Ademption

Question 1

what gifts does this apply to?

Answer 1

applies to specific gifts only

Question 2

when does a gift adeem?

Answer 2

a gift adeems (i.e. fails) if T no longer owns it at death

Question 3

will a gift adeem if T still owns the gift but it has changed in nature? give an example

Answer 3

Change in substance (i.e. fundamentally altered) = gift adeems

Change in name/form = gift will not adeem

e.g. specific legacy of shares in a named company. The company changed its name and subdivided its shares. Held gift was not adeemed - subject matter was the same, just the name and form had changed

Question 4

what happens if T gifts an asset, disposes of it and replaces it with a new one that matches the description?

Answer 4

case law has held that the gift will adeem because it is presumed T intended to gift asset owned at execution

However, if the gift is capable of increase/decrease i.e. ‘my cars’, ‘my jewellery’ it is presumed T meant items owned at death and the gift will not adeem

Question 5

if a gift adeems, does T have entitlement to any other property?

Answer 5

D has no right to a replacement/compensation unless the Will provides for substitution/compensation

Question 6

what can T do to avoid ademption?

Answer 6

draft the Will to reflect they intend to gift property owned at death i.e. i.e. ‘my main residence at the date of death’

Question 7

explain the effect of a codicil in this situation and give an example

Answer 7

If a codicil is published, this republishes the Will so gifts take effect from the republication date

i.e. in 2003 John gives Sam a gold watch in his Will. John loses this watch. Sam would not receive anything when John dies. However, if John brought a new gold watch and then executed a codicil, Sam would then inherit the new gold watch.