Interpretation of wills and failure of gifts - Principles of interpreting wills

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Overview

Understanding wills and the failure of gifts are vital parts of estate law, essential for the SQE1 FLK2 exam. This field requires a solid comprehension of legal principles, judicial approaches, and practical applications in estate administration. Appreciating these concepts is key for future solicitors, as they form the groundwork for effective estate planning and dispute resolution. This guide explores will interpretation, examining legal frameworks, potential pitfalls, and strategic considerations that shape this important area of law.

Principles of Interpreting Wills

The Golden Rule of Interpretation

Central to will interpretation is the "Golden Rule," which requires the court to determine the testator's intention as stated in the will. This principle, outlined in Perrin v Morgan [1943] AC 399, emphasizes that the will's words should be given their natural meaning unless this would lead to an illogical result or inconsistency.

Key aspects include:

  1. Literal Interpretation: Focus on the exact words in the will.
  2. Contextual Analysis: Read the will in its entirety to ensure a consistent interpretation.
  3. Avoidance of Absurdity: Reject interpretations that lead to unreasonable outcomes.

The Armchair Principle

The "Armchair Principle," from Allgood v Blake (1873) LR 8 Ex 160, allows the court to consider the testator’s position when the will was made. This approach involves examining:

  • The testator's personal circumstances
  • The nature and extent of their property
  • Their relationships with potential beneficiaries

Admissibility of Extrinsic Evidence

While the focus remains on the will itself, extrinsic evidence may be considered in certain situations:

  1. Patent Ambiguity: Generally, extrinsic evidence isn't allowed if the ambiguity is visible on the face of the will.
  2. Latent Ambiguity: When the ambiguity becomes apparent during the application of the will, extrinsic evidence may resolve the issue.
  3. Equivocation: If a description could apply to multiple persons or things, direct evidence of the testator's intention is admitted (as per Doe d. Hiscocks v Hiscocks (1839) 5 M & W 363).

Failure of Gifts

Recognizing when gifts in a will may fail is key to effective estate planning and administration.

Ademption

Ademption occurs when the specific gift no longer exists at the testator’s death.

Key principles:

  1. Specificity: Applies only to specific gifts, not general legacies.
  2. Timing: The gift must be absent from the estate at death.
  3. Exceptions: Some statutory exceptions exist, such as under the Mental Health Act 1983 for property sold by deputies.

Case Example: Sloan v Sloan [1991] Ch 87

In this case, the Court of Appeal held that when a testator's house was sold, the gift of the original house was adeemed, even when a replacement asset existed.

Lapse

Lapse happens when a beneficiary dies before the testator or is unable to accept the gift.

Key considerations:

  1. Survivorship: Beneficiaries must outlive the testator to inherit.
  2. Statutory Exceptions: Section 33 of the Wills Act 1837 allows gifts to children or issue who predecease the testator but have descendants.
  3. Express Provisions: Wills may include clauses to avoid lapse by naming alternate beneficiaries.

Failure Due to Uncertainty

A gift may fail if its terms are too unclear to fulfill. Uncertainty types include:

  1. Subject Matter: When the gifted property can't be clearly identified.
  2. Objects: When recipients of the gift are unclear.
  3. Conditional Gifts: Conditions that are too vague to enforce.

Drafting Considerations to Prevent Gift Failures

To minimize the risk of gift failures, precise drafting is essential. Consider these strategies:

  1. Clear Language: Use specific terms for gifts and beneficiaries.
  2. Alternative Gifts: Include substitute beneficiaries or gifts to avoid lapse or ademption.
  3. Class Gifts: Use group designations (e.g., "my children") to prevent individual lapses.
  4. Residuary Clauses: Include comprehensive clauses to cover any failed specific gifts.
  5. Regular Reviews: Advise clients to update wills regularly, especially after major life changes.

Practical Application: Drafting to Prevent Ademption

For a client with a valuable art collection, consider this clause:

"I give my painting by Pablo Picasso titled 'The Old Guitarist' to my daughter Jane. If I no longer own this painting at my death, I give Jane £500,000 instead."

This provides an alternative gift if the painting is gone, preventing ademption.

The Role of Rectification and Construction

When interpretation is challenging, courts might use rectification or construction to carry out the testator’s intentions.

Rectification

Under Section 20 of the Administration of Justice Act 1982, the court can rectify a will if it fails due to:

  • A clerical error
  • A misunderstanding of the testator's instructions

Rectification requires clear evidence of the testator’s true intentions.

Construction

Construction involves interpreting the will to fulfill the testator’s presumed intention. This may involve:

  • Adding implied words
  • Correcting obvious errors
  • Using the 'armchair principle' for context

Case Study: Marley v Rawlings [2014] UKSC 2

In this case, the Supreme Court applied the principle of construction to wills similarly to commercial contracts, allowing more flexible interpretation to focus on the testator's intentions.

Conclusion

Understanding the principles of will interpretation and recognizing the causes of gift failures are essential for success in the SQE1 FLK2 exam and future legal practice. Key points include:

  1. The Golden Rule focuses on the testator's intention in the will.
  2. The Armchair Principle allows courts to consider the testator's circumstances.
  3. Extrinsic evidence can be used for latent ambiguity or equivocation.
  4. Gifts fail due to ademption, lapse, or uncertainty.
  5. Careful drafting, using clear language and alternative provisions, prevents gift failures.
  6. Courts may use rectification or construction in difficult cases.

By understanding these principles and their practical applications, aspiring solicitors will be well-equipped to handle complex estate planning, draft effective wills, and resolve estate disputes.