The North Carolina Court of Appeals has handed down an opinion ruling that typical language contained in a boilerplate residuary clause of a will evidences a clear intent upon the part of a testatrix to avoid the operation of the anti-lapse statute. The operative language in the residuary clause was "including all lapsed legacies and devises, or other gifts made by this will which fail for any reason". We believe that this opinion is clearly wrong in its interpretation of the law, that it misinterprets the clear intentions of the testatrix and that it runs contrary to the common expectations of the public. It is hoped that this decision will be considered by the North Carolina Supreme Court and reversed. It should be noted that the Superior Court judge in the trial court, Hon. Clifton W. Everett, Jr. is widely considered to be an extremely knowledgeable real property attorney. Reversing the judgment of the trial court in this case might be considered analogous to inferring that Dean Webster didn’t teach property law knowledgeably.

Defendants appealed a judgment ordering that the legacies and devises granted to George M. Stevenson, Jr. under the Will of Hazel Piland Stevenson (testatrix) pass to George M. Stevenson, III. The testatrix who died in January of 2000 was predeceased by her son, who died in November of 1999. The Court of Appeals ruled that the trial court erred in applying the anti-lapse statute, N.C. Gen. Stat. § 31-42, to the legacies and devises bequeathed to George M. Stevenson, Jr.. This resulted in his only child, George M. Stevenson, III, taking the property in his place.

The opinion sets out what the Court deemed to be the pertinent provisions of the Will as follows:

ARTICLE III

I bequeath all my personal effects, household furnishings and other tangible personal property not otherwise disposed of too [sic] my son, GEORGE M. STEVENSON, JR., to be distributed as he, in his sole discretion, shall determine.

ARTICLE IV

I devise and bequeath the following described items of property to the following named beneficiaries:

A. To my daughter, HAZEL S. BRANCH, and my son-in-law, HOWELL W. BRANCH, the sum of $10,000.00 as a token of my appreciation and love for them.

B. To my son, GEORGE M. STEVENSON, JR., all of the cash I have remaining after the above specific requests and all death taxes and expenses are paid.

C. To my son, GEORGE M. STEVENSON, JR., and my grandson, GEORGE M. STEVENSON, III, in equal shares, all of the stocks and bonds and other securities which I own at the time of my death. This bequest is made to my son and grandson in consideration of their expenditures of time and money for my well- being and comfort.

D. To my son, GEORGE M. STEVENSON, JR., all of my farm equipment and machinery.

E. To my son, GEORGE M. STEVENSON, JR., all of my interest in the Dickerson-Baker farm in Martin County, North Carolina, in fee simple.


F. To my daughter, HAZEL S. BRANCH, for her lifetime only, all of my interest in the Johnson Farm in Martin County, North Carolina, and remainder to my granddaughter, BETSY BRANCH LEWIS, in fee simple.


G. To my daughter, HAZEL S. BRANCH, for her lifetime only, all my interest in the Adams Farm in Halifax County, North Carolina, and remainder to my grandson, WESLEY STEVENSON BRANCH, in fee simple. For a period of one (1) year following the date of my death, I direct that my son, GEORGE M. STEVENSON, JR., shall have the right to keep and maintain any livestock, electric fences and farming equipment in the same manner as existing at the time of my death....

ARTICLE V

All of the residue of the property which I may own at the time of my death, real or personal, tangible and intangible, of whatsoever nature and wheresoever situated, including all property which I may acquire or become entitled to after the execution of this will, including all lapsed legacies and devises, or other gifts made by this will which fail for any reason, I bequeath and devise in fee to my son, GEORGE M. STEVENSON, JR., and to my daughter, HAZEL S. BRANCH, in equal shares.

The opinion states that a "careful review of Articles III and IV of the Will reveals the testatrix granted specific legacies and devises to certain family members without stating what was to occur should any family member predecease her. Thereafter, in Article V, the testatrix provided that her residuary estate was to include ‘all lapsed legacies and devises, or other gifts made by this will which fail for any reason. . . .’ The inclusion of this language indicates that the testatrix contemplated that the legacies and devises granted in Articles III and IV could lapse and clearly demonstrates her intention that should a lapse occur, then the lapsed legacies or devises were to become part of her residuary estate." There should be little dispute over the accuracy of this statement. The problem stems from how word ‘lapse’ should be interpreted in this context. If the opinion is considered on appeal and determined to be in error, we believe that it went astray in incorrectly interpreting ‘lapse’. The Court concludes that to "to apply the anti-lapse statute would require us to presume the testatrix intended that should George Jr. predecease her, the bequests to him in Articles III and IV were to go to George III. We decline to make this presumption in light of (1) the specific language the testatrix used in Article V and (2) the lack of evidence indicating such a contingency in Articles III and IV."

To arrive at this conclusion the court cites the anti-lapse statute applicable at the death of the testatrix, N.C. Gen. Stat. § 31-42(a)(1999), as follows:

Unless the will indicates a contrary intent, if a devisee predeceases the testator, whether before or after the execution of the will, and if the devisee is a grandparent of or a descendant of a grandparent of the testator, then the issue of the predeceased devisee shall take in place of the deceased devisee.

The Court of Appeals correctly points out that our courts have "consistently recognized a duty ‘to render a will operative and to give effect to [a] testator's intent if reasonable interpretation can be given which is not in contravention of some established rule of law.’ NCNB v. Apple, 95 N.C. App. 606, 608, 383 S.E.2d 438, 440 (1989); see also Stephenson v. Rowe, 315 N.C. 330, 335, 338 S.E.2d 301, 304 (1986)(where a testator's intent is clearly expressed in plain and unambiguous language ‘the will is to be given effect according to its obvious intent’). Watson v. Smoker, 138 N.C. App. 158, 160, 530 S.E.2d 344, 346, disc. rev. denied, 352 N.C. 363, 544 S.E.2d 560 (2000)(quoting Price v. Price, 11 N.C. App. 657, 660, 182 S.E.2d 217, 219 (1971))." These principles should have been core to the resolution of this dispute." We agree, but it is our view that the Court misapplied them and incorrectly construed the intent of the testatrix.

The Court quotes Early v. Bowen, 116 N.C. App. 206, 210, 447 S.E.2d 167, 170 (1994), as follows, "[a] testator who desires to prevent lapse must express such intent or provide for substitution of another devisee in language sufficiently clear to indicate what person or persons testator intended to substitute for the legatee dying in his lifetime; otherwise, the anti-lapse statute applies." The Early court is quoting In re Will of Hubner, 106 N.C. App. 204, 416 S.E.2d 401, disc. review denied, 332 N.C. 148, 419 S.E.2d 572 (1992). The Hubner Court added the words "otherwise the anti-lapse statute applies" to a quote from Entwistle v. Covington, 250 N.C. 315, 318, 108 S.E.2d 603, 606 (1959), a case that involved heirs who were not qualified issue and the anti-lapse statute was not involved.

The paragraph in Early containing this quotation begins with the statement; "An antilapse statute should be liberally interpreted "with a view to attainment of its beneficent objective." In re Estate of Kerr, 433 F.2d 479, 483 (1970)." The following statement is also found in Early; "Had he intended the anti-lapse statute not to apply, he could have very easily shown such contrary intent, and it is not for this Court to do that for him." The quote cited by the court is derived from opinions that applied the anti-lapse statute consistently.

This opinion goes on to state that "the parties agree with the trial court's finding that ‘[t]he provisions of testatrix's will pertinent to this action are not ambiguous.’ Under Article V, the testatrix specifically stated the residue of her property was to include "all lapsed legacies and devises, or other gifts made by this will which fail for any reason." Generally, words used in a will which have a well-defined legal significance are ‘presumed to have been used in that sense, in the absence of evidence of a contrary intent.’ Clark v. Connor, 253 N.C. 515, 521, 117 S.E.2d 465, 468-69 (1960). A ‘lapsed’ legacy or devise has historically been defined by our courts as one where the legatee or devisee dies before the testator. See Smith v. Wiseman, 41 N.C. 540 (1850); Mebane v. Womack, 55 N.C. 293 (1855); Betts v. Parrish, 312 N.C. 47, 320 S.E.2d 662 (1984)."

The cases cited by the Court in support of these principles did not involve an issue of determining what a decedent meant in the use of the word ‘lapse’. Hubner, relied upon derivatively by this court, states that at "common law, gifts to deceased individuals lapsed. North Carolina's Anti-lapse Statute, N.C.G.S. § 31-42, prevents this common law result under certain circumstances. A devise to a deceased individual does not lapse (emphasis added) when the deceased devisee leaves surviving issue who would have been testator's heirs by intestate succession." The Early Court concludes; "…and thus, but for the provisions of the anti-lapse statute, their gifts lapsed". It is clearly well settled that the Court’s interpretation of the word ‘lapsed’ is incorrect. Lapsed bequests are only those devises that actually do lapse due the beneficiary predeceasing the testatrix without qualified issue and therefore, the statute is not applicable.

The inclusion of the phrase "including all lapsed legacies and devises" is in no way in conflict with the interpretation of the word ‘lapsed’ as evidenced in these opinions. If either of the testatrix’s children had died without issue, the bequest would have actually lapsed and passed under the residuary clause. Thus, the phrase is meaningful in its context in the residuary clause without negating the anti-lapse statute. Following well-settled principals of construction requires us to give each word its ordinary meaning and, where possible, give full effect to all words. Inclusion of the phrase in the residuary clause offers no real support for evidencing a clear intention to avoid the application of the anti-lapse statute.

Early also contains the following; "The primary object in interpreting a will is to give effect to the intention of the testator insofar as that intent does not conflict with the law or with public policy. Id.; Mitchell, supra. In ascertaining this intention, the language used and the sense in which it is used by the testator is the primary source of information, as it is the expressed intention of the testator which is sought. Wing v. Trust Co., 301 N.C. 456, 272 S.E.2d 90 (1980). The will is to be considered as a whole to ascertain the general plan and purpose of the testator, Clark v. Connor, 253 N.C. 515, 117 S.E.2d 465 (1960), and in determining the intent of the testator, greater regard must be given to the dominant purpose of the testator than to the use of any particular words. Little v. Trust Co.,252 N.C. 229, 113 S,E.2d 689 (1960). Generally, ordinary words are to be given their usual and ordinary meaning. Clark, supra. It is not sufficient that the same words in substance or even literally have been construed in other cases, as the same identical words often require very different constructions according to context and the peculiar circumstances of each case. Id".

Nonetheless, this Court states that "appellees contend the testatrix's inclusion of the phrase ‘including all lapsed legacies and devises’ was merely ‘boilerplate language’ and should not be interpreted as an expression of her intent to prevent an application of the anti-lapse statute. In support of their contention, appellees cite Blevins v. Moran, 12 S.W.3d 698 (Ky. Ct. App. 2000), in which the Kentucky Court of Appeals held that a will's residuary clause which included the phrase "[a]ll the rest, residue and remainder of my estate . . . including legacies and devises, if any, which may fail for any reason" did not, by itself, establish a testator's intent to avoid operation of its anti-lapse statute. However, the Court reached its conclusion based on its finding that the language used by the testator was ambiguous and its determination that the Kentucky Anti-Lapse Statute carried with it a "strong presumption against lapse." Id. at 703 (emphasis added)." The Courts response is to discusses three contrary opinions from other states and ignore the guidance of the decisions it cites.

The Court observes that a "careful review of Articles III and IV of the Will reveals the testatrix granted specific legacies and devises to certain family members without stating what was to occur should any family member predecease her. Thereafter, in Article V, the testatrix provided that her residuary estate was to include ‘all lapsed legacies and devises, or other gifts made by this will which fail for any reason. . . .’ The inclusion of this language indicates that the testatrix contemplated that the legacies and devises granted in Articles III and IV could lapse and clearly demonstrates her intention that should a lapse occur, then the lapsed legacies or devises were to become part of her residuary estate. To apply the anti-lapse statute would require us to presume the testatrix intended that should George Jr. predecease her, the bequests to him in Articles III and IV were to go to George III. We decline to make this presumption in light of (1) the specific language the testatrix used in Article V and (2) the lack of evidence indicating such a contingency in Articles III and IV."

We have addressed the first premise and find it unsupported in the law. The second is the very reason we have an anti-lapse statute. Paraphrasing this statement may reveal the fallacy of its logic. "Including or omitting language in a will that permits the anti-lapse statute to operate, evidences the decedent’s clear intention that it should not." This reasoning runs afoul of the purpose of the legislation. The common expectation in our society is that bequests to our children will devolve upon their children if they predecease us. The anti-lapse statute incorporates this presumption in every will unless the decedent has stated otherwise.

The Court has taken these erroneous assumptions and declared that they evidence a clear intent to avoid the effect of the anti-lapse statute. Yet, when one looks at the will in its entirety, the opposite conclusion is compelling. The testatrix divided her estate between her two children. To the daughter who had two children, she left two farms. Each farm was devised to the daughter for life with each grandchild to take a fee simple vested remainder in a single specified farm. A third farm, she left to her son outright. This son only had one child. Money and personal property was also divided. The Court chose to omit the following language when setting out the "pertinent" provisions of the will. "In the event my grandson GEORGE M. STEVENSON, III, and I shall die as a result of a common disaster or under circumstances in which it shall be impossible to determine the order of our deaths, then I direct that all bequests and devisees (sic) (emphasis added) to him shall instead pass to his wife SUSAN STEVENSON." Early also states that it "is also presumed that a will is executed in contemplation of applicable statutes." If so, this doctrine of construction supports the conclusion that the testatrix clearly intended George M. Stevenson, III to take a devise by virtue of the anti-lapse statute if the farm in the event his father predeceased the testatrix his grandmother. She clearly recognized that if her grandson predeceased her, his wife would be excluded by law if an express provision was not made for her under the will. It is reasonable to believe that she understood that the proper application of the anti-lapse statute would insure that her grandson would share in her real property. Under this Court’s interpretation of her intent, the word ‘devise’ is ignored and given no meaning. Taking the wording of the will in its entirety and her obvious plan of distribution, such an interpretation seems unreasonable. It may be well to point out that the devises to the daughter prevented her unilateral disposition of the property. Yet, if this decision stands, such will not be the case with respect to the farm devised to the son and given over to the daughter by this Court.

The Court concludes; "Accordingly, we conclude that, in Article V of her Will, the testatrix used sufficiently clear language to express her intent that the anti-lapse statute not apply to the legacies and devises which lapsed or failed for any reason. The judgment of the trial court is reversed and the case is remanded for proceedings consistent with this opinion." A clear intention prevent the application of the statute would have been simple to express. "E. To my son, GEORGE M. STEVENSON, JR., all of my interest in the Dickerson-Baker farm in Martin County, North Carolina, in fee simple. In the event that he predeceases me, to my daughter, HAZEL S. BRANCH in fee simple." Less clear is how a boilerplate residuary clause out of a will book becomes a clear expression of her intent to disinherit her grandson.