INTERPRETING A WILL AND DECIDING WHAT BEQUESTS AND LIABILITIES SHOULD BE FULFILLED

Is the document a valid will?

The first thing to do when considering a will is to make sure that it is the last legally effective will. This subject has been dealt with in Chapter 6, pages 57 to 64.

What does the will mean and are the bequests legally effective?

Wills that deal with foreign property

When considering the provisions of a will in respect of any property the testator may have which is situated abroad, it is necessary to consider the foreign law relating to the property and the making of wills, even if the will is made in the United Kingdom. Some countries have restrictions in relation to who can inherit property and the tax laws relating to property differ from those of English law. The procedure and formalities for making a will that is to be recognised by the foreign country as a valid document of title to the property are also usually different from those of England and Wales.

When dealing with wills which have a foreign element it is essential to seek the assistance of a lawyer qualified to practise in the foreign country. The Law Society or the relevant foreign embassy will be able to supply contact details of a suitable lawyer.

Section 41 of the Inheritance Tax Act 1984

When distributing the assets of an estate and dealing with a bequest which under the law would be exempt from inheritance tax, it is necessary to bear in mind this statutory provision which will apply whatever the will might say to the contrary.

The relevant bequests which under the law are exempt from inheritance tax are:

• gifts of any amount to a spouse or civil partner, unless the testator is domiciled in the United Kingdom but the spouse or partner is not, in which case the exemption is limited to £55,000.
• gifts to registered charities for charitable purposes.
• gifts for certain national purposes including gifts to most museums and art galleries and to political parties which have at least 2 sitting members of the House of Commons or which have 1 sitting member and whose candidates polled 150,000 votes at the last general election.
• gifts of land to registered Housing Associations.

In essence the Section means that such a bequest shall not be made to bear, either directly or indirectly, any of the inheritance tax payable on the death. If a will gives the testator’s estate to his executors or trustees, for example, ‘upon trust to use it to pay my funeral and testamentary expenses, debts and inheritance tax payable in respect of my estate and to divide what remains equally between such of my wife and my son as shall survive me and if both then equally between them’, the executors must first pay the funeral and testamentary expenses and debts, secondly notionally divide what remains equally between the surviving wife and son and thirdly pay all the inheritance tax out of the son’s notional share before distributing what remains of the son’s share to him and the widow’s share to her. To pay the inheritance tax, as the will directs should be done, before making the notional division between the widow and the son, would be in breach of Section 41 in that it would be indirectly making the widow’s share (which is by statute exempt from inheritance tax), bear tax.

Uncertainty, ambiguity and the court’s power to rectify a will to carry out the testator’s intention

If a court is satisfied that a will does not carry out the testator’s intention because of a clerical error or the failure of the person who prepared the will to understand the testator’s intentions, the court can rectify the will so as to carry out the testator’s intentions e.g. if a clause has been omitted by mistake. However, courts have very limited powers to look beyond the wording of a will to ascertain the testator’s intention. They are only permitted to do so if the wording of the will is meaningless or if it is shown to be ambiguous on the face of the will or in the light of surrounding circumstances. If this is not so and the wording of the will appears to show the testator’s intentions clearly, the courts have no power to hear evidence as to what was actually intended and must give effect to the testator’s wishes as expressed in the will, even though external evidence would have shown that the wording of the will did not express those wishes correctly.

If the intention in any part of the will is still not clear after taking into account any external evidence which it is permissible to consider, a court and the executors must ignore that part of the will and it will not take effect.

Bequests which fail to take effect

The effect of divorce or annulment of marriage or annulment of civil partnership

Dissolution of marriage or civil partnership does not invalidate a Will, but a decree absolute (not a decree nisi), makes any bequest in the will to the spouse or civil partner take effect as if the former spouse or partner had died on the date the decree becomes absolute, leaving bequests in the remainder of the will valid. Usually the bequest will become part of the residue of the estate and go to the residuary beneficiaries, but if the bequest is of the entire estate or of a share of the residue of the estate, it will be treated as not having been disposed of by the will and will be inherited according to the laws of intestacy.

Similarly, the provisions in a will conferring powers of appointment on a spouse or partner (i.e. power for him to appoint or choose a beneficiary for part of an estate) or appointing him as an executor or trustee, take effect after a decree of dissolution of marriage or civil partnership as if the former spouse or civil partner had died on the date the decree became absolute.

Unless a contrary intention is apparent from the will, an appointment of a spouse or civil partner as a guardian of an underage child is revoked by a decree absolute, annulment or dissolution which is either made in a court in England or Wales or would be recognised by such a court.

Bequests to the witness to a will or witness’s spouse or civil partner

Two independent witnesses to the testator’s signature to a will are required to make a will or codicil valid, and if a beneficiary or the beneficiary’s spouse or civil partner witnesses the will or codicil, the intended beneficiary will lose the bequest made by the document unless the offending witness’s signature can be regarded as superfluous because there are two other disinterested witnesses.

If there are not two other disinterested witnesses, although the person who is named in a will as the beneficiary will lose the bequest, the remainder of the will will not be affected.

Bequests contrary to public policy

Conditions attached to gifts and gifts themselves may be void and of no effect because they are contrary to the public policy of the moment. Exactly what is considered to be contrary to public policy changes from time to time and if there is any doubt advice from a lawyer should be sought. A few general principles can be stated.

Conditions that weaken the family unit or the institution of marriage are contrary to public policy, as are conditions that interfere with the choice of one’s religion. Therefore a condition attached to a gift to a son that it is dependent upon the son leaving his wife or converting to Catholicism will not take effect because both conditions are void being contrary to public policy.

Conditions contrary to the inherent legal nature of property, e.g. that it shall not be sold or shall be boarded up and not used for a long specified time, are contrary to public policy.

A provision in a will that a bequest is to be forfeited if the beneficiary challenges the will is not considered to be contrary to public policy, but the bequest might fail to take effect for reasons of uncertainty, unless it is carefully drafted.

If the condition upon which the bequest is given is merely prohibited by law or public policy, the condition will be void, but if the bequest is considered to be essentially evil, e.g. a bequest conditional upon murdering someone, the bequest will fail completely.

If the intention is that the gift shall only take effect if the condition is fulfilled (i.e. the condition is what is known as a condition precedent) and the condition is void, the gift will fail completely, but if the intention is that the gift shall take effect but cease if the condition is fulfilled, i.e. the condition is what is known as a condition subsequent, the gift takes effect free from the void condition. An example of a gift with a condition precedent is a gift to a son if he successfully completes the university course he is taking, and an example of a condition subsequent is a gift to him, but if he fails the course, then to the testator’s daughter, although both of these conditions are of course valid ones.

Gifts which break the rules against perpetuities and accumulations

The law contains very complex rules which prevent the income from a bequest being accumulated and added to the capital of the bequest by the personal representatives for an excessive period, rather than distributed to the beneficiary, and which prevent bequests being made to beneficiaries whose identity might not be ascertained for an excessively long time in the future. These rules are known as the rules against perpetuities and accumulations and are mainly contained in The Perpetuity and Accumulations Act 1964. If a bequest has been made and the identity of the beneficiary might not be ascertained within twenty-one years of the testator’s death, e.g. a gift ‘to my grandchildren whether born before or after my death’, be sure to consult a solicitor about the wording and its legal effect. Similarly if the income from a bequest is to be accumulated for a period which could exceed twenty-one years, consult a solicitor.

If in doubt, take legal advice.

Irreconcilable bequests

Generally speaking, if two clauses of a will are clearly irreconcilable, effect should be given to the later clause and not to the former, but again, if there is the slightest doubt, take legal advice.

Insufficient assets

If there are insufficient assets to pay all the debts and liabilities there is a specific, complex order in which the debts must be paid and it is essential to seek legal advice.

Properly payable debts, liabilities of the estate and funeral and testamentary expenses are payable in priority to bequests made by the will or claims to entitlement by the next of kin.

When there is sufficient money to pay all the funeral and testamentary expenses and the debts and liabilities of the deceased, but insufficient to pay all the beneficiaries named in the will, then unless there is any contrary provision in the will, those who are bequeathed specific things should have their bequests first, followed by those who are bequeathed specific amounts of money. If there is not enough to pay all the gifts of money they are reduced in proportion.

Bequests to people who have predeceased the testator or organisations which have ceased to exist

Unless there is a provision to the contrary in the will or the gift is made to fulfil a moral or legal obligation (e.g. to repay a debt which has been discharged under the law of bankruptcy or which is statute barred), a gift made by will to a person who died before the testator or to an organisation which no longer exists at the time of the testator’s death fails and does not take effect. An exception to this general rule is contained in Section 33 of the Wills Act 1837 (as amended). By this section a bequest to a descendant of the testator who dies before the testator, leaving a descendant who is living at the testator’s death, will take effect as a bequest to the descendant who is living at the testator’s death, unless the will shows a contrary intention.

Bequests of items which no longer exist

If the testator no longer has such an article as is described in a gift (e.g. my gold watch where the watch has been sold or lost after the making of the will), the gift does not take effect, but if the testator, having had such an article, disposes of it and acquires another fitting the description (i.e. another gold watch), the gift takes effect in respect of the substituted object (the new gold watch). In other words, unless there is evidence that the contrary is intended as regards things given by will, the will takes effect in the circumstances which exist at the moment of death. However, this rule does not apply to the description of persons in whose favour gifts are made by will, e.g. a gift to ‘John’s wife’, the rule being that the bequest is to the person who fulfilled the description at the time that the will was made and only if there is no such person does the person who fulfils the description at the time of death or later inherit.

Gifts of other people’s property

There is a rule in English law known as the doctrine of election to the effect that a person who accepts a benefit conferred by a document must also accept every other provision of that document and give up any other right he possesses which is inconsistent with the document. Thus if a testator who does not own an asset purports to give it away by his will and also gives a gift to the true owner of the asset, the true owner must either refuse his bequest or give up his own property or the value in compensation to the other beneficiary.

Perhaps an example will make the point clearer. If Farmer George dies and leaves ‘my farm Blackacre to my son William and my London flat to my brother Jack’ but in fact he does not own Blackacre which belongs to Jack, Jack must decide whether he will take the flat and give up Blackacre or its value to William or decline the bequest of the flat.

Legacies to creditors

Unless an intention to the contrary is shown, there is a presumption that a legacy to a creditor which is equal to or greater than the debt owed is given in satisfaction and payment of the debt. An intention may be shown to the contrary if, for example, the will directs the executor to pay all the testator’s debts or if the legacy is payable only at a future date or upon the happening of an event in the future.

Substitutional legacies

In the absence of evidence to the contrary, if a will bequeaths the same thing or an identical sum, twice, to the same legatee, the legatee is only entitled to one of the legacies and it is assumed that the second legacy is a repetition of the first. If the two legacies are of unequal amounts or are given in different documents, e.g. one in a will and the other in a codicil to the will, the presumption does not apply and both are payable.

Bequest to a spouse or civil partner followed by the same bequest to issue

If a will or codicil leaves an absolute gift to the testator’s spouse or civil partner but the same document purports to give an interest in the same property to his issue, then, unless the document shows a contrary intention, the spouse or partner will inherit the property absolutely, and the purported gift to the issue will not take effect.

The meaning of certain words.

In construing words used in a will or codicil to decide what they mean the words must be considered in the context in which they are used and the document must be considered as a whole. Therefore the same word may have a different meaning in a different document.

‘Personal estate’, ‘my personal effects’, ‘my goods and chattels’ and ‘my belongings’

These words are usually taken to include all moveable items, but not freehold or leasehold property but ‘my estate’ or ‘my possessions’ is usually construed as meaning all the testator’s assets including non-moveable property.

‘Personal’ estate or ‘Personal’ chattels should not usually be construed to include items used for business purposes. A useful and comprehensive, if somewhat dated, definition of personal chattels can be found in section 55 (1) (x) of the Administration of Estates Act 1925:

‘Personal chattels’ mean carriages, horses, stable furniture and effects (not used for business purposes), motor cars and accessories (not used for business purposes), garden effects, domestic animals, plate, plated articles, linen, china, glass, books, pictures, prints, furniture, jewellery, articles of household or personal use or ornament, musical and scientific instruments and apparatus, wines, liquors and consumable stores, but do not include any chattels used at the death ... for business purposes nor money or securities for money.

‘Survive me’

An interesting example of the rule that the meaning of words in a will must be gleaned from the context in which they are used is to be found in the case of Blech v Blech which showed that a reference to a beneficiary surviving the testatrix did not necessarily imply that the beneficiary must be living at the date of the death of the testatrix. B created a trust for the children of her son R who survived her and attained the age of 21 years and if more than one for them in equal shares. The court decided that, bearing in mind that it would be 17 years before the oldest of those children of R who were living at the date of B’s will reached the age of 21, B must have thought that R might have more children during that period. Consequently it decided that B intended that two children who were born to R after B’s death and reached the stated age must be considered to have ‘survived’ her and should be allowed to share with the qualifying children born before her death.

‘Month’

‘Month’ means calendar month unless lunar month or four weeks is specifically stated.

‘From’

‘From’ a date does not include the date.

‘Children’

The word ‘children’ in a will or codicil means children and does not include grandchildren or stepchildren, unless the will shows a contrary intention or unless the context or circumstances so require, for example if the testator had no children living at the date the will was made.

The law in relation to wills and devolution of estates on intestacy makes no distinction between adopted, legitimate and illegitimate children and a reference to children is taken to include them all, unless there is an indication to the contrary.

‘Issue’ and ‘descendants’

A gift to ‘issue’ or ‘descendants’ means that each of such people who are living at the date of death inherit an equal share unless the gift is stated to be to the issue or to the descendants ‘per stirpes’. If the gift is stated to be given per stirpes only the first generation of descendants inherit unless one of them has died before the testator, in which case his next generation of descendants inherit their deceased parent’s share equally between them.

‘Relations’ or ‘next of kin’

The words ‘relations’ or ‘next of kin’ will usually be taken to mean those who would inherit the estate if the deceased died intestate. (Please refer to the next section of this chapter.)