The problem with survivorship clauses

 In Wills

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The problem with survivorship clausesIt is easy to think of a survivorship clause as an example of the sort of ‘boilerplate’ clause that is frequently included in a will from a precedent without much thought being given to what its practical consequences will be in various different situations. Jump v Lister [2016] EWHC 2160 (Ch) should serve as a cautionary tale against that approach.

The facts

Mr and Mrs Winson lived in Cumbria and had no children. They were both in their mid-80s when in 2009 they approached a solicitor with a view to preparing mirror wills. In summary, the structure of both wills was that on the first death the estate of the first to die would pass to the survivor, and then on the second death 23 pecuniary legacies totalling £214,000 would be paid to 13 individuals and 10 charities and, subject to a few specific bequests, the residue would pass to Mr and Mrs Winson’s two nieces. As explained further below, both wills contained 28-day survivorship clauses.

The draftsman’s evidence was that he had attended on Mr and Mrs Winson at home to supervise the execution of the wills (which was witnessed by two neighbours), and that before the wills were executed Mr Winson had asked him, in Mrs Winson’s presence, to confirm that the 23 legacies would only be paid once on the death of the survivor, and the draftsman had confirmed that was the case.

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Approximately a year and a half later Mr and Mrs Winson were both found dead at their home. They had both last been seen alive approximately a week before. An inquest was held and the coroner determined that they had both died of natural causes, but was unable to determine who had died first.

Mrs Winson was 88 and Mr Winson was 85 years old at the date of their deaths. Accordingly, Mrs Winson, being the elder, was presumed to have died first as a result of the so-called ‘commorientes rule’ (section 184 of the Law of Property Act 1925).

However, a question then arose as to the effect of the survivorship clause, given that neither Mr nor Mrs Winson had survived the other by 28 days. In particular, the issue concerned the interaction between the gift by Mrs Winson (who was deemed to have died first by the commorientes rule) of her residuary estate to Mr Winson and the survivorship clause: was the gift of residue to Mr Winson subject to the survivorship clause, and did it therefore fail because Mr Winson had not survived Mrs Winson by 28 days? If so, it seemed that the 23 legacies would have to be paid twice, once out of each estate, which on the evidence was not what Mr and Mrs Winson intended.

The relevant clauses of Mrs Winson’s will provided as follows:

6 Residue

I give to my executors my estate anywhere in the world including any property over which I have a general power of appointment TO HOLD it on trust:

6.1 to pay my debts, taxes and funeral and testamentary expenses;

6.2 to pay the residue to my husband John Raymond Winson; but if this gift fails

6.3 to divide the residue in accordance with clauses 6 [sic: 7] to 11 hereof.

[…]

  1. Technical Clauses

11.1 The Standard Provisions of the Society of Trust and Estate Practitioners (1st edition) apply, amended as follows:

11.1.1 Standard provision 5 (“trust for sale”) does not apply.

11.1.2 My executors may exercise their powers without consulting beneficiaries, so section 11 of the Trusts of Land and Appointment of Trustees Act 1996 does not apply.

11.2 My estate is to be divided as if any person who dies within 28 days of my death had predeceased me.

After Mr and Mrs Winson’s deaths, the nieces as residuary beneficiaries instructed the draftsman’s firm to administer the two estates, which were sworn at c.£968,000 and c.£798,000 respectively. The firm advised that the survivorship clause applied to the gift of residue to the surviving spouse and that because neither spouse had survived the other by 28 days, both were deemed to have predeceased the other and the 23 legacies therefore had to be paid twice, once out of each estate. The nieces were initially content with that, but later changed their stance and instructed new solicitors who alleged that that result failed to give effect to Mr and Mrs Winson’s intentions (that the legacies should only be paid once out of the estate of the survivor) and made them as residuary beneficiaries worse off to the tune of £214,500 (i.e. the duplicate payment of the 23 legacies), in respect of which they threatened professional negligence proceedings. The draftsman’s firm (via its insurers) also instructed solicitors, who argued that as a matter of construction the survivorship clause in Mrs Winson’s will (clause 11.2, set out above) could be said not to apply to her gift of residue to Mr Winson (clause 6.2, set out above) and that this would resolve the problem.

This ultimately led to a construction claim being issued pursuant to CPR Part 64. Somewhat unusually, the nieces argued that the survivorship clause did apply to Mrs Winson’s gift of residue to Mr Winson, despite the fact that this made them £214,500 worse off; those legatees who contended that they should receive their legacies twice took no active role in the proceedings because the nieces were already advancing their argument for them; and it was left to the draftsman to advance the contrary argument that as a matter of construction the legacies were only payable once.

The decision

The judge identified the question the court had to determine as being “whether the survivorship clause set out in clause 11.2 of Mrs Winson’s will applies to the gift she made to her husband by clause 6.2 of that will”. He acknowledged that it was common ground that if it did, and if as a result the 23 legacies had to be paid twice, that did not accord with Mr and Mrs Winson’s intentions:

what [counsel for the nieces] characterised as “the somewhat surreal situation” would arise whereby neither spouse would inherit the other’s estate due to both of them having been deemed to die before the other. It is common ground that this is not what either Mr or Mrs Winson intended.

Despite this, the judge concluded that the survivorship clause did apply to the gift of residue Mrs Winson had made to Mr Winson, which failed accordingly:

Ultimately, as with so many questions concerning the interpretation of a will, the issue is a short one. In my judgment, the submissions of [counsel for the nieces] are to be preferred to those of [counsel for the draftsman] attractively though the latter were presented. As [counsel for the nieces] points out, the question is not one as to the meaning of the survivorship clause but rather as to its application. Is it what has been termed an ‘omnibus’ survivorship clause, which applies throughout the will generally, or is its application confined to the secondary gift, which takes effect only if the primary gift to the spouse of the maker of the relevant will fails?

In my judgment, the wording of clause 11.2 of Mrs Winson’s will is clear. The key words are “my estate” and “any person.” The term “my estate” in clause 11.2 bears the same meaning as at the beginning of clause 6. The word “any person” refers to any person named in the will. There is nothing in the will to exclude the relevant spouse from the ambit of the description “any person” or to restrict the application of clause 11.2 to the residue of the estate in the event of the failure of the gift to the primary beneficiary, the husband of the testatrix.

Clause 11.2, in my judgment, provides in clear and unambiguous language for how Mrs Winson’s estate is to be divided if any person named in the will, including any surviving spouse, dies within 28 days of the death of the maker of the will.

Implications

Construction claims invariably turn on their own particular facts. Nevertheless, it is suggested that the following general comments can be made about the decision.

  • The modern approach to construction of wills, as summarised by the Supreme Court in Marley v Rawlings [2014] UKSC 2 (in particular at [19]-[26]), is now tolerably clear and has been followed in several recent cases. Decisions such as Reading v Reading [2015] EWHC 946 (Ch), Slattery v Jagger [2015] EWHC 3976 (Ch) and The Royal Society v Robinson [2015] EWHC 3442 (Ch) illustrate the court’s willingness to adopt a flexible approach to construction in order to give effect to the testator’s intention, even if that requires the court to give particular words a slightly unusual meaning. Jump v Lister is a reminder that there are limits to how far the court will go to help: the judge felt bound to adopt a literal construction despite it being common ground that doing so would defeat the testatrix’s intentions.
  • Jump v Lister is also a helpful reminder that it is always a good idea to go through and explain the entire will to the testator clause by clause, including ‘boilerplate’ clauses. Though undoubtedly time-consuming, this is likely to be a good way of spotting any clause which has been accidentally copied from a precedent but which should not in fact be in the will, and may also create an opportunity to consider and discuss the effect of a particular clause in different hypothetical scenarios and allow the testator to make an informed decision as to whether the clause is in fact consistent with his intentions.

You might also be interested in the forthcoming webinar

"Drafting a 'standard' Family Will"

10 May 2017 (recordings available after this date)

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