A class gift in a will is one in which property is given to a group of beneficiaries determined by their relationship to the testator (will maker). The wording used may be to the testator’s siblings, nieces and nephews, sisters or brothers, for example. There is an element of uncertainty present in that at the time the will is executed, it is not known who will be alive when the testator dies to be included in the class and thereby considered to be beneficiaries under the gift.
If all of the individuals the testator had in mind in making the class gift are alive at the time the testator dies, the outcome is the same as if he had specifically named each individual that is to inherit. This is known as a specific gift. However, the difference between a class gift and a specific gift is the outcome that results when one or more of the intended beneficiaries predeceases the testator. When a class gift is made, only the surviving members of the class alive at the testator’s death will inherit. For example, if the testator has seven sisters, three of which die before the testator, only the four sisters alive at the testator’s death will inherit the gift.
When a specific gift is made to someone who predeceases the testator, there is the possibility that statutory provisions will apply such that the person’s spouse or issue (lineal descendants) will receive the gift. In the example above, if the testator specifically named the seven people he intended to inherit, the four sisters alive at his death would inherit with any children of the three deceased sisters.
Another issue of possible concern is that the testator should turn their mind to what point in time membership in the class is to be determined. I recall a matter where a client wanted to make a gift to his nieces and nephews to be used for their postsecondary education. Since he instructed that the share of any niece or nephew that does not attend a post-secondary institution should go to the members of the class that do attend such an institution, I advised that he would have to consider that they are different ages and that each niece’s or nephew’s share of the gift would remain undistributed while waiting to see if they actually attend a postsecondary institution. What would the deadline be, then? Would it be when they attain a certain age? Would it matter what type of institution the niece or nephew attended or where it was located? What if the individual share is more than the cost of the education? A number of other issues arose in this context. If the testator does not clarify at what point in time membership in the class is to be determined, difficulties may arise and one must resort to the rules of construction, which are complex and often difficult to apply.
One should also consider statutory provisions regarding children born outside of marriage. Unless otherwise instructed, they are deemed to be part of the class of people to inherit the gift. There is also the potential of unknown persons not yet alive at the time the will is executed who the testator may wish to benefit under the will. This is one of the reasons class gifts are used. For example, many parents creating wills do not wish to have to go back to a lawyer to have a new will drafted each time they have a child. Thus, their wills are often worded with gifts “to my children”.
Essentially, the testator’s intentions for different scenarios that may arise at the time of his or her death should be thoroughly explored to best determine how the will instructions should be worded.
***
Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters. She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process. This is quite often enlightening for her clients and facilitates individually tailored services. If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.