Tuesday, April 08, 2008

Young v. Abercrombie

Donald William Abercrombie had two children, Kim Young and Barry Abercrombie. He made a will on November 19, 1981 in which he left his estate to be divided between his two children. If either died before him, the deceased child’s share would go to that child’s “issue per stirpes.”

In October, 2004, after his son Barry Abercrombie was diagnosed with Alzheimer’s disease, Donald Abercrombie made a codicil to allow his daughter Kim Young to manage the money he left to his son Barry Abercrombie. Unfortunately, he wrote his own codicil instead of getting it done by a lawyer. The clause read,

Should either of my children become incapacitated due to illness or accident it is my instruction that my Trustee invest my incapacitated child’s share of my estate into investments or a form of annuity. My Trustee shall have the sole discretion to invest monies and advance monies as she or he she sees fit.

In all other respects I confirm this will.
After Donald Abercrombie’s death, Kim Young invested one-half of the estate, almost $600,000, for her brother.

When Barry Abercrombie died in 2007, there was still a significant amount of money left from the funds his sister invested for him.

The problem with codicil Donald Abercrombie wrote was that it didn’t say what would happen to any funds left if Donald Abercrombie died before the money was spent on him.

Kim Young, as the executor of her father’s will, brought an application to court to determine what should happen to the remaining funds.

In Young v. Abercrombie, 2008 BCSC 389, Madam Justice Dorgan considered two possibilities.

One possible interpretation is that the codicil didn’t really change the distribution in the will. Donald Abercrombie was entitled to one-half of the estate on his father’s death. In legal terms, his half-interest vested absolutely in him when his father died. If this interpretation were correct, then the funds will go to his estate and pass under his will to his wife.

The other possible interpretation is that Donald Abercrombie’s will and codicil did not completely dispose of his estate. Under this interpretation, Barry Abercrombie was only entitled to those funds paid to him from the half of the estate invested for him. Any remaining funds remained an un-disposed portion of Donald Abercrombie’s estate. If this interpretation were correct, under the intestate distribution provisions in British Columbia, one half of the remaining funds would go to Barry Abercrombie’s children, and the other half would go to Kim Young. In effect Kim Young would get about three-quarters of her father’s estate, while Barry Abercrombie and his family would end up with about one quarter.

Madam Justice Dorgan held that the first interpretation is correct. Barry Abercrombie became entitled to one-half of his father’s estate on his father's death.

In reaching her conclusion, the judge considered the overall scheme of the division under the will, which gave half to each child or child’s children if the child died before Donald Abercrombie. She also closely examined the language of the codicil which used the words, “incapacitated child’s share.” The wording implied that the share was vested.

Finally, Madam Justice Dorgan applied the presumption of law that if a will can be reasonably interpreted in two ways, one of which disposes of the entire estate, and another which leaves part of it un-disposed, the court should interpret the will in the way that avoids intestacy.

Accordingly, Barry Abercrombie’s widow was entitled to the remaining funds. She advised the court that she intended to share those funds with their children.

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