WA Questionable will interpretation used to exclude beneficiaries. Advice Required

Discussion in 'Wills and Estate Planning Law Forum' started by Dwain Lyndon, 17 September 2019.

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  1. Dwain Lyndon

    Dwain Lyndon Active Member

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    Hi there,

    My great Aunt passed recently and she left her estate to her Nieces, Nephews and a Cousin via her will.

    My father was one of her nephews, he and 3 of his brothers were deceased prior to my great Aunt writing her will, however she was fully aware that several of her nephews had passed and that they had children. It appears she considered her deceased nephews estate benefits when drafting the will by including clause 10.2 as follows:

    Clause 10.2: "If any of those named as beneficiaries fails to survive me by 28 days leaving children who Survive me by 28 days who attain the age of 25 years then those children shall take the share of the residue of my estate that their parent would have taken had they survived, and if more than one in equal shares as tenants in common"

    Unfortunately the estates executor who is a beneficiary of the estate and stands to benefit to the tune of hundreds of thousands of dollars by excluding the children of the deceased nephews has taken a different view:

    "It is the executor’s view, based on advice she has received, that the correct legal interpretation of the clause 10.2 is to exclude the children of the nephews who were already deceased at the time the Will was made. The executor therefore intends to distribute the estate excluding the siblings of the pre deceased nephews"

    I want to get some legal advice on whether we are being shafted by the executors interpretation or not?. It seems to me that the wording of clause 10.2 would be a fairly common wording within Wills, so surely the interpretation of it must be quite standard?. Is clause 10.2 designed to include or exclude the children of deceased beneficiaries? If it was designed to exclude deceased beneficiaries and their children, then it seems utterly pointless to even mention it, because standard implementation of the law is such that beneficiaries who die before the testator are automatically excluded.

    I believe the only logical reason for my great Aunt to included clause 10.2 would be to preserve the benefits for deceased Nephews and Nieces children in cases where the beneficiary is not alive to receive their part of her estate. My impression is that the executor is playing an interpretation game in order to get their hands on a significant additional percentage of the estate. Thoughts??? Any advise on the normal interpretation is greatly appreciated.
     
  2. Rob Legat - SBPL

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    There’s possibly not enough information to tell, because there’s no context given to 10.2 as you haven’t given us the rest of the clause. To explain, and assuming the clause which leaves the bequest to the nephews is 10.1:

    - If 10.1 specifically names them as a beneficiary, there’s an argument it could go to their children;
    - If 10.1 just says “to my nephews”, it could go the other way;
    - If 10.1 says something like “such of my nephews as shall survive me”, then it’s not likely it was intended to go to their children.

    The thing is, there’s a statutory presumption in many states that I’m aware of that if someone fails to survive the testator for a certain period (often 30 days; I guess 28 in WA) then they’re deemed to have died at the same time (i.e. not to have survived the testator). By including 10.2, this overcomes that presumption by not having that bequest fail because the particular nephew may not have made it to the 28 day mark. The question is, the answer to which may come from the rest of the will, whether it was intended to only go to the surviving nephews at the time of death.

    You may also find that if your great aunt had intended to have each nephew’s share go to their children, and some of those nephews died some time ago, then the question will be asked: why did she not create a new will to make that clear?
     
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  3. Dwain Lyndon

    Dwain Lyndon Active Member

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    Thank you for your insightful feedback Rob. To add context, Clause 10.1 states

    "Clause 10 1: My executors shall give the residue of my estate to the following if they survive me by 28 days and in equal shares as tenants in common:

    (a) My Cousin------------; and

    (b) My nieces and nephews"

    In your opinion does this mean the executors interpretation would most likely be accepted in a court of Law?

    The executors solicitor has also stated:

    The cases of Re King (1932) 32 SR (NSW) 669, Shelton v Kilsby [2000] WASC 180, Farrelly v Phillips [2017] SASCFC 111 and Re McPherson (deceased) [1968] VR 368 have been considered when determining this.

    If the above details make it a pretty clear cut case and my brothers and I are not due any of the estate, thats fine. However we happen to have an exceptionally greedy estranged Aunt involved with the estate who, to everyone's dismay, spends a large part of her life repeatedly going after every deceased relatives assetts in a range of outlandish ways. Its fair to say she has turned it into her preferred side business. So we simply want to ensure that she is not trying to fleece us because unfortuntely thats how she rolls.

    I contacted the lawyers firm who drafted the will and the lawyer who witnessed it for their opinion on what my great Aubt was aiming for, but they are not forth coming. Since they were paid a professional fee specifucally to eliminate confusion and ambiguity regarding the will, I would have thought they would be obligated to clarify but apparently not. Is their a way to obtain their notes on the case perhaps?

    Thanks again for your insights.
     
  4. Rob Legat - SBPL

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    This gives it away fairly clearly for my mind. The cousin, nieces and nephews get an equal share of the residue of the estate only if they survive your great aunt for 28 days. In practical terms:

    - Wait 28 days from the date of death;
    - Look at the pool of potential beneficiaries (cousin, nieces, nephews);
    - Determine who is living of that pool (the 'survivors'); and
    - Divide the residue equally between those survivors.

    I think the executors' determination is correct. Had the "if they survive me by 28 days" not been included, then it may be a different proposition.

    That doesn't necessarily preclude the ability to make a family provision claim, but you'd need to get specific advice about that from a lawyer who practices in estates disputes in WA. Also be mindful that there are often strict time limits to lodging an application for family provision.
     
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  5. Dwain Lyndon

    Dwain Lyndon Active Member

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    Thanks Rob,

    Understood that 10.1 does not cover the deceased nephews. Are you saying then, that clause 10.2 can only be activated within a 28 day time window starting from the day of my Great Aunts death until 28 days there after?

    10.2. " If any of those named as beneficiaries fails to survive me by 28 days leaving children who Survive me by 28 days who attain the age of 25 years then those children shall take the share of the residue of my estate that their parent would have taken"

    If its only a 28 day window then I guess its an open and shut case? or is it?
     
  6. Rob Legat - SBPL

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    No, I'm saying that the operation of clause 10.1 appears to mean that 10.2 doesn't even get looked at because the bequest to the nephew (cl 10.1) is contingent on them surviving for at least 28 days beyond your great aunt. If that doesn't happen, then they don't even form part of 10.1 - and therefore there is nothing for 10.2 to 'hook' on to.

    It's redundant drafting which makes it uncertain. If it was intended to go to the children, then a clearer way of expressing it (in simple terms and paraphrasing) would be:

    "I give my estate to X, Y, and Z equally as tenants in common provided that if any of X, Y, or Z fail to survive me for 28 days leaving children who also survive me for 28 days, then such children shall take, in equal shares as tenants in comment, the share of my estate which their parent would have taken had he or she survived me and attained a vested interest."
     
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  7. Dwain Lyndon

    Dwain Lyndon Active Member

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    Thanks again for your forthright feedback Rob. Its appreciated and it really helps to clarify the matter for us.

     
  8. Perp

    Perp Well-Known Member

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    This is not clear cut, and is a result of poor drafting. It's not standard, and there are many similar cases in case law, which are problematic and often decided in different ways; it will depend very much on the overall context (which we don't have).

    But based on what you've told us, reviewing some cases, and consulting with colleagues, I think you may have a case.

    The argument of the executor seems to be that 10.1 defines the class members to inherit - "nieces and nephews who survive me" - and that 10.2 is a substitutional gift provision, ie if members of the class from 10.1 can't inherit, then their gift should be distributed to another person. The executor appears to be contending that the dead nieces and nephews don't inherit anything under 10.1, so the matter of who'd inherit 'their share' is moot, because they have no share.

    But if that construction is correct, then what's the point of 10.2?

    It's a principle of constructing wills that the testator must have put in each clause for a reason, and the apparent reason for inserting 10.2 is arguably that it was intended to be an independent gift (independent of 10.1), rather than a substitutionary gift provision relating to 10.1. (See para 42 onwards of Farrelly v Phillips for a further explanation of the distinction.)

    ie I think it's arguable that the testator wanted the offspring of her nieces and nephews to inherit, even if their parents had died, and thus included 10.2 as an independent gift.

    There are other factors that may go against such an interpretation - eg if those offspring of dead nieces and nephews received other gifts under the will - but I think it's worth seeking further legal advice about.
     
  9. Dwain Lyndon

    Dwain Lyndon Active Member

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    Yes that was my contention all along. Clause 10.2 would seem to be an utterly pointless inclusion unless it was intentionally included to clarify the benefits of the deceased nephews, nieces and their children. The children of the deceased nephews did not receive any other gifts under the will in fat there were no benefits to anyone besides clause 10.1 and 10.2. My aunties property is valued at around $575K with no debt and there are other assets including antiques etc on top of that. There are 7 children of the deceased nephews who, if the executors interpretation of the will is successfully contested would be due over $300k. If we can locate an estate lawyer who would take this case on in a no win no pay basis all 7 of the children of the deceased nephews have indicated that they would like to have the clause interpreted by a judge. Do you know anyone who might be interested?
     
  10. Perp

    Perp Well-Known Member

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    What state are you in?
     
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