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Who are Your “Friends”? Certainty in Estate Planning

Who are Your “Friends”? Certainty in Estate Planning

September 27, 2021

By Brian Babcock

A valid trust requires what are called the “three certainties” – certainty of intention to create a trust, certainty of subject matter (what property is in the trust?), and certainty of objects (who are the beneficiaries?).

This applies to most gifts in wills, where the property is usually transferred to the estate trustee to be administered and distributed to the beneficiaries in accordance with the intention of the deceased person.

However, if there is uncertainty about to whom the gift is made, your intent may be defeated.

If your will makes the gifts to named persons or charities, this is not usually a problem, though getting the names right helps. Because judges will lean in favour of finding valid gifts, misnomers may be corrected, but that gets messy, costly, and unpredictable.

The more startling result occurs where the court finds that a gift to a category of people is invalid because the description is simply too vague. This results in a failure of the trust, and the property passes to the deceased’s “heirs at law”, just as if there was no will. The result is that your intentions are clearly ignored in favour of the result that you clearly did not intend.

The court will not rewrite your will to create a valid category description by guessing at your intention.

For example, in Re Connor, the will stated “I direct that the residue be divided among my close friends in such a way and at such time as my trustee in her discretion should determine.”

Because it was impossible to make a complete list of who fits within the term “close friends”, the gift was invalid. The residue of the estate went to Ms. Connor’s cousin, a virtual stranger to her.  We might not know who she intended to include in “close friends”, but we are pretty sure the cousin was not among them.

If you do not want to accidentally create a windfall for someone you do not intend to benefit, you need to take care in describing your beneficiaries. This is yet another reason why “do it yourself” is a risky way to write a will. The modest cost of having a will prepared by a lawyer is much more likely to result in your intentions being carried out.