Interpretation of Wills
There are well established principles of interpretation of Wills. A Will takes effect at the date of death. It takes effect with reference to the assets and liabilities of the deceased, at the date of his death. It is interpreted in light of those circumstances. It does not matter that the will was made many years before. Certain principles which apply if the persons who is benefited in the Will is no longer alive or if specific assets are mentioned in the Will, which are no longer owned by the deceased at the date of death.
Although the formalities for executing and giving effect to a Will are strict, the principles applied in interpreting the testator’s wishes are flexible. The testator’s intention is paramount. Technical language is not required. The Courts look at the Will as a whole and give effect to the intention as appears from the words.
If it is clear that certain words are missing in error and it can be implied that the intention is that they should be included, a Court will interpret them into the Will. Similarly, the executors should interpret the Will according to its ordinary meaning and the intention of the testator. However, there are limits. Where the deceased’s intentions are clear, then effect must be given to it. The Courts will not rewrite a Will which they infer that a testator would want to make.
The general principle is that words in a will should be given their normal and natural meaning. If the testator makes the Will using technical legal language (or rather the solicitor drafting it) then effect may be given to this language.
Provision in the Will is capable of more than one interpretation and is not clear which was intended then it should be interpreted in such a way as to give effect to a bequest or gift.
Words will be interpreted in context. Words by themselves may have a general meaning but in the context of more specific language it may be clear they are intended to be limited in some ways.
If the interpretation of a Will is clear and unambiguous then effect will be given to it. If however the words by themselves are uncertain or ambiguous the Court will look at extraneous evidence of the circumstances to ascertain what the intention of the Will maker was. In this case the evidence of the solicitor making the Will or other circumstances about a person’s life or relatives or intended beneficiaries may be allowed.
The Succession Act allows evidence to be admitted of the intention of the person making the Will to assist in its interpretation or explain any contradictions. Courts have decided that this was not change the older rule that such evidence will only be allowed if the testator’s intention is not clear from the face of the Will.
Although a Will takes effect at the date of death questions of interpretation and intention refer to the time the Will was made.
Devise or the word devise as used in a Will is an old-fashioned word referring to a gift of land or buildings. The word legacy or bequest would refer to other assets.
A specific legacy usually refers to a particular asset. A general legacy is usually a sum of money.
A residuary gift or legacy refers to the remaining assets after specific legacies. It refers to assets not otherwise specifically given. Specific or general legacies and bequests stand separate and the reduces the residue accordingly. If there is no money to pay all the general legacies they will reduce proportionately.
In the case of a specific legacy of an item and it will not reduce proportionately until all other assets have been reduced e.g. where necessary to pay debts.
If a specific asset is left and is no longer held at the date of death the gift is ineffective.
There is a presumption that interest is paid on legacies from one year after death. Interest does not arise on other legacies but if assets are income bearing, interest arising on the asset accrues to the person entitled to the benefit from the date of death.
There are general presumptions regarding the allocation of debts and mortgages on benefits. Where a property is left subject to a mortgage, the mortgage is presume to be primarily paid out that asset unless the deceased otherwise directs. This covers mortgages, charges and tax on the benefit.
Wills can be combined with trusts provide a so called Will / trust. In this case the Will leaves assets to a trust to be held for the benefit certain persons over time. See our separate chapters on trusts in this regard.
Apart from trusts it is possible to have a so called conditional or contingent gifts. Such gifts are quite common in Wills. A contingent gift is a gift that is dependent upon a condition. Commonly contingent gifts are in favour of persons subject to reaching a certain age.
In this case before reaching that age the asset would not go to their beneficiaries but would pass back in accordance terms of the Will to other beneficiaries. If on the other hand the gift was unconditional or vested and the right of enjoyment was postponed then if they died before the relevant age the benefit of the asset concerned would pass to their beneficiaries.
The precise wording of gifts can be very important in the context of inheritance tax which taxes assets at the moment the ownership vests in the beneficiaries.
There is a presumption that gifts should be interrupted so that the ownership vests at an early date. Gifts are commonly given to minors upon attaining the age of say 21 or 25 years. The Courts tend to favour an interpretation which gives effect to an immediate vesting. This has implications in terms of inheritance tax.
It is common for a gift to be made to children upon or subject to obtaining the age of 21 years. If the actual entitlement does not arise until 21 language will need to clearly state this.
Where a gift or legacy is made to a person under the age of 18 years he cannot give a receipt for it because he does not have legal capacity. It is best practice to leave gifts for children to trustees to hold for them until they reach the age of majority or a later age. This allows the personal representative to pay the gift to the trustee and thereby get good receipt.
If no trustee is appointed the Succession Act provides that the personal representatives may appoint two or more persons including themselves to act as a trustee of the benefit while the beneficiary is under 18.
The Succession Act also gives trustees powers to deal with property which they hold for person who become entitled to them, upon reaching a certain age. They may retain the assets in theirstate or convert and invest the proceeds into certain authorised investments. The trustees have the power and the discretion to advance capital or income for the benefit of the infant while under 18.
If a person named in the Will as taking a benefit dies before the testator the gift usually “lapses” or fails. This is a presumption. It may appear from the circumstances that the intention was to leave a gift to a particular person and his estate. It would have to be particular wording to suggest this interpretation.
When a gift lapses it goes to the persons named as taking the remainder of assets. It is said to “fall into the residuary”. It is not taken say proportionately by all beneficiaries. This follows logically from the wording of the residue clause i.e. the clause that leaves the remainder.
If there is no clause leaving the remainder of assets to any person the benefit may become subject to the rules on intestacy.
Sometimes Wills may specifically provide what is to happen to a particular asset in the event that the named beneficiary predeceases the deceased.
In the case of charities a gift will not generally fail simply because the charity ceases to exist. There is power for the Charities Regulator to apply the gift to a similar or close purposes. See our chapter on charities.
There is a special rule where a gift is left to a child (or indeed a remoter descendant such as a grandchild) where that beneficiary dies themselves leaving children. The Succession Act states that in such circumstances the beneficiary is deemed to die immediately after the person making the Will. This means that the asset or benefit then goes in accordance with the beneficiary’s Will or intestacy.
The legislation however has an effect that might seem surprising. Because the asset goes in accordance with the beneficiary’s Will or intestacy it may, for example, go entirely to a spouse if he left all his assets to his spouse or if he made no Will two thirds to his spouse and one third to his children.
This may not have been what the testator intended. It is a fact that children causes the gift to survive but the children may only obtain a third or indeed no share at all. Wills commonly provide specifically that if a child or the testator dies leaving children that those children will take the share of their deceased parents.
If a gift is left to a beneficiary in fulfilment of a legal or moral obligation this will not generally lapse.
It is common for spouses to leave all their assets to each other but to provide in the event that if one spouse predeceases the other that the assets go to their children. Generally it is provided that for such clauses to apply one spouse must survive the other for a period commonly chosen as 30 days.
There is special legislation dealing with the position where two persons die in circumstances where it is not clear who has survived the other. This may happen in an accident scenario. In this situation each is deemed to predecease the other so that benefits to the other under a Will lapse. In the case of joint tenants neither is deemed to have survived the other so that half would pass into each estate.This rule does not apply where it is possible to determine who died first.
Certain persons are precluded from taking a benefit under a Will. Persons who have been found guilty of murder or manslaughter of the deceased may not inherit.
A spouse who is deserted of the deceased for upwards of two years may take a benefit under the Will.
Where a person committed an offence against the deceased or his spouse or children punishable by imprisonment for more than three years he may not take a benefit. He is deemed to have predeceased the deceased.
If the gift of a specific item is left no longer exists at the date of death the benefit is presumed to cease. In the absence of specific wording the beneficiary does not receive cash or an equivalent.
If one type of asset has been substitute with another the Will might take effect in relation to the other.