6 minute read
In the process of the administration of the estate of our client’s late sister, a niche legal issue arose regarding the doctrine of Ademption.
Ademption occurs when a specific gift left in a will is subsequently disposed of (e.g. sold to another) by the Testator in their lifetime and therefore isn’t available to bequeath to the intended beneficiary, once the Testator dies. A testator is a person who created a will.
The Will appointed Daniel as Executor. Prior to her death, the deceased also created an Enduring Power of Attorney appointing him as her Attorney.
In her later years, the deceased entered a care home, and the Enduring Power of Attorney was registered when she no longer had sufficient capacity to manage her finances. The deceased had some funds to cover care costs but these were running down.
Therefore, Daniel, as Attorney, decided the best course of action was to sell the Property and use the sale proceeds to pay the ongoing care home charges. This meant that at the time of the deceased’s death, there was no house to gift to her beneficiaries – it had already been sold and the sale proceeds predominantly used up to fund the deceased’s care home charges.
If the house was sold by the deceased herself, whilst she still had capacity, then Ademption would have occurred and the specific gift of the house in the Will would have failed. However, the issue presenting itself here was that the house was not sold directly by the deceased, but instead was sold by her lawful Attorney in order to fund the deceased’s nursing home fees.
Marie-Anne McVeigh, the solicitor dealing with the administration of the estate, recognised the potential issue and immediately outlined the position to the client. She strongly recommended to our client that he should seek the directions of the Court and this is what he instructed us to do.
Court Directions were sought. A preliminary hearing was scheduled and following this, a further two hearings took place prior to the final hearing.
At the final hearing, the Master gave his directions.
The Court directed that there was no ademption and the remaining sale proceeds were to pass to the beneficiaries named in the will as the beneficiaries of the deceased’s house.. They were to receive what was left from the sale proceeds following the continuing payment of the nursing home fees.
This meant that the residuary estate was reduced by the sum to be given to the two beneficiaries which in turn meant that the numerous residuary beneficiaries received a lesser amount than initially thought.
If however, the Court had directed that ademption did occur, the residuary beneficiaries would have received a larger amount and the two beneficiaries who were bequeathed the property would not have received anything in lieu of the gift of the house.
In the circumstances, all of the residuary beneficiaries were content to accept the Court’s directions as this meant that the two beneficiaries received something in lieu of the house gift.
In this case, the stress was compounded as Daniel was under a great deal of pressure to try to do the right thing for all involved.
An Executor is under a strict duty to administer the estate correctly and as such our client wanted to ensure that he was doing the right thing by everyone concerned. The Ademption point was far from clear cut and technical points of law arose as a result of the specific circumstances of this case.
Seeking Court Directions was an important part of this process and it offered protection to our client.
If you are the Executor of a will and require legal advice on any aspect of this duty, we can help. Visit Administration of Estates to learn more about our services or Contact Us to arrange a free initial consultation with a solicitor.
The name referenced throughout this case study is a pseudonym that has been put in place to protect the client’s privacy.
