Will Interpretation: Charitable Causes vs. Worthy Causes -

Will Interpretation: Charitable Causes vs. Worthy Causes

A recent case from Ontario’s Superior Court of Justice took a careful look at how a Will can survive even if a part of it has been found invalid.

In Stoor v. Stoor Estate, 2014 ONSC 5684, the deceased, Lillie Stoor, divided her estate into two parts.  One part was her investment portfolio, which she bequeathed to her only son, her nephews and her nieces equally for their immediate enjoyment.  The second was a life Trust for her son made up of the remainder of her estate: other investment and savings accounts, a house and the residue of her estate. Her estate trustees were to invest the assets, and distribute the income and capital to her son at their complete discretion. She also outlined that upon her son’s death, the residue of the Trust was to be distributed to “any and all worthy individuals and or causes who shall be alive or in existence at that time, as my Trustees may, from time to time, in their absolute and unfettered discretion consider advisable”.

Lillie also included a clause explaining exactly why she left her estate to her son by way of Trust instead of giving him the assets outright:“[w]e are all well aware of the mental and physical challenges which my only child and son…has had to live with all through his life.” It was clear that Lillie had concerns about her son’s ability to manage his financial affairs, and a Trust was her well-researched choice to deal with these concerns.

A Trust is created when a person (settlor) transfers property to someone else (trustee) with instructions that the property is to be used specifically for the benefit of a third party (beneficiary). In creating a trust, three criteria must be met, also known as the “three certainties”: 1) certainty of intention – it is clear that the settlor wants to transfer the property and create the trust); 2) certainty of subject matter – it is clear what property is to be transferred and how much is to be given to each beneficiary; and 3) certainty of objects – the beneficiaries are easily ascertainable and identifiable. If a trust does not have all three of these “certainties”, it will fail.

Lillie’s son brought an Application asking the Court to find that the gift to “any and all worthy individuals or causes” of the Trust was void for uncertainty of objects, and that because it was void, the Trust should fail. If it failed, he would get the entire capital and interest of the Trust immediately.

Justice Himel stated that trusts for ‘worthy causes’ or ‘worthy objects’ are not trusts for charitable purposes, and are therefore void for uncertainty. Had the term “charitable purposes” been used, the clause would likely have succeeded. However other terms like “worthy”, “public” or “benevolent” do not necessarily mean the same thing as “charitable”, and therefore cannot be considered the same thing. As a result, this clause was found to be void for uncertainty of objects.

As a result of this clause being found void, the next question was whether this meant that the Trust was not created and Lillie’s son could take his inheritance directly and immediately, or whether the Trust would continue for the son’s lifetime and would pass under the intestacy rules (i.e. the rules of distribution that apply where there is no Will) once he dies.

Justice Himel conducted a careful investigation of Lillie’s intentions. After reviewing the Will, Lillie’s lawyer’s notes from their Will preparation meetings, as well as Affidavit evidence provided by the Estate Trustee, Justice Himel found that Lillie was very clear in her intention for creating the Trust; namely that her son was not to have direct access to it, nor was he to have any interest except for what the Trustees give him in their absolute discretion. It was also clear that the uncertainty only involved what happens after the son dies. As a result of this interpretation of the Will, coupled with Lillie’s clear intentions, the Trust survived and the residue will be distributed according to the intestacy rules when Lillie’s son dies.

It is important to note that even though part of a Will may be found void for uncertainty or ambiguity, the Courts may still give effect to a testator’s intentions as long as they are clear and precise.

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Article written by
Elikem Deley. Elikem is a member of the estates group and practises in the areas of wills, powers of attorney, estate administration and estate litigation.

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