In this case, the Court was asked to decide what should happen to the estates of the testators, who were murdered by their primary beneficiary.
The Estate Trustee, Bank of Nova Scotia, brought an application for directions as to the proper interpretation of the wills of Merrill and David Rogers, who were murdered by their son Cameron. Each of the wills provided that (if they were both deceased) the assets of the estate were to go first to Cameron and, if he predeceased them, to his “issue then living”, and then to alternative beneficiaries, Merrill’s elderly brothers, failing which the estate assets were to go to charity.
The Court considered firstly whether the estates could pass to Cameron and, if not, whether the estate assets should remain invested until Cameron’s death in order to determine whether he has any children before distributing the estate to the alternative beneficiaries.
The “slayer rule”
What is the “slayer rule”? Simply put, the rule states that for public policy reasons, a criminal should not be permitted to profit from crime. In this case, it prohibits inheritance by a person who murders someone from whom he or she stands to inherit. Therefore, the estates could not pass to Cameron. The court then had to decide who would take next.
There are three different approaches that have been used to deal with such situations:
(1) the “deemed death of the murderer” approach;
(2) the “literal reading of the will” approach; and
(3) the “implied intention of the testator” approach.
The ultimate objective of each approach is to see that the wishes of the testator, as expressed in the will, are carried out and avoid an intestacy (distribution of estate assets according to law as if there were no valid wills) unless that was intended.
The Court rejected the “deemed death of the murderer” approach, wherein a beneficiary who is found to have caused the unlawful death of a testator will be deemed at common law to have predeceased the testator. The Court’s basis for rejecting this approach is that it creates a “legal fiction” (pretending that the primary beneficiary is deceased) before the contingent beneficiaries take under the will, although it does avoid an intestacy.
The Court also rejected the “literal reading of the will” approach, which provided in this case only for a gift over to the contingent beneficiaries if the primary beneficiary actually predeceases the testator. The result is an intestacy, which would ignore an important element of the testators’ intentions to benefit the alternative beneficiaries.
The Court preferred the “implied intention of the testator” approach, which provides for an implied term in the will that the primary beneficiary must be a legal beneficiary, failing which the testator intended that the estate should go to the alternative beneficiaries.
- “keep[s] the analysis within the confines of the will and allow[s] the contingencies contained therein to play out”;
- avoids an intestacy as a matter of policy which would ignore the true intentions of the testators, who created “levels” of contingent beneficiaries to avoid this result; and
- is the least intrusive in that it focusses on the intentions of the testators by allowing alternative bequests to be followed if the primary beneficiary cannot take under the wills.
Having determined that the implied intention approach best reflected the actual, subjective intentions of the testators to provide for the brothers to have a contingent interest in the estates, the question was whether the estate assets were to be kept and managed for the benefit of Cameron’s potential unborn children.
The “armchair rule”
What is the “armchair rule”? In interpreting the will, the court tries to put itself in the “armchair” of the testator at the time the will was made with a view to determining the testator’s actual or subjective intentions, based upon the language of the will read in light of all the surrounding circumstances.
Here, the Court found that the subjective intentions of Merrill and David were clear:
- The wills provided that they would leave everything to each other, failing which their estates would pass in the form of a life interest to Cameron.
- If he should be unable to receive the life interest because he should pre-decease them, their estates would pass to Cameron’s then-living children.
- If Cameron pre-deceased them and left no then-living issue, their estates would pass to Merrill’s brothers.
The next question was whether the estate assets were to be kept and managed for Cameron’s unborn children or the Court could “accelerate” the next level beneficiaries, the brothers. The principle of acceleration allows a subsequent interest to “accelerate” if a prior interest is disclaimed, surrendered, or otherwise terminated. The facts of this case met that criterion.
The Court posed the question: “if David and Merrill could have been aware of Cameron’s disentitlement (and the exact basis for it), would they have wanted for their estates to wait for Cameron’s release from prison and possibly fuel a decision to have children”? The Court found that this outcome would be inconsistent with public policy and the intentions of David and Merrill. Also, Merrill’s brothers were elderly and if the estates’ assets were invested pending a determination of whether Cameron had children, the brothers might be dead. The Court found that this outcome would defeat the testators’ clear intentions to keep their assets in the family, before they went to charity. Further, at the time that Cameron was disentitled under the will, he had no children and the will required that any children be “then living”. Therefore, even though the language in the wills did not neatly fit, the estate assets should pass to the next beneficiaries in line, who were the brothers.