The complexity of interpreting Wills and the case of the unborn nephew

There is a concept called "testamentary freedom" -  a will-maker has the freedom to draft a document leaving their estate to whomever they wish. However, the document needs to be drafted so that it correctly reflects the will-maker's wishes, and when terms such as "survives me" and "it is my wish" are used, the interpretations may be different.

Whimp v Scaglia [2024] NSWCS 432 (23 April 2024)

The Deceased, Katrina Gaye Roberts, tragically died in a car accident at the age of 48.  Her estate was valued at just under $1.5 million.  In addition to a charitable gift to the Garvan Institute, the deceased divided the balance of her estate:

• 25% to her brother Drew, but if he "has children", then the gift is to be shared between "those of his children who survive me and reach 25 years of age".
• 75% to be divided evenly between the children of her other 3 siblings (that is her nieces and nephews) "if they survive me and reach 25 years of age."

She then specified a wish that the funds are to be used "to assist in purchasing a property and assist in their education but does not include any HECS or equivalent educational debt."

In approaching its interpretation of the Will, the Court revisited some core principles in the rule of construction:

• The fundamental rule in construing the language of a will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended.
• A will should be so construed as to give effect to the intention of the testator, such intention being gathered from the language of the will read in the light of the circumstances in which the will was made.
• The object of construction of a will is to give effect to what can be ascertained, having regard to admissible extrinsic evidence, the testatrix intended by the words she used.
• It is necessary to consider the terms of the will as a whole and seek to ascertain the basic scheme which the deceased had conceived for dealing with his or her estate and then to construe the will, if possible, to give effect to that scheme.

Reference was made to section 32 of the Succession Act 2006 (NSW) which permits the admission of "extrinsic evidence" to assist in the construction of a will if the language makes the will, or any part of the will:

• meaningless; or
• ambiguous on the face of the will; or
• ambiguous in the light of the surrounding circumstances.

The Court noted that the issues to be considered were:

• who are the beneficiaries - which turns on the meaning of the expression "survive me";
• whether there was 1 trust of 3 sub-parts, or 3 separate trusts, for the gifts to her nieces and nephews; and
• whether the clause regarding the use of the funds was a mere wish.

1. The meaning of "survive me"

At the time of making her Will, each of the deceased's siblings, except her brother Drew, had children.  Drew had 1 child after the Will was made, and another child after the deceased's death.  The Court referred to the authority of past Court decisions and noted that "survive me" means "outlive" (as the "natural and primary meaning) - which requires the person to be alive both before and after the death of the testator.  If a beneficiary wishes to argue that it has a broader meaning such as "live after me", then it is for the beneficiary to prove that was the testator's intention. Noting the deceased's young age at the time she made her Will, it is likely that she expected to live much longer, by which time her class of nieces and nephews would be ascertained. Also, the fact that each of the beneficiaries would be immediately entitled to a gift of the income of the trust estate suggests that they were immediately "vested in interest" but "vesting in possession is deferred" until they reach the age of 25 years.  The Court therefore concluded that the nephew born after his aunt's death was not to be included in the class of beneficiaries.

2. The division between the trusts

The executor believed that the gift was to be split into 3 equal parts (per sibling), and the children of each sibling would then share in that part.  The siblings argued that the gift was to be shared evenly between all of the beneficiaries equally.  The Court concluded that it was to be divided evenly between the nieces and nephews of those siblings, and that brother Drew's share was to go wholly to his one child who survived the deceased.

3. The effect of the "wish"

The Court noted that nothing within the wording of the relevant clause suggested that this was a direction, requirement or something imperative which would require that something be done.

The reason that this case came before the Courts was that all of the parties (being the executor and the beneficiaries) realised that the Will was open to interpretation, so, by agreement, they referred the issues to the Court for its consideration and determination.  Accordingly, each parties' costs were paid by the Estate.