Interpretation of a will: even bank balances are „cash assets“ nowadays“
Modern payment methods primarily involve card payments. This modern form of payment also has implications for the interpretation of the term „Cash assets“ in a will, as the Oldenburg Higher Regional Court held in its judgement of 20 December 2023 (Ref.: 3 U 8/23) decided.
The judgment was based on the following facts:
At first instance before the Oldenburg Regional Court (Ref.: 4 O 1233/21) The claimant and the defendants, all of whom were children of the testator, were in dispute over the interpretation of the bequest in favour of the claimant contained in the notarised will. In this will, the testator had stipulated in favour of his daughter, the claimant, that she should receive one-third of his cash assets upon his death. The will did not contain a more precise description of what the testator had meant by „cash assets“. The testator’s estate included bank account balances totalling approximately EUR 152,000.00, co-operative shares worth EUR 3,000.00, securities holdings worth approximately EUR 34,000.00 and cash amounting to approximately EUR 2,000.00.
The claimant took the view that the term „cash assets“ in the will referred to the testator’s entire estate, whilst the defendants argued that „cash assets“ actually referred only to cash.
Nor was the notary, who had been summoned as a witness and before whom the testator had drawn up his will, able to clarify what the testator had actually meant by the term ‘cash assets’.
The Regional Court ruled that, based on the interpretation of the term ‘cash assets’, it was to be assumed that the testator had intended to bequeath one-third of his total capital assets to his daughter. It therefore ordered the defendants to pay a sum calculated on the basis not only of the cash and bank account assets but also of the co-operative shares and the assets held in custody.
The defendants lodged an appeal against this judgement, which was partially successful.
This is because the Higher Regional Court ruled that the interpretation of the testator’s intention extended only to the extent that, whilst he must have meant the existing account balance when referring to „cash assets“, this did not include cooperative shares and securities. This is because, nowadays, the common understanding of the term „cash“ has shifted to mean not only physical banknotes and coins but also money immediately available in a bank account, which can also be accessed via a card payment.
The Higher Regional Court therefore took the view that the testator must also have meant the money immediately available in an account when using the term „cash assets“.
According to the Higher Regional Court, however, securities and cooperative shares would only fall under the broader term „capital assets“.
However, the claimant had not been able to provide sufficient evidence that the testator had in fact intended the term „cash assets“ to include those securities and cooperative shares as well.
The notary, acting as a witness, was unable to state with certainty that the testator had in fact intended the securities and co-operative shares to form part of the bequest on a pro rata basis. He could only attest that the testator wished to divide his entire estate amongst the heirs – but this could also have meant that the co-operative shares and securities were intended solely for the benefit of the defendant. It was not possible to ascertain the testator’s precise intention.
When the will was drawn up, the notary had explicitly asked the testator about, amongst other things, shares; however, the testator had not responded to this question, so it cannot be concluded that the testator might have regarded shares as falling within the scope of „cash assets“.
Consequently, the witness was unable to provide sufficient information that could have established the testator’s true intentions.
Also, given that the testator had distributed property to his children during his lifetime by way of anticipated succession, it is not possible to determine the testator’s precise valuation of these specific properties, his total assets at that time, and thus also the precise distribution of his estate as intended by the testator, to be carried out by the court.
The Higher Regional Court’s examination of the testator’s presumed intention did not, therefore, go beyond the general and modern understanding of the term „cash assets“.
Practical note: As a testator, it is therefore advisable to set out provisions in a will that are as precisely worded as possible, leaving no room for interpretation but instead containing a clear allocation of assets that a third party can understand. Formulating such provisions is not always straightforward.
We’d be happy to advise you on Drawing up a will and can be contacted by email at willkommen@gwgl-hamburg.de or by telephone on 040/300 39 86-0 We’re here for you and look forward to hearing from you or reading your messages.