A Classic Case of Whogotit

Storebought Wills prepared and signed by persons without legal advice have been the subject of much litigation in B.C. over the years. Many of the cases have been about the interpretation of the Wills.

Last week, reasons for judgment were released in an important case in which the Power of Appointment was the main legal issue. The case, called Tassone, Executrix of the Will of Pearson v. Pearson, Kennedy and others, is a case among cousins, and is based on a tragic set of facts.

The case is important not only because of the Court’s discussion of the power of appointment, but also because it illustrates the risk involved and potential cost of making a Will without any advice: it’s a sort of “pay me now or pay me later” kind of situation.

The Facts
The deceased had three sons. She survived all of them. When she died in September, 2010 she was survived by six grandchildren. The last of her children to predecease her (in 2007) was a son, Ronald. The Will of the deceased appointed the Petitioner, a granddaughter (Ronald’s niece), as Executrix. She launched this action to have the Will interpreted. The other parties in the case (Respondents) were Ronald’s two children.

The Petitioner’s position was that, because the power of appointment in the Will gave her full discretion to distribute the Estate assets as she wished, she could take the assets for herself. The Respondents’ position was that the Will’s final clause really bequeathed the Estate to Ronald and so, as his children, they should get the Estate.

The Will, done in 2003, in part said: “I Devise my estate as follows: and bequeath the real and personal estate, of which I may die possessed to be distributed as seen appropriate by my executor.”

Then, the deceased’s son Ronald was appointed Executor, and as a backup, the Petitioner was appointed Executrix. Because Ronald died before his mother, in fact the Petitioner became Executrix. The final clause of the Will said: “Beneficiary of this my Will is my son Ronald…”

The Power of Appointment
The Court defined “Power of Appointment”. Using the definition in the famous Black’s Law Dictionary, the Court essentially defined the term as a power that is conferred on a person (a donee) by Will, to select and nominate one or more recipients of the Testator’s (the donor) estate or income.

So the power of appointment is the ability somebody receives through a Will to essentially select who gets the Estate of the deceased. It’s as if the deceased doesn’t know to whom he or she ought to give their Estate, so they let the appointed person do the selecting for them.

Court’s analysis
The Court did an excellent, thorough and detailed analysis of the law in this case. In its analysis of the power of appointment, the Court not surprisingly held that the power was based in law, and was valid in this case. It was a “general” power of appointment, such that the Executrix had full discretion to distribute the assets of the Estate as she saw fit.

The Respondents argued that an old rule, called the “anti-delegation” rule, applied in this case and invalidated the general power of appointment. The Court carefully considered that argument, citing and analyzing centuries-old law which allows powers of appointment. Some of the cases cited which considered the anti-delegation rule actually seemed to involve Will clauses which were vaguely drafted and so were held to be void because of uncertainty.

Ultimately, the Court held that the power of appointment was valid under Canadian law and so it applied to this particular Will. The Court then turned to the construction and interpretation of this unusual Will.

The first requirement of the Court in such a case is to ascertain what the deceased intended in her Will. The language in the Will had to be considered first. But because of its vagueness, the Court was permitted in law to utilize external evidence (the “armchair rule”) to get at what the intention really was. The Court examined the affidavits filed by the parties. Evidence contained about the relationships the deceased had with the parties was helpful to the Court, particularly that the Executrix had a close relationship with her grandmother (the deceased).

The Court then attempted to reconcile the conflicting parts of the Will (mentioned above). The Court held that the most sensible interpretation of the Will was to give the Executrix, via the power of appointment, the discretion to distribute the assets as she saw fit. Thus, the Executrix received the Estate.

The deceased, in her Will, gave her son Ronald the power of appointment but if he predeceased (which he did), that power went to the alternate Executrix (the Petitioner in this case). That stood as the most sensible interpretation of the Will.

Conclusions
As mentioned, this case was very well analyzed by the Court. It is too early to determine whether the decision will be appealed. But it is an example of what can happen where a Will is made without advice. Litigation sometimes ensues, and an entire Estate went to a person who was one of six grandchildren of the deceased.

As well as this case was analyzed, I was still left wondering whether the deceased might have really wanted her Estate to go to more than one grandchild (for example, the two Respondents in this case). Though I think the result in the case makes legal sense, we don’t really have a clear expression anywhere of what distribution of her Estate the deceased may have wanted.

Given the typical cost of making a Will — which is generally not very expensive most of the time — in my view it would have helped had the deceased sought out some advice.

This ad appeared in the Richmond News on August 31, 2012.