Sometimes, a gift promised in a Will isn’t there when it’s time to distribute the estate. A property may have been sold, a bank account closed, or investments restructured. When this happens, the law calls it ademption — and the intended beneficiary may receive nothing.
It can occur for many reasons: a home sold to fund aged care, assets moved between accounts, or property transferred during life changes. Whatever the cause, the outcome can be unexpected and disappointing for families.
Read on to understand how ademption works under Queensland law, when exceptions apply, and how to prevent it from affecting your estate plan.
What Exactly Is Ademption?
Ademption occurs when a gift in a Will refers to a specific item that no longer exists when the Will-maker (testator) dies. Because the asset is gone, the gift fails.
For example, if a Will leaves “my Gold Coast beach house to my daughter,” but the house is later sold by their attorney to pay for aged care, the gift will usually fail because the property no longer exists in the estate.
However, timing also matters. If an asset was sold while the person still had capacity, ademption applies. If sold later by an attorney under a power of attorney, compensation rules may apply instead.
Assets Most at Risk
Ademption can affect almost any specific gift, but some assets are more vulnerable:
- Real estate: Homes, investments, and holiday properties often sold when downsizing or entering aged care.
- Personal items: Cars, jewellery, art, or furniture that may be sold or replaced over time.
- Shares and investments: Company restructures, mergers, or delistings that alter specific holdings.
- Bank accounts: A gift like “my Commonwealth Bank account ending in 1234” fails if that account is closed or merged.
Queensland’s Legal Framework
Queensland law recognises that ademption can be unfair when an attorney, rather than the testator (i.e., the Will-maker), disposes of an asset. Section 107 of the Powers of Attorney Act 1998 (Qld) allows a beneficiary to claim compensation from the estate if:
- The Will specifically mentioned the asset.
- The attorney sold or disposed of it.
- The disposal occurred while the attorney was acting under an enduring power of attorney.
If successful, the court may award compensation up to the asset’s value. However, strict time limits apply: beneficiaries must notify the executor within six months of death and file proceedings within nine months.
- Queensland law recognises that ademption can be unfair when an attorney, rather than the will-maker, disposes of an asset. This issue was highlighted in Re Amy Dorothea Viertel (1997) 1 Qd R 110, where the court held that no ademption occurred after attorneys sold the testator’s home while she lacked capacity. The decision exposed a gap in the law and later influenced section 107 of the Powers of Attorney Act 1998 (Qld), which allows a beneficiary to claim compensation from the estate if:
- The will specifically mentioned the asset.
- The attorney sold or disposed of it.
- The disposal occurred while the attorney was acting under an enduring power of attorney.
If successful, the court may award compensation up to the asset’s value. However, strict time limits apply: beneficiaries must notify the executor within 6 months of death and file proceedings within 9 months.
In 2019, the Guardianship and Administration and Other Legislation Amendment Act 2019 (Qld) introduced an important reform to preserve the intent of a Will.
If an attorney or administrator sells or otherwise deals with an asset specifically gifted in a Will while the testator lacks capacity, the gift does not automatically fail. The beneficiary is instead entitled to the same interest in any money or other property resulting from the sale as they would have had in the original asset.
This change ensures a testator’s wishes are respected, even when assets must be sold to fund care or manage finances during incapacity.
When Ademption Commonly Happens
- Aged care moves: Selling a home to fund accommodation and fees.
- Financial pressure: Medical costs, retirement expenses, or market losses prompting asset sales.
- Family law settlements: Divorce or property division, forcing sale or transfer.
- Business changes: Mergers or restructures altering shareholdings or partnerships.
These often occur before the will can be updated, leaving intended gifts unenforceable.
Exceptions and Protections
Not every asset change causes ademption. Courts consider substance over form:
- Account changes: Moving money between accounts under the same name may preserve the gift.
- Corporate restructures: If share ownership continues despite code or name changes, the gift may stand.
- Unauthorised sales: If someone sells property without authority, ademption may not apply, and the beneficiary could claim the proceeds.
- Loss of capacity: Sales during cognitive decline can prompt the court to take a sympathetic approach.
- Insurance proceeds: If an asset is destroyed and insurance pays out, the beneficiary may receive the payout if the Will allows it.
The Attorney’s Dilemma
Attorneys acting under an enduring power of attorney must prioritise the testator’s needs, even if that means selling assets named in the Will. This can cause conflict when the attorney is also a beneficiary.
Attorneys should act in good faith, keep detailed records, and seek legal advice before selling major assets. Selling to fund appropriate care is usually justified, but the impact on the estate should be documented.
Importantly, attorneys cannot “hold” sale proceeds for a beneficiary unless the Will or law allows it. The funds usually fall into the residuary estate, not to the person named in the original gift.
Reducing the Risk of Ademption
- Review your Will regularly. Update it whenever you buy or sell property, move into aged care, or experience major life changes.
- Use flexible wording. Instead of “my house at 10 Main Street,” use “my principal residence at the time of my death.”
- Consider percentage gifts. Leaving a share of the estate rather than specific assets ensures beneficiaries still receive something.
- Communicate with your attorney and executor. Explain your intentions so they understand your wishes if assets need to be sold.
- Consider trust structures. Testamentary trusts can provide flexibility and preserve your overall estate planning goals.
- Include a statement of wishes. Though not binding, it can guide your attorney and executor if circumstances change.
When Beneficiaries Miss Out
Discovering that a promised inheritance no longer exists can be upsetting. The first step is to find out what happened — when and why the asset was sold, and by whom.
If it was sold by an attorney under a power of attorney, compensation may be available under Section 107 of the Powers of Attorney Act 1998. Act quickly: missing the six- and nine-month deadlines can end your right to claim. Gather sale documents, bank statements, and correspondence, and seek legal advice immediately.
If ademption leaves you inadequately provided for, you may also consider a family provision claim. This doesn’t reverse ademption but may increase your overall entitlement from the estate.
Conclusion
Ademption can undo even the most thoughtful estate plan, but with regular updates, clear wording, and sound legal advice, it can be avoided. Regular legal reviews ensure your estate plan still reflects your actual assets and wishes.
Our expert Strathpine Wills and Estates Lawyers can help:
- Identify assets at risk of ademption.
- Draft flexible, future-proof Will clauses.
- Advise attorneys on responsible asset management.
- Support beneficiaries affected by failed gifts.
If you’re writing or updating your Will, acting as an attorney, or facing a lost inheritance, take early advice to protect your position. Call us today or send us a message.
