If a testator wants to give property to multiple beneficiaries, one way that this objective can be achieved is through a class gift. Class gifts are given to beneficiaries as a group or as a class, rather than individually. For example, a testamentary gift to all of the testator’s “children” in a will would be considered a class gift, particularly if the children are described as a group only.
One of the advantages of class gifts is that they will not lapse if a member of the class predeceases the testator – in that case, the deceased member’s share of the gift will simply go to the remaining members of the class. However, the distribution of a class gift can be more complicated if a member of the class passes away after the testator, but before the estate has been distributed. Under these circumstances, the deceased class member’s entitlement to share in the class gift will depend on how the testator’s will was drafted, as demonstrated by the BC Supreme Court’s recent decision in Lewis v Jack, 2025 BCSC 343.
The testator in this case executed a will which left the residue of his estate to his sons, Travis and Jason, in equal shares so long as they were “then alive.” When the testator passed away, both sons were alive; however, Jason passed away before the estate was distributed. As a result, the court was asked to determine whether Jason’s estate was entitled to share in the class gift because he was alive when his father passed away, or whether his interest in the class gift was forfeited because he passed away before the residue was divided into equal shares and distributed.
To answer this question, the court interpreted the language used in the testator’s will. The salient clause of the will directed the testator’s trustee to gather the estate’s assets, pay the testator’s debts and divide the contents of his home; lastly, it directed the trustee “to divide the residue of my estate then remaining into as many equal shares as there shall be children of mine then alive and to give absolutely one (1) such equal share to each child” (emphasis added).
In light of the wording of the testator’s will, Justice Smith held that only members of the class who were alive when the estate was distributed could share in the residue. First, the court found that the will directed the testator’s trustee to do things sequentially, meaning that the residue was to be divided after the estate’s assets were gathered, the debts paid and the personal property was divided. Second, because of the way that the term “then” was used in the residual clause, Justice Smith concluded that the testator intended to distribute the residue of the estate to the children who were alive at the time of distribution:
“It is apparent that the use of ‘then’ in the context of the residue of the “then remaining” estate to be divided is not referring to the residue at the time of Kenneth’s death, because the residue only exists after the payments of debts, expenses, etc. Drawing on the presumption of consistent expression in interpreting the ordinary meaning of the language, “then” in the context of the children “then alive” is referring to the same time as “then” in the context of “then remaining” in the same provision.”
Since the beneficiary class was to be determined at the time of distribution, rather than the time of the testator’s death, Jason’s interest in the estate was forfeited.
It merits noting that if the will had been drafted differently and did not refer to children “then alive,” Jason’s estate may have been entitled to share in the class gift. Under the “usual rule” applicable to class gifts, the class of beneficiaries entitled to share in the gift will close and the gift will vest when the testator passes away. Accordingly, if a class member dies after the class has closed, they are still considered part of the class and their share of the gift is payable to their estate. It is only if the will expresses a contrary intention that the class will close and the gift will vest at a different time. As noted by Justice Smith, the usual rule is grounded in a number of presumptions and preferences, including a preference not to leave a class “open for a lengthy period,” and “to not have a bequest depend upon the act of the executor, be it the diligence or lack thereof in administering the estate, or some deliberate act on their behalf to favour the size of their own gift.”
While class gifts may seem relatively straight-forward, this case demonstrates that determining when the class closes and who is entitled to share in a class gift can be tricky, depending on how the class gift is drafted.
Have a wonderful rest of your day,
Suzana.