In estate law, there are two types of estate distribution: per stirpes and per capita distribution. Per stirpes means the estate will be passed on to the deceased’s next-in-line heirs, whereas per capita means the estate will be divided evenly amongst any surviving beneficiaries.

In a recent Ontario case, the court considered the difference between per stirpes and per capita while considering the proper interpretation of a testator’s will and the distribution of his estate.

Testator was survived by four siblings and 34 nieces and nephews

The testator died in 2013 at the age of 76. He had never married and had no children. His parents predeceased him. At the time of the hearing, the testator had four surviving siblings and 34 surviving nieces and nephews. He also had four siblings who had predeceased him, one sibling who passed away following his death, and two nieces and nephews who had passed away since his death.

The testator had created a will in 2004, a handwritten provision of which stated he was bequeathing all of his real and personal estate to:

“TO MY BROTHERS[‘] [&] SISTER[‘]S LATE BROTHERS [&] SISTERS NEPHEWS [&] NIECES”

Estate trustee sought court’s direction on interpretation of will

The estate trustee brought a motion for directions to the court as to the interpretation of the testator’s will. The problem faced by the trustee, specifically, was what the testator meant in the above paragraph giving the residue of his estate to his “my brothers sisters late brothers sisters nephews and nieces”.

The trustee submitted that the provision could be interpreted in several different ways, given the lack of punctuation and the other ambiguities of the language in the will provision.

For instance, the trustee stated that it could mean that the estate should be distributed into nine equal parts, to be distributed in five shares to the surviving siblings and the estate of the since-deceased sibling, and four shares to be divided amongst his nephews and nieces according to their surviving parentage.

However, the trustee stated that if the above interpretation was incorrect, the will could also be interpreted as dividing the estate in equal shares per capita into 45 equal parts among the testator’s surviving siblings, the estates of his siblings who predeceased him, and all the 36 nieces and nephews, including the two who were now deceased.

Alternatively, the trustee submitted that, if the two above scenarios were incorrect, the estate could be divided in equal shares per capita into 41 equal parts among his five surviving siblings at the time of his death and the 36 nephews and nieces at the time of his death.

Court required to determine testator’s intention based on words used in will

The court noted the paramount consideration is the intention of the testator. When the testator’s intention cannot be determined “with reasonable certainty by giving the natural and ordinary meaning” to the words used in the will, only then will the court use common law rules of construction to interpret the will. The court explained it is preferable to determine the testator’s actual intent instead of an objective intent presumed by law. This requires the court to determine the meaning of the actual words used by the testator, if possible.

To determine the testator’s intention, the court explained it must use the “armchair rule”. This is when the court puts itself in the position of the testator, considering all of the facts and circumstances at the time the will was made.

Court clarified per stirpes vs. per capita estate distribution

In reviewing the present case, the court observed that what was really being asked was whether the testator intended the distribution of his estate to be per stirpes or per capita. The court then explained the preference to be given as between the two concepts by stating:

“While there is a general rule of interpretation that a testator intends equality of distribution such that the distribution will be made per capita rather than per stirpes, the general rule must yield depending on the circumstances. This is particularly so in circumstances involving families.”

As such, the court held that while there is a presumption of per capita interpretation, a per stirpes interpretation should be favoured in cases of family distribution.

Court ruled estate to be distributed per stirpes in nine equal shares

The court determined that the estate should be distributed per stirpes based on the words used by the testator, the circumstances surrounding the will, and the governing principles of interpretation.

The court reasoned that, on its face, the focus of the chosen words of the relevant paragraph of the will was on family: brothers, sisters, nephews and nieces. The court noted the testator was devoted to his brothers and sisters and their families.

Thus, the court held that the first interpretation submitted by the trustee would result in each sibling, or if deceased, their children, receiving a proportionate share of the residue of the testator’s estate. The court was satisfied that, in the circumstances, this was the intended result of the testamentary disposition the testator made in 2004.

The court noted that other possible interpretations led to unreasonably “peculiar” results and acknowledged the lack of punctuation in the will was the source of the problem. With certain punctuation inferred, it may be argued the testator intended to leave a portion of his estate to his late brothers’ and sisters’ nieces and nephews, which did not make sense in the context of the will. The court held that a more reasonable interpretation was that the testator was speaking of his own nieces and nephews – not his siblings’ nieces and nephews.

Finally, the court stated that under the second and third interpretations submitted by the trustee, the family of his surviving siblings would receive a disproportionate share of the residue of the estate. The court concluded that nothing in the surrounding circumstances suggested the testator would have intended to bring about that result.

As a result, the court ordered that the trustee’s first proposed interpretation be followed whereby the testator’s estate be divided into nine equal parts.

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