Lapse and Anti-Lapse
I regularly tutor students who are preparing to write the Estate and Trust section of the Solicitor’s exam for the Law Society. One of the more common questions that my students ask is for help in explaining two concepts: lapse and the “anti-lapse provision”.
The common definition of a lapsed gift, is a gift that has failed because it is incapable of taking effect. Two common reasons for a gift to be incapable of taking effect is where the beneficiary predeceases the testator or the gift is disclaimed by the beneficiary.
Pursuant to Section 23 of the Succession Law Reform Act, unless a contrary intention appears in the Deceased’s Will, if a gift is incapable of taking effect, the failed gift will fall into the residue of the testator’s estate and distributed accordingly.
Section 31 of the Succession Law Reform Act is commonly referred to as the anti-lapse provision. The anti-lapse provision saves a failed gift if the beneficiary falls into the class of beneficiaries set-out under this provision and that beneficiary leaves a spouse or issue who survived the testator. If these conditions are met, the gift will not fall into the residue, however it will take effect as if it had been made directly to the spouse or issue of predeceased beneficiary.
Thank you for reading, and have a great day.
Rick Bickhram – Click here for more information on Rick Bickhram.