Bequesting What You Don’t Have: Ademption
“Ademption occurs when the property which is the subject of a specific gift, although in existence at the date of the will, is not in the testator’s estate at his death. It may have been sold or given away by the testator, or it may have been lost, stolen or destroyed. In the absence of a statutory provision to the contrary, if a specific gift has adeemed, the beneficiary gets nothing.”
This explanation of ademption comes from Oosterhoff on Wills, 8th ed. (Toronto: Carswell, 2016) at 538, as quoted in Best v. Hendry, 2021 NLCA 43 (CanLII).
In Best, the issue of ademption was front and center. The testator left a will that provided that her house was to go to her niece Hendry, and the residue of her estate was to go to her niece Best. Many years after making the will, the testator developed dementia, and was moved from her home to a nursing home. Best applied to be her guardian, and proceeded to sell the home.
Upon the testator’s death, Best claimed that the gift of the house adeemed, and the proceeds of sale fell into the residue. The Newfoundland Court of Appeal agreed.
In Ontario, recourse to ss. 35.1 and 36 of the Substitute Decisions Act may have applied. Section 35.1(1) provides that a guardian shall not dispose of property that the guardian knows is subject to a specific testamentary gift in the incapable person’s will. Section 35.1(3) allows for the disposition of the property if it is necessary to comply with the guardian’s duties. However, s. 36 provides that the doctrine of ademption does not apply to such dispositions by the guardian, and that the beneficiary is entitled to receive from the residue of the estate the proceeds of disposition, without interest.
According to the decision in Best, only Ontario and B.C. have such anti-ademption legislation.
(Best also dealt with issues relating to a release initially signed by Best, the liability of the estate trustee to Best, and the right of the estate trustee to recover funds improperly paid to a beneficiary (Hendry). I will not address those here.)
This brings me to my favourite ademption joke. A testator went to a lawyer to prepare his will. He told the lawyer that he wanted to make a bequest of a house to his loving wife, a cottage to his two loving sons, and a Frisbee collection to his loving dog. When the lawyer reminded the testator that he did not have a house, a cottage or a Frisbee collection, the testator responded: “Well, that’s their problem. I’ll be dead by then.”
Have a great weekend.