Make sure you understand the implications of legal terms in your will. Here are a few common legal terms found in wills and their implications that must be carefully considered.
Our common law imposes a duty on all our descendants (i.e. our children) who are our heirs whether testate or intestate to account to our estates for gifts and advances made to them during our lifetimes.
The legal term for this principle is “Collation”.
The basis for collation is that the parent is presumed to have intended that there should be equality in the distribution of his or her estate among his or her children. Therefore substantial gifts, advances of money to a child must be taken into account in the distribution of that child’s inheritance. The child must either restore the property given to him or allow a deduction of its value at the time it was given, from his or her inheritance.
Collation further takes place by operation of law and therefore applies automatically to your will, or if you have failed to execute a will it applies to your intestate heirs.
If you, therefore, intend to release any of your descendants (heirs) from this obligation to collate, it should be clearly expressed in your will.
The term “issue” normally means children and further descendants. The term “children” generally means descendants in the first degree. It is therefore important to use the specific term intended when you draft your will and not to use these terms interchangeably.
Residue is usually interpreted as being what remains in your estate after payment of all debts and special bequests. If you leave the residue to a beneficiary they will only inherit what remains in your estate after payment of all debts and special bequests.
Considering the above, it is important to have your true intentions reflected in your will and to enlist the services of an attorney to assist you with the drafting of your will.