Gifts under a Will
Mary’s Will says “I give my home at 1 Bolsover Street, Rockhampton to my son John and the balance of my assets to my daughter Julie”. This is a clause we regularly see in Wills.
What happens if Mary’s home has to be sold during her lifetime to fund her moving in to Aged Care?
John will receive nothing from Mary’s estate, and Julie will receive all of Mary’s assets, including any funds refunded to Mary’s estate from the aged care facility upon Mary’s death.
Such an outcome is clearly not Mary’s intention. However, if Mary does not own the Bolsover Street home at the time of her death, the gift of that asset to John under the terms of Mary’s Will fails – it is impossible for Mary to give John an asset that she does not own. Further, there is no provision in Mary’s Will to substitute cash or other assets as John’s share of her estate in lieu of his receiving the Bolsover Street property.
The failure of specific gifts in a Will occurs when assets or other items of personal property are gifted in the terms of a Will to a particular beneficiary, and the deceased no longer owns that asset or item when they die.
The failure of that gift does not otherwise alter the terms of the Will, as a Will remains valid unless revoked by the Willmaker, either expressly or through marriage or divorce. And yet, people regularly buy, sell, gift and transfer assets without considering the effect of that dealing on the terms of their existing Will.
What should I do?
When making a specific gift of property under your Will, you must appreciate that the gift will likely fail if the property is sold or otherwise dealt with prior to you death. If this is the only asset you have given to the nominated beneficiary, that beneficiary may not inherit anything from your estate.
Finally, it is important that you review you Will whenever you sell or purchase property. This ensures that your Will accurately reflects your wishes in relation to the distribution of you assets to your nominated beneficiaries upon death.