The short answer is no, as specific gifts in the Will may create significant problems for the executors and the beneficiaries.
Often a client will instruct me to prepare a Will in which they want to leave many specific gifts to their beneficiaries.
These specific gifts often include cash, jewellery, cars, paintings, other personal belongings, balances of bank accounts and even real property.
What happens to a gift of an item in a Will, small or big, if the will maker no longer owns the item at the time of their death? Usually, the gifts fail because the will maker has forgotten of the gift in the will and they have sold or gifted the item during their life or the items have been lost or broken.
To give you a better understanding of the issues here are several examples from my practice:
The will maker gave the contents of her home safe to her best friend. At the time of writing the Will the will maker and the friend knew there was $60,000 in cash kept in the safe and it was the will maker's intention to give the money in the safe to her friend. The will maker died several years later and the friend came to collect her gift. Unfortunately, some time earlier the will maker had moved the money from the safe into her bank account. The gift failed as the safe was empty and the friend was somewhat disappointed.
The will maker left the balance in 2 bank accounts, listing the account number, held at The Rural and Industries Bank of Western Australia to her 2 grandchildren. By the time the will maker died the bank had been renamed to the Bank of Western Australia. The account names and numbers have changed too. Unfortunately, the grandchildren missed on a generous gift left to them by their grandmother.
In another case the will maker sold a house, which she gifted to a beneficiary in her Will, to fund her retirement. The will maker never updated her Will. Understandably, the beneficiary was somewhat upset.
What is ademption?
The general principle is that the gift of a specific item in a Will fails, if the item is not owned by the will maker at the time of their death.
This is called ademption and it occurs when property (either personal or real) gifted under a Will is no longer in the will maker's estate when they die.
There is a presumption that if a specific gift of an item or property is no longer in the estate of the will maker, it was their intention that the beneficiary of the specific gift will not receive a replacement gift. Hence, ademption can lead to unfair or unexpected outcomes for the beneficiaries.
Unfair outcome for the children of the will maker
In their Will the will maker left the family home to their daughter and everything else to their son. The will maker sold their home before their death. What is the outcome after the will maker dies?
The daughter misses out and the son gets the whole estate.
The presumption is that when selling their property, the will maker should have been aware of the terms of their own Will and therefore must have had the intention to benefit only the son.
The matter gets even more complicated if the property was not sold by the will maker but by their enduring attorney. What happens if the attorney was unaware of the contents of the Will? What if the will maker lacked testamentary capacity and could not update their Will?
For added complexity, there is uncertainty within the legal profession in Western Australia as to whether an attorney or administrator of the will maker may receive a copy of that person's Will.
In 1997 the Supreme Court of Western Australia, in Re Hartigan recognised an exception to the ademption rule where property is disposed of by an enduring attorney.
However, to avoid the uncertainty associated with specific gifts it is advisable to reduce to a minimum the number of such specific gifts in your Will.
How to minimise the risk of a gift being adeemed?
If a client insists on leaving a specific gift in their Will and does not wish that gift to adeem should the item the subject of the gift be subsequently sold, the gift in the Will should be accompanied by the gift of the proceeds of the sale of that item to the same beneficiary.
If you wish to make specific gifts in your Will and for your beneficiaries to receive those gifts seek legal advice. Call Crystal Lawyers on 04211 45637.