Proper planning when drafting your will is important for a variety of reasons, but your responsibilities as a will-maker do not stop once your will is finalized. We often encourage clients to ensure that their wills are up to date for a number of reasons, two of which are the possibility of lapses in testamentary gifts as well as ademption of gifts.
A gift lapses when the beneficiary under a will predeceases the will-maker and is not able to receive their portion of the estate and the gift the will-maker intended for them. Consequently, the gift that has lapsed will be distributed firstly to the alternate beneficiary of the gift. If there is no alternate beneficiary of the lapsed gift, and the deceased beneficiary was the sibling or a descendant of the will-maker, the lapsed gift will be distributed to the deceased beneficiary’s descendants, and if they do not have any, to the surviving residuary beneficiaries, if any, in proportion to their interests under the will.
Therefore, we encourage our clients to think of alternate beneficiaries to name in their will. Without alternate beneficiaries, a gift could end up being distributed to a person that the will-maker would not have wished to receive the gift.
An ademption occurs when a will contains a specific gift (for example, a particular vehicle), but the will-maker has disposed of the specific gift before their death. Therefore, even though the will may state that a beneficiary is entitled to a specific gift, the gift has “adeemed” and it fails, meaning that the beneficiary does not get the gift.
The law is not entirely clear on ademption when it comes to money. BC courts have held that closing a bank account and transferring the funds in it to another bank account did not result in an ademption of the gift of the funds held in the original bank account. However, BC courts have also found that in a situation where the will-maker had transferred an investment account from one brokerage firm to another, the will-maker caused the subject matter of the gift to cease to conform to the description in the will and therefore, the gift had adeemed.
Ademption only occurs when the will-maker is the one disposing of the specific gift. The Wills, Estates and Succession Act provides that if a nominee (an attorney, representative, or committee) of the will-maker disposes of the subject matter of a gift while the will-maker is still alive, the would-be beneficiary is entitled to receive from the estate an amount equivalent to the proceeds of the gift, unless there is a contrary intention in the will or the disposition was made in accordance with the will-maker’s instructions to their nominee while the will-maker had capacity.
If you have any questions about your current will or if your will should to be updated, please contact one of our lawyers practicing in the area of wills and estates to discuss.
Author: Jane Otterstrom
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of estate planning and estate administration at the following:Jennette Vopicka: email@example.com Danielle (Dani) Brito: firstname.lastname@example.org Jane Otterstrom: email@example.com