I have a client who has died and in their will there is a clause that states: -
"Of my shares in my company X Ltd I give the following: -
(i) Fifty of such shares to x
(ii) Forty of such shares to Y
(iii) Ten of such shares to Z"
There are no other relevant provisions in the Will. When checking with the company accountants it appears that the deceased only ever had 2 shares in the company and was the only shareholder. The company was incorporated with 2 shares, had 2 shares when drafting the Will and 2 shares at the date of death.
X, Y & Z are the residuary beneficiaries in equal shares but Z predeceased so X & Y share the Residue equally. The business represents about 85% of the estate so X getting a larger share of the business gift does have an effect on the value they will inherit.
My question is does this gift fail and therefore the whole value of the gift fall into residue and be divided equally, or can it be read as effectively being percentages of the shareholding and therefore only Z’s 10% falls into Residue?
I fear the answer is that the gift fails but if anyone feels otherwise your thoughts would be appreciated. If the gift does fails are there any actions that could be taken save for X and Y agreeing to a variation?