Legal Blog

Per Stirpes #2

We previously brought to your attention a major drafting error regarding the use of “per stirpes” (see June 2012 newsletter). The errors keep coming – although this is not a surprise to us because we have repeatedly seen these errors. Lawyers just do not understand that “per stirpes” deals with a distribution down the issue chain. It should not be used when “per capita” is meant and vice versa. The latest case is Dice v. Dice Estate (2012), 111 O.R. (3d) 407 (C.A.).

 Work of Art

 The will gave the wife a life estate and then dealt with the residue as follows:

 Upon the death of my said wife … I direct my said Trustees to … divide the … residue … of my estate, if any, after the death of my said wife … equally, between my son, JD, and my daughter, MD, per stirpes.

      It seems that a lawyer drafted this work of art.

 All would have been well had son outlived his mother. Unfortunately, he predeceased his mother leaving his second wife as sole trustee and beneficiary of his estate and three children, two with his first wife and one with his second. Who gets the remaining 50% share? Sister claimed it; she said that it was really a gift per capita and, since her brother predeceased, she was the only beneficiary left alive. The second wife argued that the gift vested in son as soon as father died. Accordingly, since the gift was son’s, it devolved to her as his beneficiary. Son’s children argued that the phrase really meant, “give the residue to my issue in equal shares per stirpes.”

The Winner Is

 The motions judge decided that the father meant to give son’s share to the grandchildren. The Court of Appeal agreed, but for different reasons. We will not bore you with the reasons because each case is to be decided on its own facts and, had the facts been slightly different, the case could have been decided differently. It was not a simple decision; the reasons were 95 paragraphs in length.

 In keeping with the motto, “never fritter away an estate on the beneficiaries”, the court awarded costs (3 sets of lawyers) out of the estate. There were no good guys and no bad guys in this dispute, just a negligently drafted will.