From time to time, testators (will makers) gift specific assets in their wills which later cannot be found at the date of death because they have been destroyed or disposed of. In such a situation, the gift will fail in that the intended beneficiary will receive nothing and the gift is said to have “adeemed”. The testator may include a substitute gift in the will to address the possibility that the particular asset may not be found at death. There are also limited situations set out by statute allowing substitution of property that was gifted and is not in the testator’s possession at death.
In DiMambro Estate v. DiMambro, 2002 CanLII 3653 (ON SC), the Deceased left by her will her Home and its contents to her grandchildren, “Samantha” and “Crescenzo”. She later signed an agreement to sell the Home along with certain personal property for $259,100.00 (the “Sale Agreement”). However, by letter of direction and a gift letter, the deceased stated that one hundred thousand dollars ($100,000) was to be given to Samantha and Crescenzo as downpayment towards the purchase of a home. The Deceased died before the closing date of the Agreement to sell the Home. Samantha and Crescenzo never completed the purchase of a home. When the Home was eventually sold, at issue was whether Samantha and Crescenzo were entitled to the proceeds of sale, along with its contents. The relevant statute provides that the beneficiary of a specific gift that adeems can receive the replacement property. The Court also concluded that the alleged gift of $100,000 was not perfected, in part because the deceased`s intention to give in this regard was not clear. It was therefore held that Samantha and Crescenzo are entitled to the same rights as the deceased with regard to the Home. Although they were not entitled to receive the Home itself because it is the subject of the Sale Agreement, they are entitled to receive the benefit of the deceased’s contractual rights under the Sale Agreement, that being the proceeds of sale of the Home.
Thus it is important for testators to not only consider what they wish to happen in the event a specific asset they wish to gift is not a part of their estate at their death, but also to update their estate inventory and estate plan regularly.
Please contact Andrea Kelly Law to review your assets as well as your wishes and intentions in case of your illness or death.