Courts have guidelines for interpreting ambiguous provisions in
contracts, Wills, and other documents. With respect to Wills, where
the will-maker's Will contains clauses that can either be
giving an interest that is vested (owned by the beneficiary at
the will-maker's death); or
giving an interest that is contingent (ownership is conditional
on another event after the will-maker's death),
the Court prefers to find a vested interest, which in some
circumstances avoids an intestacy. However, the Court's
preference is subordinate to the will-maker's intentions. The
will-maker's freedom to distribute his/her estate according to
his/her wishes is paramount.
In Fargey v. Fargey, 2015 BCSC 721
["Fargey"], the Court considered this issue. The
Will provided that, in the event that Bruce Fargey (Matthew and
Joseph Fargey's father) predeceased the will-maker (which he
did), his share would be divided among his children. The
will-maker's grandsons, Matthew and Joseph, sought orders
terminating a trust and encroaching on a trust, respectively.
Matthew, relying on the rule in Saunders v. Vautier (1841)
41 ER 482 ["Saunders"], argued that because he
was an adult of sound mind and entitled to the beneficial interest
of the trust, the trust ought to be terminated. Joseph's
litigation guardian petitioned for permission to encroach on
Joseph's interest, arguing that it was in his best interests.
For either petition to be successful, the grandson's beneficial
interests had to be categorized as vested rather than contingent.
Therefore, the issue for the Court was whether the interests
conferred to the grandson's had vested upon the
will-maker's death or whether the interests remained contingent
on the grandson's attaining the age of twenty-five.
According to the terms of the trust, the trustees were not to
distribute the capital until the grandsons reached the age of
twenty-five. The relevant clause of the Will read that the trustee
invest and keep invested each
such sub-share and to pay the income therefrom or so much thereof
as may be necessary or advisable in my Trustee's discretion for
the grandchild's maintenance, education or benefit during his
or her minority, (any income not so paid in any year to be added to
the capital of the share) and upon my grandchild attaining the age
of twenty-five (25) years to distribute the capital of the
sub-share to him or her
Based on the language of the clause, the Court held that the
will-maker intended that the grandsons' interests would vest at
the time of the will-maker's death, but that the
distribution would be postponed until they reached
the age of twenty-five. The use of the word
"distribution" implies that the interest vested, but
would be distributed at the later date. Accordingly, the
grandsons' interests were vested interests rather than
The Court then considered the specific petitions of each
grandson. Matthew's request for early termination of the trust
was successful under the rule in Saunders as he is an
adult and of sound mind, and there was no opposition from those in
charge of Joseph's affairs.
Joseph's petition was also successful. The Court held there
was no controversy as to whether an encroachment was in his best
interests, focusing on educational purposes, which were expressly
considered in the Will. Further, the Court held that encroachment
was permitted under the Trust and Settlement Variation
Ultimately, the Court endorsed the longstanding preference of
holding that an interest has vested, if the language of the Will
can support such an interpretation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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