Imagine a scenario where a woman gifted her cabin to her son in her will, but the cabin was sold prior to her death.
Is the son entitled to receive something else from her estate in substitution of the cabin?
Is he entitled to the monetary value of the cabin?
Unfortunately, in this scenario, the son would be out of luck. When a gift in a will no longer exists, the doctrine of ademption applies.
In other words, the gift fails, and no substitutions can be made.
What happens if property in a will was sold by a person's trustee before death?
Alberta’s Adult Guardianship and Trusteeship Act contains a special provision to protect beneficiaries when a trustee sells a specific gift in the testator’s will.
The trustee must obtain a court order authorizing the sale of property that has been left as a gift to someone in a will.
The court will also direct how the proceeds of the sold property are to be handled.
If a trustee disposes of property that was the subject of a specific gift in a will without obtaining a court order, the affected beneficiary will be able to apply to the court for compensation.
What happens if property in a will was sold by a person's attorney before death?
Keep in mind that a trustee is not the same as an attorney (named in a power of attorney).
If the testator has appointed someone to be their attorney and has expressly given them the power to sell property, it’s possible there won’t be any recourse for the affected beneficiary. In this case, we need to examine the power of attorney and the will to determine the testator’s intentions. If the attorney was selling the property for their own benefit, there may be grounds to challenge his or her actions.
As you can see, it is extremely important to include the appropriate clauses to both your will and enduring power of attorney to ensure your property goes to your intended beneficiaries!
At Pure Legal, we are happy to review estate planning documents to ensure they will meet your intended outcomes. Click here to start the conversation.