Sometimes, people in second marriages who make wills balance two loyalties. On the one hand there are the children of the first marriage. On the other hand there is the new spouse. The road often travelled is to provide the spouse with a life interest in the estate assets. But, what does that mean? For example, who should pay the realty taxes or repairs? What about landscaping or utilities? If the intent was to provide the spouse with income to support her is she entitled to give that money away to someone else? Well – that depends on what the will says.
In interpreting a will, the court will endeavour to determine the will maker’s intentions by reviewing the will as a whole and interpreting it based on the plain meaning of the words used.1 4 D.L.R. 173 (S.C.C.) at para. 21.] This has been referred to as the “golden rule”. 2 There is also the “arm chair rule”. Applying this rule the judge will “sit in the place of the testator” and from the language of the testamentary document try to understand the intention of the testator.3 Disputes can often arise over small details or multiple understandings of the language used.
You might ask, why not just ask the lawyer who drafted the will. After all, wouldn’t the lawyer who took the will-maker’s instructions know what the testator’s intentions were? In Ontario, courts view this type of evidence as “direct extrinsic” evidence.4 This evidence is inadmissible unless there is an equivocation. What is an equivocation? Here is one example of ambiguous language which might compel a judge to look outside the will: “I gift my cottage property to my cousin John”. What if the deceased had two cousins named John? What if the deceased had more than one cottage property? In the examples cited above the judge would allow the extrinsic evidence in because of the equivocation. But, often the court feels the interpretation should only be resolved by just looking at the will. So, the actual wording of a testamentary document is very important.
The significance of seemingly small details in a will was recently brought to light in the Ontario Court of Appeal case of Holgate v Sheehan Estate.5 John Holgate had a left a will and codicil that provided his wife, May Holgate, with a life interest in two trusts. This means that Mrs. Holgate would have a beneficial interest in the property of the two trusts during her lifetime. After her demise the remaining assets of the trust were to go to the testator’s children from his first marriage. Mrs. Holgate used the money from the two trusts for her expenses, but she also saved some of the money outside of the trust, thereby accumulating money in her own name. When Mrs. Holgate died in 2012, most of her estate was left to her biological children. Mr. Holgate’s sons brought a lawsuit, based on a disputed interpretation of Mr. Holgate’s will. Mr. Holgate’s sons took the position that Mrs. Holgate’s life interest from their father allowed her to use the money, but not to save it.
The first trust in question, referred to as the “Holgate Trust”, provided:
To hold and keep invested the residue of my estate or the amount thereof remaining for the sole use and benefit of my wife, May Holgate during her lifetime, with power and authority to my Trustee to draw on both the income and the capital of my estate for the care and support of my said wife, as my trustee in their discretion considers advisable. In availing themselves of this discretionary power to encroach on the capital of my estate for my wife’s benefit, it is my strong wish and desire that at all times my Trustee’s first consideration shall be my wife’s well-being and comfort and that all her needs and requirements of every kind shall be provided for adequately in all respects out of my estate, as I do not feel that my estate need be largely conserved for the future use of my children and stepchildren. I therefore authorize and empower my Trustee to be generous in the exercise of this discretionary authority, even though there may be a considerable, or if necessary, total depletion of the capital of my estate by reason of such encroachments. [emphasis added]
The second trust in question, referred to as the “UK Trust”, provided:
To hold all my interest in real and personal property situated in the United Kingdom for the sole use and benefit of my wife May Holgate, during her lifetime with power and authority to my Trustee to draw on income, [but not the capital] of the said real and personal property for the use and benefit of my said wife, and on her death to pay or transfer to such of my sons, John Edward Holgate and Stephen Craven Holgate … [emphasis added]
The crux of the argument of Mr. Holgate’s sons was based on the interpretation of the word “use”. The sons submitted that by saving the money in her own name, Mrs. Holgate was not “using” the money, as she was entitled according to the trusts.
In the Court of Appeal’s efforts to interpret Mr. Holgate’s will, the Court of Appeal only looked to the will. The judges ascertained from the will, based on the “golden rule”,6 that the deceased intended for there to be no limitation on the discretion of the trustees to draw on income or encroach on capital, as the case may be, and that there be no prohibition on Mrs. Holgate saving money in her own name. This conclusion was supported by many phrases in the trusts, including:
- “for the sole use and benefit of my wife”;
- “power and authority to my Trustee to draw on both the income and the capital of my estate for the care and support of my said wife, as my Trustee in their (sic) discretion considers advisable”;
- “it is my strong wish and desire that at all times my Trustee’s first consideration shall be my wife’s well-being and comfort and that all her needs and requirements of every kind shall be provided for adequately in all respects out of my estate”;
- “I do not feel that my estate need be largely conserved for the future use of my children and step-children”; and
- “I therefore authorize and empower my Trustee to be generous in the exercise of this discretionary authority, even though there may be a considerable, or if necessary, total depletion of the capital of my estate by reason of such encroachments”.
This case is a good example of how a court will deduce the intentions of a deceased person who of course cannot be a witness at trial. The Court of Appeal looked at the “totality of the wording” of the will to make their determination. The language of the will showed the deceased’s intention that Mrs. Holgate should have no limitation on her “use” of the trust funds. The case is also a good example of how important close attention to detail can be in the drafting of a will. Could extensive litigation have been prevented if the drafting solicitor was more precise on the limits of Mrs. Holgate’s actions with the trust funds? Probably not. No matter how careful a solicitor drafts a will he/she cannot deflate the feeling of unfairness by an aggrieved party or avoid a creative barrister’s ability to litigate.
- Holgate v Holgate, 2015 ONSC 259, at para 15, citing Smith v. Chatham Home of the Friendless, [1932 ↵
- Dice v Dice Estate, 2012 ONCA 468, at para 36. ↵
- We refer the reader to Kimberly Whaley’s paper found at presented at The17th Annual Estates and Trust Summit Entitled “Where There’s (Not) A Will: Intestacies, Partial Intestacies and Remedies”. It can be found on line at http://whaleyestatelitigation.com/resources/WEL_Intestacies_Partial_Intestacies_and_Remedies_Oct2014.pdf . The paper, in part, analyzes two rules of will interpretation. In her paper Ms. Whaley states,
The primary rule of will interpretation is that the court should strive to give effect to the testator’s subjective intentions. The court will apply the general “golden rule” that presumes that a testator did not intend to die intestate. Accordingly, if a will has two possible constructions one of which would make an effective disposition of all or part of the estate, and the other would result in intestacy, a court may prefer the former. In Ontario, a lapsed residuary gift also passes upon intestacy to the deceased’s spouse or next of kin, unless there is a contrary intention in the will….
To determine the testator’s intention, the Court will invoke the so-called “armchair rule”where the Court will “sit in the place of the testator”:
‘In the interpretation of a will, as contemplated in Re Burke, (1960) O.R. 26 (C.A.)at p. 30, a court must ascertain the testator’s subjective intention at the time of execution of the will: Each Judge must ‘endeavour to place himself in the position of the testator at the time when the will was made. He should concentrate his thoughts on the circumstances which then existed and which might reasonably be expected to influence the testator in the disposition of his property’ ↵
- We refer the reader to T.G. Feeney, The Canadian Law of Wills, 3d ed. (Markham, Butterworths, 1987) at 66-67. The learned author states,
“Apart from the will itself, evidence of the testator’s actual intention, that is, direct extrinsic evidence of intent, for instance, the instructions which he gave his solicitor for the preparation of his will or his declarations as to the persons or property which he meant to include under a particular expression are inadmissible except where an equivocation occurs. There is an equivocation only where the words of the will, either when read in the light of the whole will or, more usually, when construed in the light of the surrounding circumstances, apply equally well to two or more persons or things. In such a case extrinsic evidence of the testator’s actual intention may be admitted and will usually resolve the equivocation; if it does not, however, the gift fails for uncertainty.” ↵
- 2015 ONCA 717. ↵
- At the trial level, the Superior Court of Justice stated that due to the strong statement of the testator’s wishes in the will, there is no need to look to the “armchair rule”. See Holgate v. Holgate, 2015 ONSC 259, at para 46. ↵