Sometimes a testator’s will or estate plan will fail to accomplish what the testator intended. Luckily, the court can often fix such problems by utilizing an array of tools to determine and implement a testator’s intentions. For example, the armchair rule can be used to determine the testator’s intent in light of surrounding circumstances, rectification can be used to correct a will, and section 21.1 of the Succession Law Reform Act can be used to validate stamentary instruments that are non-compliant with the execution requirements applicable to wills in Ontario.
Despite the variety of tools available to save testamentary bequests, the Nova Scotia Court of Appeal’s recent decision in Troop v. Troop Estate, 2023 NSCA 83demonstrates that there are still limitations on the court’s power, particularly when it comes to imperfect inter vivos gifts.
In this case, the testator’s will referenced land held in joint tenancy with his son, noting that the son would be the sole beneficial owner of the land after the testator died, without any resulting trust for his estate. There was a problem, however – the land was never transferred into joint tenancy. While the testator’s intention for the property was recorded in the will, he had failed to carry that intention out before he died. Given the circumstances, the executor of the estate applied for directions from the court as to how to proceed. While the judge found that the testator had intended to gift the property to his son, the court could not direct the executor to transfer the property to him because the property technically was not gifted through the will. The judge’s hands were tied, as a “Court … cannot force something to happen that’s outside the will”.
The son appealed and asked the Nova Scotia Court of Appeal to save the gift using an anti-lapse provision in Nova Scotia’s Wills Act or, alternatively, by using common law principles. While the court was sympathetic, the appeal was dismissed. The anti-lapse provision could not be utilized, as the legislation specified that it only applied to devises, which the court noted were “testamentary [acts], distinct from granting or conveying typically associated with an inter vivos transfer by deed”. To put it simply, there was no lapsed devise in the testator’s will to be saved.
The son also tried to utilize the armchair rule to save the gift, arguing that the court had to interpret his father’s will in conjunction with all of the surrounding circumstances. However, this argument failed as well – the Court of Appeal found that when utilizing the armchair rule, the surrounding circumstances must relate to “the interpretation of a gift in the Will – not a gift to be implemented by a deed that was never signed.”
The court also rejected the son’s claim that the will created a trust and that the testator was holding the land in trust for his son pending his death, affirming that a trust cannot be imposed by the courts “in order to perfect an imperfect gift”.
Returning to the question posed in the title of this blog post, the Nova Scotia Court of Appeal makes it clear – a will cannot be used to save an imperfect inter vivos gift. It does not matter if the testator’s intent to give an inter vivos gift as part of his or her estate plan is clear – principles and rules that can be utilized to save imperfect testamentary bequests do not extend to imperfect inter vivos gifts, even if a will clause which expresses the testator’s testamentary intent is clearly premised on an imperfect inter vivos gift.
Luckily, there is a simple way to avoid the problem that arose in Troop v. Troop Estate. For testators who want to utilize inter vivos transfers when crafting an estate plan, in addition to traditional testamentary instruments, the inter vivos transfers should simply be completed at the same time that the testamentary instrument is executed, to ensure that the transfer is not subsequently forgotten or overlooked.
Thank you for reading, and have a great day!