Estate Planning

"A Diamond is Forever?" - Lost Gifts and the Principle of Ademption

By Hull & Hull LLP

In keeping with the holiday season which has just ended, many of us can reflect on the gifts we received from family members and friends. Often, the sentimental attachment far exceeds the monetary value of the gift. To this end, a testator may make a specific bequest in her Will indicating that upon her demise, a valuable family heirloom is to be given to a close relative.

Interestingly, the question arises about what happens when the testator dies and the specific bequest is not found among the assets. Based on the principle of ademption, the gift is said to "adeem" or fail. In certain circumstances, however, the testamentary gift will not adeem. For example, ademption does not apply where it can be shown that the gift was intended to confer general economic benefit on the beneficiary. Secondly, the gift may not fail if the testator's intention was not to revoke the gift if it could not be found.

It is not surprising that the principle of ademption may cause bitter disagreements among once close family members. While this dispute can be resolved through counsel, the reality is that the testator would be appalled to know that her Will led to fragmentation of the family. While most of us do not want to envisage our own mortality, careful succession planning may eliminate family feuds and afford the testator the opportunity to explain her intentions to the rest of the family. A meaningful discussion with family members about succession planning may ultimately prevent protracted litigation.

Thanks and have a great day,

Allan Socken

Full post as published by Toronto Estate Law Blog on January 11, 2008 (boomark / email).