Lapse

Question 1

What does lapse refer to at common law?

Answer 1

Specific event of predeceasing the testator

Question 2

Every province has lapse provisions now

Answer 2

Expands doctrine of lapse

Question 3

S.22 NB Wills Act

Answer 3

Expands doctrine of lapse- makes applicable to real and personal property and provides that any gift that fails for any reason (not just pre-decease). If fails it falls into residue.

Question 4

Scenarios that are exceptions and makes it go to intestacy and not residue- doctrine of lapse can’t save these gifts

Answer 4

(1) If there is no residual clause

(2) If the gift that fails is residue

Question 5

Re Stuart

Answer 5

Facts: testator made a bunch of specific gifts of money, niece pre-deceased. She was one of the residual legatees too.

Ratio: Absent contrary intention lapse legislation cannot save lapsed residue, goes to intestacy

Question 6

Contrary intention

Answer 6

• Can save gifts in residue and prevent failed gifts from going in residue
• Must be on the face of the will

Question 7

Maldin Estate v McGuire

Answer 7

Bad law, looked at surrounding circumstances. Can’t do this.

Question 8

Anti-Lapse Legislation

Answer 8

Prevents gifts from lapsing at all if certain conditions are met and instead provides it to be distributed to a certain class of persons connected to the original beneficiary

Question 9

Anti-lapse provision only applies

Answer 9

In instances of people pre-deceasing the testator

Question 10

Once anti-lapse is triggered

Answer 10

It is distributed as if the person had died intestate if person died without any debts and immediately after death of testator (vests right away). As if beneficiary died intestate- goes to issue and spouse

Question 11

2 weird things about NB’s anti-lapse

Answer 11

(1) Spouse not member of preferred class

(2) In ONT step children/ given up for adoption don’t apply but in NB no specific definition

Question 12

Class gifts

Answer 12

Anti-lapse applies to class gifts in NB

Question 13

Re Wolson

Answer 13

Facts: kids when they turned 25, one kid died at 24 in childbirth

Ratio: Anti-lapse doesn’t apply because contingent interest she needed to meet to be eligible for gift

Question 14

Who are members of a preferred class in NB?

Answer 14

Siblings or issue

Question 15

Contrary intention in anti-lapse

Answer 15

If on the face of the will the testator didn’t want anti-lapse to apply

Question 16

Re Wudel

Answer 16

Facts: provision talking about giving to children and if they predecease to potential grandchildren, if not children split. But one child that died before making the will. Absent contrary intention it would go to Marions children.

Ratio: testator deliberately excluded spouse, didn’t want anti-lapse. Knew Marion was dead and didn’t turn her mind to whether there was a gift to her. Contrary intention is not necessarily saying “I don’t want it to apply” but outlining where things will go instead can be too

Question 17

Exception to lapse

Answer 17

(1) Joint tenancy

(2) Gifts made with a moral obligation

Question 18

Joint tenancy exception to lapse

Answer 18

If a testator gives two or more people a gift and directs they take it as JT and one pre-deceases testator their share does not lapse and instead it vests absolutely in the survivor

Question 19

What if tenant in common pre-deceases

Answer 19

Portion subject to usual rules, anti-lapse legislation will apply

Question 20

JT/TC presumption

Answer 20

Unless specifically stated otherwise a TC will be presumed over a JT. Even if it says “taken jointly”

Question 21

Re Couglin

Answer 21

Facts: Jerald only one to survive but not technically nephew, great nephew. If doesn’t go to him in JT it goes to distant cousin in intestacy.

Ratio: word “absolutely” attracts JT because very strong choice of words, clear testator didn’t want anyone else to be part of the estate

Question 22

Gifts made with moral obligation

Answer 22

If T makes a gift to discharge a moral obligation, and the beneficiary predeceases T, the gift doesn’t lapse but passes to the beneficiary’s estate.

Question 23

Re Mackie

Answer 23

Facts: sister in law took care but unexpectedly predeceased testator (10 years younger) he didn’t expect so didn’t provide for this, only way gift could be saved is moral obligation

Ratio:

• Things that don’t count as moral obligation: reasons of past friendship, kindness on part of beneficiary, feeling bad for someone, etc.
• What does count: an actual fixed debt

Question 24

Anderson v Martins

Answer 24

Facts: T made a will and an inter vivos disposition in favor of a friend. Left a small gift for her sole relative, a grandniece ($2K). Her friend pre-deceased her by a week and the grandniece would be set to get everything. Family of pre-deceased said moral obligation.

Ratio: didn’t satisfy “moral obligation”

Question 25

Special situations Where Lapse does Not Apply?

Answer 25

1. Class gifts - In ON, but anti-lapse legislation applies to them in NB
2. Powers of Appointment (didn’t cover)
3. Dissolved Corporations - But most corporate statues provide for a revival mechanism
4. Charities - Gifts made to charities that cease to exist before testator dies – cy pres
5. Secret Trusts - leave someone a gift but Agreement they will actually give the gift to someone else. If trustee predeceases the testator, it lapses.

Question 26

Substitutionary gifts

Answer 26

while you can avoid the doctrine of lapse by providing substitutionary schemes in your will you cannot just write it does not apply you need a substitutionary scheme

Question 27

Re Cousen’s Will Trusts

Answer 27

JT thinks it dumb, said it went too far and didn’t control for it personal representative died

Main point: provide substitutionary schemes