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Losing a gift

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Where a person leaves a specific gift to a relative, friend or charity, but it is not properly described and cannot be identified, or the gift is not in existence at the date of death, the relative, friend or charity may well lose the gift. See our 'Gifts and beneficiaries' section for more information.

Uncertainty

A gift may fail for uncertainty if the property cannot be identified from the description in the Will. For example, if the testator (someone who makes a Will) gives the beneficiary 'a ring' and it is subsequently found that there are a number of rings and there is no description as to which ring has been given to the beneficiary. The gift will fail if it cannot be identified and will form part of the residue (what is left over) of the estate.

A gift may also fail if the beneficiary is not properly identified. This applies both to individuals and institutions.

Not meeting requirements

Where a gift is subject to a condition, it will not only fail if the beneficiary dies before the testator, but will also fail if the beneficiary dies after the testator but before fulfilling a specific condition. The most common situation that arises is where the testator leaves a gift to a child subject to the child reaching a particular age. If the child does not reach the specified age the gift will fail, unless it is protected by a substitutional clause leaving the gift to another person or persons (e.g. grandchildren).

Lapse

If the beneficiary of a gift dies before the testator the gift will lapse. In these circumstances, the general rule is that the gift falls into the residue and does not form part of the beneficiary's estate. If the gift is one of residue, the property passes under the intestacy rules (see 'Dying without a Will'), unless there is a substitutional gift in the Will. A gift will not lapse if the beneficiary can be shown to have survived the testator, for however short a period, unless inheritance is expressed as being conditional upon the beneficiary surviving the testator for a certain period of time.

If the deaths of the testator and beneficiary occur close together in time it is important to establish the order in which those deaths take place. If two people die together (for example, in an accident) and there is no evidence of the order of their deaths, the normal rule is that the younger is deemed to have survived the older.

There are exceptions to the normal rule. For example:

In England and Wales

The normal rule does not apply between spouses or civil partners if the older spouse/civil partner dies intestate. In this case, the presumption is that the younger spouse/civil partner did not survive the older. Further, an intestate's spouse/civil partner must survive the intestate by 28 days in order to benefit.

In Northern Ireland

In Northern Ireland, if the order of death cannot be satisfactorily determined, neither person is deemed to have survived the other. This means that neither of their estates can benefit from the other.

Where the normal rule applies, if the beneficiary is older than the testator, the gift will lapse. If the beneficiary is younger than the testator, the gift does not lapse, but falls into the beneficiary's estate.

There is a particular situation where a gift will not lapse even though the beneficiary dies, or is treated as dying, before the testator.

This is where the testator makes a gift to their child or a more distant descendant of theirs and that child or descendant dies before the testator leaving a child or children. If that child or those children are alive when the testator dies, the testator's gift will be treated as if it was a gift to that child or those children, so that the gift will not fail.

A testator can prevent this exception applying by making alternative arrangements in their Will.

Substitutional gifts

To prevent the lapse of a gift, it may be advisable to include a substitutional gift. This will be included in the Will to take effect if the original beneficiary dies before the testator. A typical example would be to leave a gift to a child and if the child dies before the testator then the grandchild will inherit the child's share. Alternatively, you may be quite happy that the gift, for example of a sum of money, falls into residue if the beneficiary dies before you, in which event, you would not include this in the Will.

To avoid a situation where it may be difficult to decide who died first, a clause can be inserted which makes the gift conditional on the beneficiary surviving the testator for a specified period (usually 28 days). Such a gift will fail if the beneficiary survives the testator but dies within the specified period. Once again, the testator should consider a substitutional gift in the event of the beneficiary dying within a short period of the testator.

Where a gift is left to two or more beneficiaries jointly, the gift will not lapse unless all these beneficiaries die before the testator. If, for example, one of two joint beneficiaries dies, the remaining beneficiary will take the whole gift.

However, if the wording in the gift indicates clearly that each beneficiary is to receive a specific share of the gift, if one of the beneficiaries dies, the surviving beneficiary will take their share and the other share will either fall into residue, be subject to the intestacy rules if it is a gift of a share of residue or if there is a substitutional gift, the substitute beneficiary will take that share.

Divorce/Civil partnership dissolution

If property or any interest in property is left to a spouse/civil partner and the parties divorce/dissolve their civil partnership after the making of the Will, the property or interest in property will not pass to the former spouse/civil partner, unless the Will provides otherwise. It is therefore important for a testator to consider this issue when preparing their Will.

A gift that is not yours to give

Where the gift is of specific property that the testator owns when he or she makes their Will and the testator disposes of that property during his or her lifetime, the gift will fail. This is because only that specific thing can be gifted. This is known as 'ademption' and the gift is said to be 'adeemed'. For example, the gift in the clause 'My yacht to my friend Natasha.' in the Will of a testator who sold the yacht a few months prior to his death for £30,000 is said to have been adeemed. Unlucky Natasha cannot claim the £30,000.

Where the gift is of property that the testator did not own at the time the Will was made, it will not be adeemed. The property that is the subject of the gift will need to be provided out of the testator's general estate; for example, if a testator makes a gift of 4,000 shares in a quoted company, the PRs of the estate will need to use money in the estate to purchase such shares, or sell other assets in the estate to raise money for this purpose.

The gift, however, even though it is not adeemed, may fail - for example, if (using the above example) the quoted company has ceased to exist by the time of the testator's death.

Problems also arise where the asset is not sold but has changed in nature. This happens most commonly with company shares. The company may have been taken over since the Will was made so that, on death, the testator owns the shares in a different company.

In each individual case it must be decided whether the asset has changed merely in name or form or whether it has changed in substance. Only if there has been a change in substance will the gift be lost. It is therefore extremely important in preparing the Will that a particular asset is clearly described and the testator must be aware of the risks should there be a substantial change in the asset.