Khan’s car, their house and land, and the contents of their house, with the residue of the estate going to another son, Insha Khan. They did not leave anything to any of their other four children in the 1982 wills.

In 1982, Dr. Khan and his wife also transferred their house into a joint tenancy with Sharaf.

Mrs. Khan died before Dr. Khan. After his wife’s death, Dr. Khan severed the joint tenancy on the house, so that he and Sharaf then held title as tenants in common. (In a joint tenancy, on the death of one joint tenant, the other takes title to the whole of the property by right of survivorship. The effect of Dr. Khan’s severance of the joint tenancy was that on his death, a half interest in the house would fall into his estate, instead of the title passing to Sharaf by right of survivorship.)

After Dr. Khan’s death Sharaf and Insha could not find the original will, but were able to probate a copy. The plaintiff, their sister Sari Andersson, challenged this.

Mr. Justice Williams set out the law as follows:

…a will may be presumptively revoked if the party propounding the will cannot provide the original will and fails to prove that the will was merely lost and not destroyed. In Sigurdson v. Sigurdson, [1935] 4 D.L.R. 529 (S.C.C.) at 4, Lamont J. cited this principle as follows:
Where a will duly executed, traced to the testator’s possession and last seen there, is not forthcoming on his death, the presumption is that it was destroyed by himself. To rebut it there must be sufficient evidence that it was not destroyed by the testator animo revocandi.

[38] This principle was later applied in Kumar v. Kumari, [1993] B.C.J. No. 108 (Q.L.), in which the original of the deceased’s last Will and Testament could not be found. The plaintiff sought to have an original copy of the will admitted into probate. The court stated at 8:

'The plaintiff is faced with rebutting the presumption of revocation. This principle of law provides that where a will is shown to have been in the custody of a testator, and is not found on his death, the presumption arises that the will has been destroyed by the testator for the purpose of revoking it.'

[39] The court went on to stipulate at 9, that the person propounding the will has a burden of proof that persists throughout the whole trial to satisfy the court at conclusion of the evidence that the will is in fact lost and was not destroyed by the testator with the intention of putting an end to it.

[40] Finally, where the presumption of revocation applies to presume that the testator destroyed the will, evidence of the testator’s actions following the making of the will may be adduced to show a continued intention to adhere or not to adhere to the dispositions made in the will: Kumari, supra at 16; Re Matt Estate (1954), 11 W.W.R. (N.S.) 28 (Man. C.A.).
In Andersson v. Khan, Mr. Justice Williams found that the evidence did not rebut the presumption that Dr. Khan revoked the 1982 will. Mr. Justice Williams found that it was significant that Dr. Khan severed the joint tenancy with Sharaf. If Dr. Khan had intended for the 1982 will to remain in effect, with the house to go to Sharaf, Dr. Khan’s decision to sever the joint tenancy would not make sense. There was also evidence of tensions between Dr. Khan and Sharaf.

Mr. Justice Williams, revoked the grant of probate of the 1982 will, and held that Dr. Khan died without a valid will. Williams J. ordered that the estate be divided equally among all six of Dr. Khan’s children in accordance with section 84 of the Estate Administration Act, R.S.B.C. 1996, c.122.

[Since I wrote this post, the British Columbia Court of Appeal has dismissed an appeal by plaintiff. The appeal is at 2007 BCCA 532. The appeal did not deal with the issue of whether the 1982 will was valid, but dealt with other issues between the parties. I have also edited this post to clarify that the presumption applies if the will was in the possession of the testator before it went missing.]

Monday, April 03, 2006

San Diego's Hall of Justice


My wife Michele took this photograph during our vacation in San Diego a couple of weeks ago. The building may only be about ten years old, but it is not without historic interest. According to the San Diego County Superior Court website,
The stained glass windows overlooking the central atrium in the Hall of Justice carry a history that curves back upon itself, much like the stylized foliage that graces so much Victorian art.

The windows were first installed in a San Diego courthouse in 1889. The 1889 courthouse was torn down to make way for a new courthouse in 1959. I am guessing that the website is referring to this monstrosity:
(Photograph taken by Michele Rule). For more information and pictures of the stained glass windows, check out the San Diego County Superior Court website here.

Sunday, April 02, 2006

What Does the Phrase "Per Stirpes" Mean?

Literally, the words “per stirpes” mean by roots or by stocks. These words are used in wills and trusts, but can be confusing.

I sometimes use "per stirpes" to describe a method of distribution among issue (in other words children, grandchildren, great grandchildren etc.) For example, I might direct my trustee to give what is left of my estate after paying my debts and funeral expenses to “those of my issue who survive me per stirpes.” When I write this, I mean that my estate will be divided equally among my children, but if a child has died before me, that child’s share will be divided equally among those of his or her children (my grandchildren) who are alive at my death. If both a child and one of that child’s children die before me (“my deceased grandchild”), then those of my great grandchildren who are the children of my deceased grandchild will share the portion that would have gone to their parent.

Say I have three children: Fred, John and Mary. Fred has four children: Jean, Frank, Sue and Paul. Jean has two children: Mike and Ray. If I leave my estate to my issue per stirpes, and Fred and Jean die before me, then John and Mary will each receive one third. If Fred had survived me, he would have received one third, but because he did not, his children will take his one third by representation. Frank, Sue and Paul will each get one twelfth (one quarter of one third.) If she had lived longer than me, Jean would have also received one twelfth. Because Jean has died, her one twelfth is divided equally between Mike and Ray, who each get one twenty-fourth. (I sure hope my math is right.)

If something is given to “issue per stirpes,” then if a person in one generation has died before the relevant time, members of the next generation take their deceased parent's share by representation.

This method of distribution can be contrasted with a “per capita” distribution. If I give my estate to “those of my issue alive at my death equally per capita,” then all of my children, grandchildren, and great grandchildren etc. who are alive at my death would receive an equal share. If I leave three children, six grandchildren, and four great grandchildren and no great great grandchildren alive at my death, each one would then receive one thirteenth of my estate.

I have sometimes seen wills that leave gifts to “my children per stirpes.” I am not sure what this means. I suspect that the drafter may mean the same thing as “to my issue per stirpes,” but it doesn’t really say that. If the drafter only wants the one-generation of children to inherit, then “per stirpes,” is meaningless. On the other hand, if the drafter means that if a child dies before the gift will take effect, then “children” must be given an extended meaning to include other generations.

Worst, I once dealt with a will in which the residue of an estate was left to one specific beneficiary “per stirpes.” The beneficiary had died before the testator. I represented the executor, who asked the court to interpret the will (which had been drafted by someone who was not a lawyer.) The court found that the testator intended for the named beneficiary’s children to take her share. The case is Royal trust Corp. of Canada v. Aitken, 1998 CanLII 4767 (BC S.C.). I think that this was the right result, but the court application would not have been necessary if the will had been properly drafted.

Because the words “per stirpes” can be misunderstood, some lawyers avoid them. I do use them occasionally, but my practice is to include a clear definition of the words “per stirpes” in the will or trust deed whenever I use them.