Last week I wrote about a recent case involving the interpretation of a Will, only to have reasons be released in another case involving Will interpretation. It does seem to indicate that this is a litigious area of the law, such that it’s useful to be clear and careful in drafting a Will (though the work doesn’t end there).
In this recent case, Re Ali Estate, the deceased died in 2008 with a fairly large Estate, consisting mainly of shares in a private company. The deceased’s brother and a daughter, named Co-Executors in the Will, contested the interpretation of the Will.
The issue for the Court was how to interpret the words “my interest in the company.”
Among the company’s assets were two shareholders’ loans, owing to the deceased when he died. The two loans are assets (receivables) to the Estate, and the interpretation would decide who was entitled to those assets.
The Court referred to the rules governing Will interpretation, which can be summarized as being the “Armchair Rule”: the Court puts itself in the position of the Will maker when he or she made their Will, and then construes the Will’s language, taking into account the surrounding facts and the circumstances that the Will maker knew.
The Court found the dictionary meaning of the word “interest,” and held that an “interest” in a company was more than just the ownership of shares in the company.
Therefore, Mr. Ali, in the bequest to him of 70% of the deceased’s “interest” in the company, received not only 70% of the shares but also 70% of the two loans due to the Estate.
Beyond the simple need to be careful in drafting a Will, then, it’s useful to add detail when describing a gift in a Will, to define exactly what it encompasses.
This ad ran in the Richmond Review on March 14, 2014.