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Monday, December 12, 2011

How will we know who you're talking about?

In my job, I spend quite a bit of time talking to people about who should inherit their estates once they've passed away. I urge people to be as clear as possible, and remind my clients that their meaning has to be expressed in writing in a way that needs no explanation or clarification from outside sources.

The need for greater clarity often arises when a testator (person whose will it is) leaves an inheritance to a group of people. For example, many readers will acknowledge that their own wills leave an inheritance to the group of people known as "my children". Hopefully the will is crystal clear on whether "my children" includes biological, adopted, step-children and children born of previous relationships.

A case from BC (Estate of Cecil Charles Herbert Holmes, 2007 BCSC 51) looked at a will in which a man left a gift of money to "my nieces and nephews". The question was whether that group of people included only the 11 children of his siblings, or whether it also included the 18 children of his wife's siblings. The executor needed clarification, as no matter what he did plenty of people were going to be unhappy with him, and the only place to get clarification  is from the court.

In this case, the phrase "my nieces and nephews" was determined to include the wife's nieces and nephews as well, but it might be decided differently in another case.

The lesson to be learned here is that if you're not clear who you're talking about in your will, your executor might end up taking your will to court for help figuring out your instruction. This costs money, which comes out of your estate, and holds everything up while your executor waits for the court date to roll around. And if the executor does the wrong thing and doesn't take it to court, your money could end up being paid to people who are not the ones you intended to beneft.

To read more commentary about this case from http://www.disinherited.com/, click here.
To read the entire case (as I'm sure you all will), click here.

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