Hidden Coins In The Home: Residue Of The Estate Or Household Contents?

It is not uncommon for executors to make surprising discoveries when administering an estate. Occasionally, that surprise comes in the form of coins hidden in a testator’s home. When a will contains a gift of household contents to one beneficiary and a gift of the residue of the estate to another, an immediate and important question arises: who is entitled to the coins?

Many wills include a clause gifting the contents of the testator’s residence, often described as articles of household use, household goods, or personal effects. In order to avoid a partial intestacy, wills also include a residuary clause, which captures all remaining assets in the estate after debts, taxes, and other testamentary gifts have been dealt with. However, when a will is not clear on whether an asset falls under one of these two categories, courts may be required to interpret the will and determine where those assets fall.

The Will-Maker’s Intention

As a starting point, a court will seek to give effect to the testator’s intention as expressed in the plain language of the will. If that intention cannot be clearly determined from the wording alone, the court may look to the surrounding circumstances known to the testator at the time the will was made. Therefore, in deciding whether coins or significant amounts of cash found in the home form part of household contents or instead fall under the residuary clause, the court will be guided by what the testator intended. Where the language of the will is unclear, courts may consider the surrounding circumstances, such as how the coins or cash were stored, used, or regarded by the testator.

Case Example

This issue was addressed some time ago in Di Bella v. Kangas, 2001 BCSC 315, but the case still provides helpful guidance to this day on how courts may interpret cash found inside a testator’s home.

Before her passing, Katherine Kangas asked two of her nephews (the “Kangas Brothers”) whether they were interested in the contents of her house. They told her they were not interested, so she left the household items by her will (the “Will”) to her other nephews (the “Mitchell Brothers”) and left the entire residue of her estate to the Kangas Brothers.

After Ms. Kangas’s death, the executor discovered more than $25,000 in cash and coins hidden in ten separate locations throughout her house. The executor asked for advice and direction from the Court on whether the following provision in the Will included the cash and coins found in her residence:

“to divide and distribute the contents of my residence at […] including household goods, chattel, furniture and all my effects of personal, domestic and household use or ornament among […]”.

If the money was considered household contents, they would pass to the Mitchell Brothers as they were named in that clause. If not, they would fall into the residue to be distributed to the residuary beneficiaries, the Kangas Brothers.

The Court’s Analysis

The Court began by recognizing that Ms. Kangas knew that there was a large amount of cash in her house and that her executor would have discovered its existence after her death. However, that fact alone did not mean she intended the cash to be included in the gift of household contents. It was unlikely that Ms. Kangas, on reading the Will, asked herself whether those words in the Will meant giving the cash to the Mitchell Brothers or to the Kangas Brothers.

The Court then interpreted the language of the Will, as a whole, in light of the surrounding circumstances. First, the Will described “contents” as including household goods, chattel, furniture, and personal domestic effects. The Court applied the well-established principle of interpretation known as the ejusdem generis rule, which provides that where general words are followed by specific examples, the general words are limited to items of the same type as those listed. Based on this principle, the Court concluded that cash and coins would be excluded from the category of household items as large amounts of cash are not typical contents used and enjoyed in a house.

In addition, the Court also considered the contrast between the gift of the household contents to the Mitchell Brothers and the gift of the residue of the estate to the Kangas Brothers. The residual clause authorized the executor to convert assets into money, which was to be divided equally between the Kangas Brothers. In contrast, Ms. Kangas intended the household contents to be divided between the Mitchell Brothers “as they shall agree”. The Court considered these words to suggest that Ms. Kangas anticipated some of the contents of the house, which she had inherited in part from the mother of the Mitchell Brothers, may have some heirloom or sentimental value to the Mitchell Brothers. In addition, these words suggested an intended division of the household contents in specie, rather than by liquidating them and converting them to cash. The Court opined that the Will clearly treated cash or coins and household contents as distinct categories of assets. If Ms. Kangas intended the household contents to include the money, she would have divided that money equally amongst the Mitchell Brothers.

Based on all of the circumstances, the Court concluded that the money formed part of the residue of the estate and was to be divided equally between the Kangas Brothers.

Key Takeaway

Whether coins or significant amounts of money found in a home are included in a gift of household contents turns on the testator’s intention ascertained from the language in the will and other surrounding circumstances. This case serves as a reminder that proper estate planning and proper legal advice during estate administration is critical in order to avoid uncertainty, especially where valuable assets are discovered after the testator’s death.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.