News Hoax Prompts Interesting Estate Planning Questions

December 5, 2016 Ian Hull Beneficiary Designations, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, News & Events, Uncategorized, Wills Tags: , , , , , 0 Comments

With the unfortunate increase in fake news stories circulating the internet, one particular fabricated story nonetheless raises important estate planning considerations.

True: Mr. Antonino Fernandez died in August 2016. Mr. Fernandez was the owner of Corona beer, and chairman of Grupo Modelo, which also exports Modelo, and other Mexican beers. Mr. Fernandez was a philanthropist who set up establishments to encourage rural development in his birth area, as well as charitable foundations in both Mexico and Spain to ensure employment opportunities for disabled individuals.

False: In his will, Mr. Fernandez left every resident in his birth village, Cerezales del Condado in Spain, 2.5 million dollars.

A recent news hoax about the late Mr. Fernandez leaving a generous gift to each of the residents in his birth village raises the question whether such a testamentary disposition would have been valid.

Who Would Get a Distribution?

According to the fabricated story, Mr. Fernandez gave each resident of his village 2.5 million dollars upon his death pursuant to a clause in his testamentary document that apparently stated “for the benefit of the village`s inhabitants“. His village had 77 residents.

In Mr. Fernandez’s purported will, he left his fortune to his 13 siblings and extended family. Each villager did not directly get a distribution. If the disposition to the villagers did exist, would the siblings be obligated to distribute the estate based on the foregoing provision?stocksnap_aawg5oao53

Would the Will Be Void for Uncertainty?

While each villager would have been informed that they were to receive a distribution from Mr. Fernandez, due to the drafting of the will, it is unclear if they would have received a distribution.

To prevent the villagers from recovering their distribution, the siblings would want to argue that the term in the will benefiting the villagers was void for uncertainty. As such a will would be ambiguous, the parties may need to look to a Judge to help interpret the will.

Pursuant to the decision of the Ontario Court of Appeal in Re Burke [1959] OJ No 706, the judge must study the whole contents of the will, and after full consideration of all the provisions and language used therein, try to find what the intention was in the mind of the testator. When an opinion has been formed as to the intention of the testator, the court should strive to give effect to it.

As established in Montreal Trust Co. v Sinclair (1958 CarswellMan 39) “one of the commonest forms of uncertainty in this respect is where the gift provides for selection from a number of persons or bodies and does not state who is to make the selection or how it is to be made.“ In the false case of Mr. Fernandez, it may be argued that while he left a gift to the inhabitants of his village in his will, he did not specifically state how a villager was to be defined.

Furthermore, the Supreme Court of Canada in Brewer v McCauley [1954] SCR 645 established that “a testator must, by the terms of his will, himself dispose of the property with which the will proposes to deal. He may not depute that duty to his executors or trustees“ In this case, the siblings of Mr. Fernandez could also attempt to argue that Mr. Fernandez left an unclear condition on the gift to them, and that leaving the distribution of the gift to the villagers to his siblings was an improper delegation of testamentary authority.

Thanks for reading,

Ian M. Hull

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