Disposing of an asset after making a Will can have significant and unexpected consequences for an intended beneficiary. If you have made a specific gift of an asset to a particular beneficiary in your Will, such as your home, and that asset is later sold without your Will being updated, your beneficiary may miss out on receiving what could have been intended to be a significant portion of your estate.
In these circumstances, the rule of ademption usually applies and the intended gift fails, leaving a potentially disappointed beneficiary.
Even if you have no intention of disposing of an asset during your lifetime, a sale of an asset may occur under an Enduring Power of Attorney (EPA) or by an Administrator appointed under a Guardianship and Administration Decision by the Queensland Civil and Administrative Tribunal (QCAT). In those circumstances, if you have lost the necessary capacity to make decisions about your assets and finances, the consequences can be particularly unexpected, both for you and your intended beneficiary as the gift may have similarly failed as a result of ademption.
However, as part of recent legislative changes to the laws governing Attorneys under EPAs and Administrators appointed by QCAT, there may now be access to a legislative exception to ademption in circumstances where an asset is disposed of by an Attorney or Administrator in certain circumstances.
There can, however, still be unintended effects for your estate, so if you are disposing of an asset, or acquiring something new, speak with our team sooner rather than later about how this might impact your Will.