A will leaves assets in trust for wife for life, subject to that, to divide equally between the issue of A,B and C.
Is this issue alive at the date of the Will, the date of the death of the husband, the date of death of the surviving wife, or whenever born?
Simon Northcott
As the gift is subject to a prior life interest, in the absence of words to the contrary, or any additional contingency or condition, the gift to issue will vest in those in existence when the life interest terminates – applying the Rule in Andrews v. Partington.
Is the gift stated to be in equal shares to “the issue of A, B and C”, though? If so, then there are other questions that need to be considered:
Is it a gift to B, C and the issue of A;
Is it a gift to the issue of each of A, B and C;
Is it intended that “issue” applies to all descendants, or is it intended to be limited only to children;
Is the gift to be divided per capita, or per stirpes?
It may be necessary to review the will instructions to (hopefully) remove any uncertainty.
Paul Saunders
Is the interest of the issue subject to any age contingency?
Diana Smart
Gordons LLP
I’m presuming no age contingency?
If no age contingency then I would say the class closes when first beneficiary turns eighteen post testator’s death, and it is all those living then. If one is already age eighteen at date of death then I would say the class closes upon testator’s death. The interest vests upon testator’s death. It is the share that is subject to class closing.
My view is that this is a class closing question and the life interest is a red herring, unless it is expressly stated that issue of A, B and C only take upon surviving the life tenant.
Of course the intentions off the testator may be relevant to a difference of interpretation in the event of.
Jane Huntley
Chadwick’s, Leyland
For practicality I would have thought it was those alive at the death of the surviving spouse since that is when the property needs to be divvied up but I am not a solicitor.
Presumably the Will doesn’t make it clear or you wouldn’t be asking. What is customary under such circumstances?
Maxine Higgins
Citroen Wells
No
Having pondered further in light of other replies, I still think that the relevant date is the death of the testator. I now think that the remainder issue vests and class closes then.
However, I believe if there is no issue/remainderman at that point, then there is case law which considers the position if some comes along during the life of the life tenant. I can’t work out when the class closes then though!
Really interested to hear other replies and pointers. This discussion is relevant to a couple of ongoing debates at work.
Jane Huntley
Chadwick’s, Leyland
Yes I know, lots of problems! Thanks for the reminder of A v P
Simon Northcott
Lewin on Trusts contains a useful analysis of the issue (under the heading “Class Gifts”), commenting “Where the class gift is postponed, for instance, to an intervening gift of income to X for life and on his death to A’s children, and at the termination of X’s interest by his death, disclaimer, or bankruptcy, A has one or more children, they take to the exclusion of all later born children of A”. However, if there are no issue alive at the termination of X’s prior interest, it appears that all of A’s children will take, whenever born!
This appears to be the general rule, absent the inclusion of any contrary intention in the relevant trust instrument.
If you are able to access Lewin, this might assist your deliberations.
Paul Saunders
Thank you Paul.
I’m sorry, I don’t have access to Lewin, and I hope members will forgive me if they think that I have hijacked the thread unnecessarily. I really want to get to the bottom of the different interpretations. I feel like I am missing the point somewhere.
I read the use of the word “postponed” in Paul’s extract from Lewin to mean some future contingency has to be met to become a member of the class. In Lewin’s example it seems to be surviving X by the use of the words “on his death”. If so, I agree that the members of the class are defined at the death of X. Until X dies, they have a contingent future interest.
In the wording presented by Simon, I felt that the the issue of A, B, and C have a vested future interest upon the death of the testator. I do not read in any contingency into the stated wording. I read “subject to that” to mean “subject to the life interest”, not “subject to surviving the wife”. Is this where our interpretation differs? Perhaps the accepted interpretation is “subject to surviving the termination of the wife’s interest”!!?
I seem to be thinking the complete opposite to Paul in my long held belief that, unless clearly expressed otherwise by some stated contingency (age, survival of life tenant or other person), the remainder interest vests (albeit as a future interest) upon the commencement of the trust (the death of the testator in this case).
I agree with Paul that the definition of “issue of A, B and C” needs clarifying.
I am sorry I have been unable to review Lewin within a reasonable time-frame for this thread, but I would welcome others’ views.
Jane Huntley
Chadwick’s, Leyland
It’s interesting that there should be so much uncertainty amongst us (I include myself here) about what I would have thought should be a fairly fundamental point. For myself, I am inclined to agree with Jane Huntley, partly because her understanding has always been mine, and also because the example in Lewin that I have seen (at 5.088) does expressly state that the remainder interest vests on the death of the life tenant (and so is subject to that particular contingency), which does not appear to be the case here.
In my opinion, the remainder interests in this example vest outright and immediately on the death of A (the testator), regardless of W’s prior life interest, because the will takes effect on death and the remainder gifts are not subject to any contingency at all. The rule in Andrews v Partington will act to close the class of ‘issue’ at that point so that: any issue born (i.e. conceived) after A’s death will be excluded; any issue who have predeceased A will not take at all; and, the share of any issue who die after A, whether or not before W dies, will pass to their estate.
I’m assuming here that the gift is to the ‘issue of A’, ‘the issue of B’ and ‘the issue of C’ but the same thinking would apply, I believe, even if the gift were to B and C rather than their issue.
Like everyone else, I would be interested to hear any other views.
Benjamin Lowe
Clapham & Collinge
I must confess that I had always believed that where there is a prior life interest the closing of the class does not happen until the life interest ends. That may be correct but I suspect the answer is not as simple or certain as that.
Williams on Wills contains some discussion on the subject, and the following extracts may be relevant:
“Where it cannot be gathered, from the context and the circumstances of the case, what time is referred to for ascertaining a class, the court acts upon certain rules of construction, which have been framed for the convenience of the donees and of the administration of property, and have accordingly been called rules of convenience.1 They are admittedly not founded on any view of the testator’s intention,2 and are artificial.3 The rules both as to real and personal property are said to be founded on the presumption that only persons in being are intended to take.”
“First rule of convenience. A class1 is prima facie composed of those members (if any) existing ascertainable and capable of taking2 at the death of the testator,3 but where the period of distribution is at a later date, the class opens so as to let in all those members coming into existence before the period of distribution.4 Apart from the letting in of additional members, the postponement of the gift does not otherwise postpone the time of ascertainment of the class,5 and, on the one hand, persons who come into existence after the period of distribution are excluded,6 and, on the other hand, those in existence at the death of the testator take an immediate vested interest, so that, if they die before the date of distribution, their share passes to their personal representatives.7 Where, however, the gift is immediate, but at the death of the testator no member has yet come into existence, then all the members of the class who are born at any future time prima facie are intended to take under the gift.”
“The period of distribution. The period of distribution may be postponed either by some prior gift, or by the nature of the property given, or by the conditions of the gift.”
“Postponement by life interests. In cases where the gift is postponed to a life interest, the period of distribution is usually, but not necessarily, the determination of the life interest,1 …”
These appear to confirm my original belief but it seems clear that this is not necessarily always going to be the case, and much will depend on the intention of the testator, if that can be ascertained. The second rule of convenience relates to conditions such as age contingencies, which I gather are not relevant in this case.
Diana Smart
Gordons LLP
I have had another look and now think that Diana and Paul have it right. Although remainder interests may vest on the death of the testator, the class of remainder beneficiaries will not close until at least one has an interest that is vested in ‘possession’ (i.e. a present right to present enjoyment) which necessarily means on the death of the life tenant or other ending of the prior life interest. Subject always to any contrary intention.
Benjamin Lowe
Clapham & Collinge