Interpretation of Wills

Apply at Death

There are well-established principles of interpretation of wills.  It takes effect at the date of death and applies to the assets and liabilities of the deceased at the date of his death.

A will is interpreted in light of the circumstances which prevail at the date of death.  It does not matter that the will was made many years before.  Certain principles apply

• if the person who has benefited under the will is no longer alive (laps) or
• if specific assets are mentioned in the will, which are no longer owned by the deceased at the date of death (ademption).

Primacy of Intention

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.  Therefore, 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 them.  The Courts will not rewrite a will that they infer that a testator wanted to make.

Principles of Interpretation

The general principle is that the 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.

Where a 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. An intended bequest or gift should not fail.

Words will be interpreted in their 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.

Surrounding Circumstances

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 may look at extraneous evidence of the circumstances in order to ascertain what the intention of the maker was.  In this case, the evidence of the solicitor drafting 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.  The courts have decided that this did not change the earlier 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 may refer to the circumstances at the time the will was made.

Will Benefits

A devise (noun) or the verb “devise” used in a will is an old-fashioned word referring to a gift of land or buildings.  The word legacy or bequest refers to other classes of assets.

A specific legacy usually refers to a particular asset.  If a specific asset is left and is no longer held at the date of death, the gift is ineffective.

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 reduce the residue accordingly.

If there is no money to pay all the general legacies, they will reduce proportionately. A specific legacy of an item will not reduce proportionately until all other assets have been reduced, e.g. where necessary to pay debts.

There is a presumption that interest is paid on a general legacy from one year after death.  Interest does not arise on other legacies. 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 charged on benefits.  Where a property is left subject to a mortgage or charge, the mortgage or charge is presumed to be primarily paid out that asset unless the deceased otherwise directs.  This principle applies to mortgages, charges and taxes on the benefit.

Trusts and Conditional Benefits

Wills can be combined with trusts to provide a so-called will/trust.  In this case, the will leaves assets to trustees to be held under the terms of the trust, generally for the benefit of certain persons over time.  See our separate chapters on trusts.

Apart from trusts, it is possible to have conditional or contingent gifts.    A contingent gift is one that is dependent upon a condition.  Commonly contingent gifts are made in favour of children, subject to reaching a certain age (e.g. 21 years).

In this case, if the beneficiary dies 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 the beneficiary dies before the relevant age, the benefit of the asset concerned would pass to their beneficiaries.

Gifts are commonly given to minors subject to attaining the age of, say, 21 or 25 years.  The Courts favour an interpretation which gives effect to immediate vesting. If the actual entitlement does not arise until 21 years, the languages will need to state this clearly.

The wording of gifts can be very important in the context of inheritance tax because it taxes assets at the moment the ownership vests in the beneficiaries.

Benefits to Minors

When 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 a 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 the person who becomes entitled to them upon reaching a certain age.

The trustees may retain the assets in their state 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.

Ademption

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 substituted with another, the will may be interpreted in some cases so as to take effect in relation to the other.

Lapse

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”.   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 purpose.  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) when that beneficiary dies themselves leaving children.  The Succession Act provides 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.

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,it will not generally lapse.

Simultaneous Deaths

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.  In order to benefit under this clause, one spouse must survive the other for a period commonly chosen as 30 days.

The legislation deals 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.  In this case, 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.