What is Ademption?

It is not surprising that you may have never heard of the word ‘Ademption’. Ademption occurs when property, which can be either personal or real estate gifted under a will is no longer in the will maker’s estate when they pass away.

For example, a particular property may be gifted to a beneficiary in the will but the property is subsequently sold during the will maker’s lifetime to fund the purchase of an accommodation bond for an aged care facility. As a result, the specific gift is said to be ‘adeemed’, meaning that the gift of the property to the beneficiary under the will fails and the beneficiary is also not entitled to receive the proceeds of the sale.

Exceptions to Ademption

The two common exceptions to ademption are where:

  • A specific gift does not adeem where the gift has only changed its name and not its substance. For example, money held in a particular bank account has been moved to another bank account; and
  • A will maker has an Enduring Power of Attorney and as a result of the Attorney’s dealings with an asset, the asset no longer exists.

Remedy under the Power of Attorney Act 1998

A beneficiary can apply for compensation against the estate if they have lost their benefit as a result of the Attorney’s dealings with the will maker’s property. Section 107 of the Powers of Attorney Act 1998 (Qld) (“the Act”) offers a remedy. It does not matter if the beneficiary who has missed out on their gift, is also the attorney who sold or disposed of the asset. The Court has discretion to order an appropriate amount of compensation. However, the compensation awarded cannot be an amount greater than that of the value of the lost gift.

A properly drafted will is imperative to ensure that your beneficiaries receive the gift you intended and can help avoid any costly litigation against your estate by a beneficiary following your death. It is also important that if you are an Attorney and need to sell an asset for a Principal that you seek appropriate legal advice before attending to the sale.

For more information on estate planning or if you would like to discuss your options if a gift to you under a will has failed please contact our Wills and Estates solicitors on (07) 3025 9000.

Our Queensland offices are in Brisbane, Logan, North Lakes, Ipswich, Toowoomba, Gold Coast, Sunshine Coast and Cairns.

Get to know our Wills and Estates solicitor

Jenna Hutchinson is employed as an Associate in Turner Freeman’s Brisbane office. Over the past 2 years, Jenna has worked exclusively in the area of Succession Law as this is where her passion lies.

Jenna always strives to do the best she can for her clients to ensure that their wishes are adhered to, as well as tries to achieve the best outcome for her clients if they have been unfairly left out of a Will. She is also experienced in defending the Estate against complex claims.