Gifts to children by will are frequently accommodated using the time-honoured expression “…to such my children as shall survive me and if more than one in equal shares”.
A Supreme Court was recently asked to decide the effect of the phrase in circumstances where one child had died leaving children of their own.
Adelaide couple John and Claire Wedge made what turned out to be their last wills in 1987, with the help of Equity Trustees who were appointed executors.
They were largely on the same terms. Clause 4 of Claire’s will left the residue of her estate to John if he survived Claire, otherwise “….for such of them my said children MICHAEL, PATRICIA and DAVID as shall survive me and if more than one in equal shares absolutely.” It was this clause that was considered.
John predeceased Claire in 1996. Michael died in 2017, survived by his wife Julie and his 2 children. Claire then died in November 2019.
The executor determined – having regards to the SA Wills Act – the estate should be split 3 ways with Michael’s one-third share going to his estate.
Patricia through her solicitors contended though that section 36of the Act did not preserve the deceased beneficiary’s share for his estate – as would normally be the case – because the “such of my children as shall survive me” phrase triggered a carve-out for wills expressing a “contrary intention”.
She maintained the residue should go to herself and David as the only two surviving children.
Re-considering the matter, Equity Trustees decided it wise to seek a ruling from the Supreme Court of South Australia.
Before the court, Patricia argued that the expression “…as shall survive her and if more than one in equal shares” clearly contemplated that one or more of her children might die before Claire and that in such an event, only the surviving children were to receive the benefit.
No other family members made submissions and the executor did not argue either way as to whether the expression carried that interpretation.
Justice Malcolm Blue pondered whether the oft-used expression could be restricted in its application to circumstances where a named beneficiary dies before the testator without children; leaving section 36 to do the work as to what was to occur if the deceased beneficiary were to die – as in this case – with children.
He reviewed the common law position that section 36 had modified, the history of the section in South Australia and of similar sections in other states and how those provisions had been interpreted by the courts.
His Honour observed that a will must be interpreted objectively by considering its terms, context and evident purpose gave the facts proved to have been within the will maker’s knowledge at the time it was made.
In this context, he noted that Claire already had grandchildren when her will was made and would have known she would likely have more before she died. Yet she specified in the will that the residue was only to go to her children that survived her.
“It is very difficult to escape the logic that…the Will explicitly prescribes what is to happen if one of Claire’s children should die before her,” Justice Blue concluded, holding that the will did indeed express a “contrary intention” such that section 36 did not apply.
Thus the court upheld Patricia’s argument and the estate was required to be distributed to her and David only, to the exclusion of Michael’s family.
Note that section 33N of Queensland’s Succession Act contains a provision similar to that which was subject to the dispute in this case. Section 33N (4) specifies though that “a general requirement or condition that issues survive the testator or reach a specified age does not show a contrary intention”.
Thus in Queensland the words “such of my children as shall survive me” cannot create a “contrary intention” but Queensland Courts have decided that the additional words “…if more than one in equal shares” do exactly that.
This decision demonstrates that solicitors should be careful in ensuring that the testamentary provisions are drafted with relevant legislation top of mind so they achieve their intended effect and that such effect is carefully explained to will makers.
That legislation may be subject to change again soon if Justice Blue’s comments regarding the need for legislative reform are given any heed.