Canada: What Happens If A Gift Made In A Will Can't Take Effect?

Last Updated: November 11 2015
Article by Lauren Liang

In drafting a will, it is important to consider how future events may impact an estate plan. The concepts of lapse and ademption are two examples that demonstrate why this may be necessary.

When a gift lapses or adeems, the gift will no longer be passed to the named beneficiary because the gift has either failed or it no longer exists. This is usually due to some change in circumstances between the time the will was made and the time of death. In some cases, the result may be that gifts are distributed in a way that the will-maker did not contemplate and may not have wanted. However, with proper planning, it is usually possible to avoid lapsed or adeemed gifts and ensure that a will-maker's intentions can be followed.


A lapsed gift is a gift that cannot take effect, typically, but not exclusively, because the beneficiary has predeceased the will-maker. Section 46 of the Wills, Estates and Succession Act ("WESA")contains an "anti-lapse rule" which establishes a default scheme for determining alternative beneficiaries in the case of a lapsed gift.

Section 46 applies to all types of gifts, whether specific or residual. Under this section, if the will-maker has named an alternative beneficiary for a gift that has failed, the alternative beneficiary has the first priority to take the gift, whether the gift failed for a reason identified in the will or for any other reason. For example, assume a will-maker gifts his Nissan XL 2007 to friend A, and names friend B as an alternative beneficiary for the vehicle if friend A does not survive him. On the will-maker's death, friend A is alive, but friend A was a witness to the will-maker's signature on the will. Under WESA, a gift to a witness of the will is void. As a result, the gift of the vehicle to friend A fails. In the circumstances, friend B has the first priority to take the vehicle even though the gift failed for a reason not identified in the will.

If there was no alternative beneficiary of the gift named in the will, and the named beneficiary was either the brother, sister or a descendent of the will-maker, then the named beneficiary's descendants will be entitled to the failed gift. If the named beneficiary of the failed gift was not the brother, sister or a descendent of the will-maker, then the surviving residuary beneficiaries, if any, named in the will would be entitled to the failed gift in proportion to their interests.

This default scheme is subject to a contrary intention identified by the will-maker in the will.


Will-makers often make specific bequests of property, such as a car, piece of jewelry or money held in a specific bank account. These types of gifts can be problematic where the will was prepared years or even decades before the will-maker passed away and the assets of the will-maker have significantly changed. As a result, it is not uncommon for situations to arise where property gifted in a will is no longer owned by the will-maker at the time of their death. For instance, the property might have been sold, given away, destroyed, lost or simply consumed. In cases such as these, it is said that the gift has adeemed.

The general rule is that if the gift has adeemed, then the beneficiary of the gift is out of luck. However, it is not always easy to determine whether a gift has adeemed, as it may depend on the nature of the gift, description of the gift in the will, whether the property still partially exists in some form, and other factors. The issue of ademption often arises where a will-maker makes a gift of money or other financial assets held with a specified bank, and at the time of the will-maker's death, the gift no longer conforms to the exact description in the will because the assets have been moved or altered.

The issue of ademption was considered by the BC Court of Appeal in Wood Estate v. Arlotti-Wood, 2004 BCCA 556 ("Wood"). In this case, the will-maker directed his executor in his will "to pay any cash or transfer any stocks and bonds held in account no. 861-16199-1-0 located at RBC Dominion Securities, Vancouver, BC" to a group of beneficiaries. The will-maker subsequently moved the funds to another account with another bank where the funds were being held at the time of his death.

The BC Court of Appeal in Wood provided some general guidance on ademption. Firstly, the Court confirmed that in determining whether a gift has adeemed, it is irrelevant whether the will-maker intended for the gift to be adeemed. Secondly, the Court explained that ademption would not apply to a gift that had changed in name or form alone if the item remained substantially the same thing. In Wood, the Court found that the gift was comingled with other monies and "tracing" of the funds was no longer possible. Accordingly, since the gift had changed beyond just mere form or name, it was found that the gift had adeemed.

Ademption is a common law concept and is not outlined in a specific section of WESA. However, section 48 of WESA provides relief to a beneficiary where the subject of a specific bequest is disposed of by a "nominee" of the will-maker. The term "nominee" is defined to include a committee, an attorney under a power of attorney, or a representative under a representation agreement. Section 48 provides that a disposal of property by a nominee entitles the beneficiary to appropriate compensation which can include non-monetary consideration and fair market value of the gift. The relief provided in section 48 is not available if the disposition is made to carry out the will-maker's instructions when the will-maker was legally capable of giving instructions or if a contrary intention appears in the will.

Understanding the concepts of lapse and ademption can assist a will-maker in planning around unexpected changes to the beneficiaries of the will-maker's estate, or to the will-maker's assets. The will-maker may decide that the statutory scheme is acceptable or may wish to put appropriate alternatives or contingencies in their will. Ultimately, knowledge of these concepts helps ensure that the will-maker's estate will be distributed in accordance with his or her intentions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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