In this article Lauren Liang of Clark Wilson discusses the importance of an updated will when it comes to Gifts.
What happens if a specific gift you were promised under a will no longer exists at the time of the testator’s death? The short answer is the missing gift fails, and you may have no claim to an equivalent benefit from the estate. For example, if your father left you his Honda in his will and subsequently sold the Honda and bought a Mercedes, then you would no longer be entitled to the Honda. Nor would you be entitled to the Mercedes in its place. The same principle applies to real property. The result may seem harsh, but it is based on sound policy consideration.
The legal term describing this principle is “ademption”, the doctrine of which has long been the law throughout Canada. The policy underlying ademption is that people should have the freedom to deal with their property as they wish during their lifetime. If a gift is no longer part of the estate at the time of a testator’s death, then it is assumed that the gift has been revoked through the testator’s conduct.
That said, a testator can prevent the failure of a gift by addressing it specifically in the will. Using the same example above, if your father’s will stated that he wanted you to get the Honda, or any other car that he may acquire in substitute for the Honda, then you would have been entitled to the Mercedes.
This article serves as a reminder that it is always a good idea for people to review their will whenever circumstances change. Should circumstances change and a specific gift provided in a will no longer exists, the testator should make a new will or a codicil if he or she still intends to give the specific legacy to the named beneficiary.