Failure of gift of reversionary interest in property under an IPDI

I am hoping for some assistance in relation to the treatment of a failed gift included in an IPDI trust over property. Husband (H) and wife (W) co-owned a property as tenants in common in equal shares. W made a will which settled her interest on IPDI for H with remainder interest for adult child (vested in remainder). There were no substitute gifts and the son had no issue (and in any event s. 33 Wills Act is disapplied). The residue of the estate passes to H absolutely.

Child died first, followed by his mother (W). A firm of solicitors involved in W’s estate has suggested that with regard to the failed gift to W’s child a partial intestacy arises. However, as the child predeceased W I wondered whether the doctrine of lapse should apply instead; the effect being that the reversionary interest in the property falls into residue and passes to H (whose life interest is then extinguished in favour of an absolute interest). However, I am struggling to find anything that confirms the correct approach, so any guidance would be gratefully received.

Thank you.

Benjamin Simpson
Maitland Walker LLP

Do not believe the doctrine of lapse applies. On W’s death the gift of property is made to the trustees to be held on trust by the trustees for the IPDI beneficiary and the adult child in remainder.

Equally there does not appear to be a partial intestacy.

On the death of the life interest beneficiary, H, the property does not fall into possession on the part of the adult child. However, the property falls into the child’s estate and passes under the child’s will or on intestacy.

Malcolm Finney

There will be a partial intestate related to the death of W on the death of H. It will never have vested in the child’s estate as he died before W, so it cannot be treated as an intestacy by reference to him.

Simon Northcott

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