Planning your Will: What’s the best way to deal with personal and household articles?

The method you choose could make things easier, or it could lead to problems such as disagreements among beneficiaries. Should you make a note separate from your Will to deal with personal or sentimental items? Understanding how the law views such documents will help you decide.

Sean Rheubottom, B.A., LL.B., TEP 

Many Testators choose to prepare a memorandum setting out the distribution of their personal effects, rather than dealing with them directly in the Will.

It is important to note that such a memorandum will not always be legally binding on the executor, and may not be enforceable should a beneficiary under the will choose to disagree with it. A separate memorandum is legally binding if it is validly incorporated by reference in the terms of the will. The common law rules regarding incorporation by reference are fairly strict: the memorandum must have been in existence at the time the will was executed, must be described with sufficient clarity to be readily identified, and must be referred to in the will as an existing document.

In accordance with these rules, the courts have sometimes held, even where it was fairly clear that such a memorandum was made by the testator, that the memorandum could not be upheld as binding because it was made after the will was signed. The courts must adhere strictly to the doctrine of incorporation by reference so as not to open the door to attempts by people to rely on fake documents where they are unsatisfied with the provisions of the will. The doctrine also ensures that the legislated safeguards around the execution of wills (for example, the presence of two witnesses who swear that the Testator was of sound mind) will be present at the time the Testator is contemplating the memorandum. The formality of the rules is meant to ensure that only the Testator's wishes are honoured when the estate is administered.

In view of the foregoing it will be seen that including valuable or potentially contentious gifts in the terms of a non-binding memorandum my not be sound planning. The persons who stand to benefit under the memorandum will feel strongly that the intentions evidenced therein should be honoured. However, the beneficiaries who would otherwise receive the items under the Will may be technically correct if they choose to argue that the memorandum cannot be upheld as binding.

Legally binding memorandum…Or simply include the gifts in your Will

Therefore where important or potentially contentious gifts are contemplated, the better practice might be to use a legally binding memorandum (i.e., one that is in compliance with the doctrine of incorporation by reference). However, if the Testator wishes to make binding changes to the memorandum later, a new Will or codicil would have to be made. It may be simpler to include the gifts directly in the terms of the will itself, and if changes are desired after execution, to make those changes by way of a formally executed and witnessed codicil. The execution of a codicil requires the same formality as that prescribed for Wills.

Non-binding memorandum: Flexibility to add or update gifts informally

However, it is probably safe to say that typically executors and the beneficiaries are able to respect the Testator's wishes expressed in non-binding memoranda. Use of a non-binding memorandum can be a useful strategy for dealing with minor gifts because it allows the Testator the flexibility to make changes from time to time without formally amending the Will.

© Heritage Private Wealth Law

General information only; not intended as legal or tax advice. Readers are encouraged to obtain legal and tax advice before acting in their specific circumstances.