Ademption: Leaving Gifts You No Longer Have
Ademption is a term used to describe a situation in which the will-maker (‘testator’) has left a gift to his/her beneficiaries which no longer exists. Although the idea of leaving something to a beneficiary that you no longer have seems absurd, it can be surprising how often this happens.
When Can This Occur?
Rather than being an exercise in forgetfulness, ademption can occur in a number of different ways, including the following circumstances:
- A gifted property has been sold before the testator’s death
- A gifted property has been stolen, lost or destroyed
- The gifted property has changed fundamentally in some way
The following case illustrates an example of ademption. A testator’s house was willed to his son but in the intervening time between writing his will and his death, the house was lost to a fire. Due to the specific nature of this gift, the testator’s son will now be left with much less than had originally been promised.
Situations like these can be a logistical nightmare for the distribution of a testator’s estate – as one or many beneficiaries will now be unfairly left with much less than the testator had previously intended. An unintended consequence for ademption may be a number of challenges to the will, which will often be a lengthy, complex and expensive process, and run the risk of straining relations between your beneficiaries. Therefore, it is extremely important for the testator to do what they can to mitigate against the possibility of ademption.
Some Tips to Avoid Ademption
The first and most obvious solution to avoiding ademption is simply to ensure that the will is as up to date as possible. Unfortunately, circumstances in life tend to change dramatically and without notice, and therefore keeping a will up to date may be much easier said than done.
The most pragmatic solution to keeping a will up to date is to consult with an estate specialist every time a significant event in your life happens – this may include acquisitions or sales of property, births or deaths of close friends and family members, and significant changes to your finances. An estate specialist will be able to make minor, inexpensive changes, or codicils, to your will to reflect these changes in circumstance.
Perhaps the best strategy to avoid ademption is changing the way in which the estate is gifted to beneficiaries. The use of percentages of the overall estate, as opposed to specific gifts, is the best way around this.
For example, rather than willing your son that house, it may be more cautious to calculate the overall value of the house in relation to your estate, and provide a figure in percentages instead. Doing this means that your son will still receive the intended proportion of your estate, and effectively nullifies the possibility of ademption in the event that something happens to that house.
As Always, Speak with Your Estate Specialist About Ademption
Keeping your will up to date and using percentages are two of many different ways to avoid ademptions of your estate. As with any concern regarding your estate, your estate specialist will be able to provide excellent advice on how best to preserve your estate so that your beneficiaries will ultimately be able to enjoy it with the least possible complication.
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