Careful Crafting of the Words Helps Achieve Intended Outcome

Wills are the documents used to capture testators’ last wishes for the disposition of their estates. When the words in a will create ambiguity, it can disrupt the testator’s intentions and create angst amongst those involved with the estate, particularly the executors, trustees and beneficiaries. Ultimately, the intervention of the courts may be required. Great care is needed to ensure as much clarity as reasonably possible is reflected in a will. In addition to the choice of words, it is also important to use the correct context.

The following common legal terminology is often found in wills, and can add clarity or ambiguity, depending on the usage.

Issue – The term “issue” refers to the testator’s children, grandchildren, great-grandchildren and so forth. If a testator’s intention is for the distribution to occur only to the immediately succeeding generation (i.e., the testator’s children), the use of the term “issue” can be problematic and may result in the court’s intervention. As such, using the term “issue” in the correct context can minimize the need for judicial interpretation.

Per Stirpes – The term “per stirpes” means by roots or by representation, and defines the distribution of an estate whereby a beneficiary receives his or her share as a member of a group rather than as an individual; the group shares in the proportional amount of the deceased ancestor’s share of an estate which the ancestor would have received directly if he or she were still living.

The term “per stirpes” should only be used in conjunction with the word “issue” such as, “among my issue in equal shares per stirpes.” In simple terms, the intention of using “per stirpes” is to ensure a beneficiary’s share of the estate is distributed to that beneficiary’s children if that beneficiary predeceases the testator.

Use of the term “per stirpes” in any other context is likely to leave the executor in a quandary that could necessitate judicial involvement to settle the interpretation.

Per Capita – A distribution “per capita” means that all beneficiaries of the described class would inherit an equal share. Using the term “per capita” means that any beneficiaries that pre-decease the testator would not be allocated a share.

Examples of the use of “per capita” include the phrases “equally to my issue per capita” or “equally to my children per capita.” In the first example, the testator’s estate would be divided equally amongst all of the issue of the testator who are alive at the time of his or her death (children, grandchildren, great-grandchildren, and so forth). In the second example, the testator’s estate would be divided equally among the testator’s children who are alive at the time of the testator’s death.

It is important to recognize that the use of the term “per capita” means that if a beneficiary predeceases the testator, the deceased beneficiary’s share is not re-directed onto his or her children or other issue. Instead, the deceased beneficiary is removed from the class and the testator’s estate is divided amongst the remaining living members of the class of beneficiaries.

In addition, a “per capita” distribution to a named class could become very broad. For example, the term “per capita to my issue” would include all down-stream issue, which has the potential to be a very large group.

Family Groups – Words describing a family group or relationship can also be problematic particularly in today’s era of modern families with a wide variety of blended relationships. The term “children” typically does not include stepchildren or a minor child of whom the testator may have legal custody in a parenting role. However, the term “children” can be more clearly defined in the will to include either of these two groups or to more clearly state that these groups are excluded.

Another example is the word “spouse.” Today, the term “spouse” is interchangeable when referring to a married spouse or a common-law partner. Yet, use of the term “spouse” can become problematic in a will because it is not uncommon for an individual to be separated from a spouse and to be in a common-law relationship with another individual — so effectively, the individual could have two spouses. Adding clarity, perhaps through the use specific names, can eliminate potential conflicts.

Careful drafting and a thorough review of terminology will help minimize potential ambiguities and the need for judicial intervention.

E.O. & E.

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Contributors to this edition:

James W. Kraft, cpa, ca, mtax, tep, cfp, clu, ch.f.c.
Deborah Kraft, mtax, tep, cfp, clu, ch.f.c.