Ademption – After all, it`s the thought that counts
Written by Andrew Powell, Partner
What happens when a will promises that a specific asset goes to a beneficiary– but after the will-maker has died, it is discovered that the asset doesn’t exist?
For items of personal property, this is a common occurrence. For instance, a father may leave his watch to his son, but it is later discovered that he actually gave the watch to somebody else several years prior to his passing. In those circumstances, the gift is said to have “adeemed”, and is simply void, presumably much to the irritation of the son. The fact that the father, the will-maker, had made a decision to dispose of the property during his lifetime is deemed to be a revocation of the gift set out in his will.
The doctrine of ademption applies when any specific gift, at the time of the death of a will-maker, no longer exists, has ceased to conform to the description of it in the will, or has been wholly or partially destroyed or otherwise disposed of. The doctrine applies regardless of the testator’s intentions in this matter: Wood Estate v. Arlotti-Wood [2004] BCCA 556. Ademption has two potential outcomes, neither of which amount to pleasant news for a beneficiary. First, as in the case with the father’s watch, if money or property has been spent or given away, then obviously there is nothing left to give to the beneficiary and the gift fails completely. Second, even if the money or property has only been altered – provided it has been altered so much that it no longer meets its description in the will – then the gift may also have adeemed. In the latter case whatever is left of the gift, in whatever form it is in, will form part of the residue of the deceased’s estate. The beneficiary it was intended for may get nothing, other than the warm feeling that they were mentioned in a will.
Trouble, and disputes, can arise when a gift identified in the will has not been completely altered or destroyed, but has only changed somewhat. For instance, a particular investment account may have been willed to a beneficiary, but in the time that passes between the will being written and the estate being administered, that investment account may have been diminished, added to, moved, or combined with other accounts.
The Courts have found that, if funds can be traced, then the gift will not necessarily fail just because it no longer exists in the precise form it had when the will was written. For instance, if a bank account has been closed, and the funds moved to another institution, the Court may overlook the fact that the particular asset described in the will (ie, the original bank account) no longer exists, because the intention of the testator was clearly to make a gift of the contents of that bank account, and those contents are still ascertainable and are substantially the same as the thing described. The same type of analysis can apply if a deceased person had described a certain asset which was later liquidated by the deceased – provided that the proceeds of that liquidation were kept distinct and separate from the rest of the deceased’s assets while the deceased was still alive.
But, in cases where money has been mingled with other money, and those combined monies are drawn down by the Deceased during his or her lifetime, then there has been an “appropriation” of the whole amount without differentiation, and the co-mingled monies are all subject to ademption: Wood Estate (supra); Re Stevens [1946] 4 D.L.R. 322 (NSSC).
When disputes of this nature arise, it can be important to determine whether the gift in the will was “specific” (in which case, if the specific description no longer applies, the gift would fail), or “general” (for example, a gift of money regardless of its source, which would never fail provided there is enough money to cover it from somewhere in the estate).
Under section 59 of the Wills, Estates and Succession Act, in British Columbia it is possible to apply to rectify wills in some circumstances, including when the will fails to carry out the will-maker’s intentions. Where there is the threat of ademption, it may be that this section can provide the will’s beneficiary with a remedy, providing it can be proven that the will-maker’s genuine intention to provide a gift to a beneficiary is being frustrated by an overly restrictive, technical, or outdated description of the asset.
