Wills and the rules of construction – Gifts of Property

As is often the case with poorly drafted wills, the Court is left to make an order as to the intention of the testator in circumstances where the testator is no longer able to give evidence. As a result, the Court has over the years developed various rules that are used in the construction of wills to assist testators and those drafting wills to ensure that the testator’s intention is reflected in the terms of the will. These rules of construction are complex and are generally subject to a contrary intention appearing in the will.

A fundamental rule in the construction of wills is that, in relation to the property of the deceased, the will speaks from date of the testator’s death and not from the actual date of the will.

For example, a testator may gift “my car to my daughter Rebecca”. At the time of executing the will the testator owned a Toyota Corolla. However, a few years later the testator sold the Corolla and purchased a BMW and later passed away. In this example, Rebecca will receive the BMW, even though the deceased did not own the BMW at the time of executing the will.

Conversely, a testator may gift “my Toyota Corolla to my daughter Rebecca”. If the Corolla is later sold by the testator and the testator did not own a Toyota Corolla when he or she passed away, the gift to Rebecca will fail. This is the case even if the testator sells the Corolla and leaves the sale proceeds in a bank account. The sale proceeds in the bank will fall into the residue of the estate and will not pass to Rebecca.

It is possible to avoid this rule of construction, by ensuring the will is carefully worded to clearly illustrate the testator’s intention. However, if the wording used in the will is ambiguous, it may be necessary for the executors to apply to the Supreme Court for guidance in the interpretation of the will. This is an expensive and lengthy exercise, which can be avoided by executing a carefully drafted will.

Another situation that should be considered when drafting a will is the devise of property subject to a mortgage or charge. For example, if at the date of the deceased’s death their house is subject to a mortgage, the beneficiary that is to take the house will also be liable for the mortgage attached. This rule also applies to personal property, such that the beneficiary who is to take an item of property which is subject to a legal or equitable charge, will also be liable for the charge so attached. Once again, this rule is subject to a contrary intention appearing in the will.

A review of the will should be conducted every few years, or when a person’s circumstances change, to ensure that gifts intended to pass to a particular beneficiary will in fact pass to that beneficiary. Further, if it is intended that a gift will pass free of the mortgage or charge, this will need to be specially set out in the will.

The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.