Having a proper will in place not only provides you with the security in knowing that your estate will be distributed as you intended in the event of your death, but it can also give your loved one’s security in knowing that they might be looked after should you pass away. But what happens when a will stipulates that an individual will receive a piece of property, such as a house, but that property is no longer owned by the deceased when they die? Is the would-be beneficiary entitled to anything at all? This was recently discussed in a decision from the Court of Appeal of Newfoundland and Labrador.

Will leaves house to niece

The deceased had two nieces, “MH” and “KB”, who were both named as beneficiaries in her will. The will stipulated that KB would be bequeathed the deceased’s home, while MH would receive the remainder of the estate.

However, the deceased was diagnosed with dementia in 2007. Towards the end of that year she moved from her home into a private care home. She stayed in the care home until her death in 2011. While she was in the care home, KB and MH helped sell the home. They deposited the proceeds from the sale into the deceased’s bank account. At the time the deceased passed away, her estate consisted exclusively of cash held in her bank account.

Sister seeks payment equal to value of home

KB realized that she stood to receive nothing from the estate. Her and MH met with the estate’s executor, who advised the parties to get independent legal advice, but suggested that KB should receive a cash payout equal to the proceeds from the sale of the home ($145,780) with MH inheriting the remainder ($30,238). MH was not satisfied with that proposal, but the sisters met privately and agreed that MH would pay KB $40,000. They told the executor the estate could be released, but did not tell him the details of their arrangement.

Unfortunately for KB, MH never did pay her sister the $40,000. It was later renegotiated to $30,000, but that was not paid either. This led to the deterioration of the sisters’ relationship.

Is KB entitled to anything?

One of the issues before the Court of Appeal was whether KB was entitled to anything as a result of the home being sold, leaving her essentially cut out of the will. This type of situation is addressed by what is known as the law of ademption, which was summarized by the court as follows.

“The law of ademption provides that if the property which is the subject of a specific bequest in a will does not exist in a testator’s estate at the time of the testator’s death, the bequest adeems (or fails), and the intended beneficiary receives nothing in respect of that bequest.”

This case should serve as a reminder that if family members of loved ones are aware of how they are addressed in a will, it would serve all involved to take the time to revisit a will in the event that something like the sale of a home substantially changes how the estate will be distributed. Doing so can help avoid the cost of estate litigation as well as the deterioration of a family relationship as we saw here.

If you are considering filing an application to challenge a will, contact the estates lawyers at Derfel Estates Law before you proceed. We can help you determine whether you are eligible to bring such a claim, can help you understand your options and rights, and can represent you throughout the challenge process. Call us at 416-847-3580 or contact us online to schedule a consultation.