Does gift in Will fail?

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Does gift in Will fail?

Post by gardenlaw » Tue Aug 02, 2011 8:57 am

This is an interesting conundrum and shows how legislation designed to protect might change the normal rule:

"The usual rule is that if an asset which is the subject of a specific gift in a Will no longer forms part of the testator’s estate at his death (eg because of a sale of the asset during the testator’s lifetime) then the gift of that assets adeems ie fails.
However Mental Capacity Act 2005 Schedule 2 para 8 includes provisions to ensure this does not happen following a disposal of an asset by a deputy.
Para 8 reads as follows:

(1) Sub-paras (2) and (3) apply if

(a) P’s property has been disposed of by virtue of Section 18

(b) Under P’s Will any other person would have taken an interest in the property but for the disposal and

(c) On P’s death, any property belonging to P’s estate represents the property disposed of

(2) The person takes the same interest, if and so far as circumstances allow, on the property representing the property disposed of

(3) If the property disposed of was real property, any property representing it is to be treated, so long as it remains part of P’s estate, as if it were real property.

The para goes on to say that the court may give such directions is it deems appropriate for the purpose of facilitating the operation of the above sub-paras, including the carrying of money to a separate account.

Here I have a situation where a deputyship order was made under which the deputy was authorised to sell P’s property Blackacre on the best possible terms and after payment of legal fees etc to invest the net proceeds for P’s benefit. No further directions were made as to the net sale proceeds although the Court (but not the deputy) were aware of the provisions of P’s Will (as to which see below)

At the time the order was made P had two bank accounts (with over £30k) and Blackacre worth say £100k. Shortly after the order was made it was necessary to enter into a deferred payment arrangement with the Council to ensure the continued payment of care fees to the Care home in which P resided. The property then sold.and the net proceeds were paid over to the deputy who invested the same in one of the banks accounts. She subsequently transferred money to a third account. The deputy continued to pay P’s care fees from the original 2 accounts.

Almost a year following the sale P has died. Under her Will she left Blackacre to one of her children (A) and her residue to all of her children.
The monies in the Bank accounts now represent a figure less than the net proceeds of sale of Blackacre.

Does A get the lot? "

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