When interpreting wills, judges focus on the actual words used and that is one good reason why professional drafting really matters. As a guideline case showed, only in the event that the wording of a will is meaningless or ambiguous will extraneous evidence concerning the deceased’s intentions become relevant.
By her will, a woman bequeathed her home, her shares in a company and all of her personal possessions to a friend. In a further clause, she also left him what was described as a ‘nil-rate sum’. That was defined as the largest cash sum that he could receive without Inheritance Tax (IHT) becoming due on her estate. After a number of modest pecuniary legacies, the residue of her estate was left to 21 identified charities.
Following her death, a dispute developed as to the meaning of the clause. The friend contended that, on its true interpretation, it meant that he was entitled to a tax-free cash sum from the estate of £325,000, the nil-rate band for IHT purposes that was in force at the time of the woman’s death.
One of the charities, however, pointed out that the value of the bequests made to the friend elsewhere in the will significantly exceeded the nil-rate band. That band having been used up, it contended that, on a correct reading of the clause, he was entitled to nothing further from the estate.
In support of his case, the friend sought to adduce extraneous evidence contained in a sworn statement from the legal executive who drafted the will, which was said to cast light on the woman’s intentions when she made it. After refusing to admit that evidence, however, a judge preferred the charity’s interpretation of the clause.
In dismissing the friend’s challenge to that outcome, the High Court noted that Section 21 of the Administration of Justice Act 1982 only permits extraneous evidence as to a testator’s intentions to be taken into account in a will construction dispute where the wording of relevant parts of a will is either meaningless or ambiguous.
The Court found that the wording of the clause, together with the will’s definition of ‘nil-rate sum’, made sense as a matter of English and could only bear the meaning for which the charity contended. The words used were ambiguous neither on their face nor in the light of the surrounding circumstances. The judge was therefore correct to take no account of the extraneous evidence concerning intention.
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