Can Personal Representatives Give all the Deceased’s Property to Themselves Personally?
Personal representatives in the case Guglick Estate (re) commenced an application to transfer lands of the estate to themselves personally. They argued the testator’s will created a power of appointment, which gave them absolute power and sole discretion to determine who should beneficially receive certain farmlands.
At issue was whether the testator intended to create a power of appointment, or a trust.
The Honourable Justice P. Michalyshyn summarized the applicable law at paragraph 10 as follows:
“… no one disputes that as required by s. 26 of the Wills and Succession Act SA 2010 c W-12.2 the will must be interpreted in a manner that give effect to the testator’s intentions. Hicklin Estate v. Hicklin, 2019 ABCA 136 (Alta. C.A.) at paras 48-51 confirms this most important principle of interpretation. Hicklin also confirms that a court may canvass extrinsic evidence to ascertain the testator’s intentions…”
Further, Justice Michalyshyn determined that the testator intended to create a trust, and not a power of appointment.
The language within the will purported to create a trust rather than a power of appointment:
… I give, devise, and bequeath all my property, of every nature and kind and wheresoever situate, including my property over which I may have a general power of appointment, to my said Executors [as above], upon the following trusts, namely
(e) I direct that my Executors shall have the power of appointment with regard to my farmlands and my Executors shall be allowed to transfer the lands or sell the farmlands and to disperse the funds as they shall deem appropriate.
Further, the will was silent as to how the class of Executors would change, and Justice Michalyshyn commented at paragraph 14 that “it is impossible to accept that the testator intended that a wholly new executor would have the general power of appointment with discretion to, for example, designate themselves a beneficiary under the will.”
Justice Michalyshyn then further determined the testator intended to create a trust based on review of extrinsic evidence.
That, is, there was ample evidence the testator intended to keep the farmlands in the family. The testator had also told a residuary beneficiary that he wanted all of the farmland to go to Ronald Osinchuk.
Summed up, all of the evidence of surrounding circumstances supports the finding that the testator intended either to leave the farmlands in their entirety to Ronald Osinchuk, or to leave them ‘in the family’ in any event. There is nothing in the evidence to support the conclusion that the testator intended to leave the farmlands in question to his executors to be dealt with as they saw fit in their absolute discretion – which of course would be the effect of the power of appointment argued for by the co-executors.
Based on the will and extrinsic evidence, the testator intended to create a trust. However, the trust failed due to lack of certainty as to its objects. Therefore, the farmlands became part of the residue of the estate.
This case demonstrates what the court will consider in determining whether a testator intended to create a power of appointment or a trust. If you have any questions regarding powers of appointment or trusts, contact one of the estate lawyers at Kantor LLP. We are happy to be of assistance.