Legacies – General or Specific

Legacies

Re Wood Estate 2004 BCCA 556, contains a good discussion on the differences between general and specific bequests, aka legacies.

There are generally two classes of legacies — specific and general.

Halsbury’s Laws of England (4th ed. 1998) describes the categories as follows:

A specific legacy must be of some thing or of some interest, legal or equitable, forming part of the testator’s estate; it must be a part as distinguished from the whole of his personal property or from the whole of the general residue of his personal estate; it must be identified by a sufficient description, and separated in favour of the particular legatee from the general mass of the testator’s personal estate. . . .

A general legacy may or may not be part of the testator’s property: it has no reference to the actual state of his property, and is a gift of something which, if the testator leaves sufficient assets, must be raised by his executors out of his general personal estate. Whether or not a particular thing forms part of the testator’s personal estate is a pure question of fact; so long as it is the testator’s at his death it is capable of being specifically bequeathed. Whether or not it has been separated from the general personal estate depends upon the true construction of the will. In the case of real estate a devise, whether of a specific property or by way of residue, is specific. [Vol. 17, paras. 1228-9; emphasis added.]
J.B. Clark and J.G.R. Martyn, the authors of Theobald on Wills (15th ed., 1993), explain the distinction in a similar way:
A general legacy is a legacy, not of any particular thing, but of something which is to be provided out of the testator’s general estate, for instance: “I give £100 to X”; or, “I give £1,000 3 per cent. War Loan to X.” The executors’ obligation is to provide the property given for the legatee and it is irrelevant whether it formed part of the testator’s assets at his death. On the other hand, a specific legacy is a gift of a severed or distinguished part of the testator’s property, thus showing an intention that the property shall pass to the legatee in specie. For instance: “I give my dwellinghouse, Blackacre, to X”; or “I give my silver teaspoons to X.” The severance must be done by the testator, not by some analysis in a court of equity. . . . A specific legacy does not abate until after the general legacies are exhausted, but it is liable to ademption by the testator in his lifetime. The court leans against holding legacies to be specific. [at 243-44; emphasis added.]

Accordingly, a gift of “my grandfather’s gold watch” or of “the shares of XYZ Ltd. now standing in my name” is a specific one, but a gift of “a gold watch” or of “$10,000 worth of shares of XYZ Ltd” is likely to be a general one which must be paid out of the testator’s personal estate if he or she does not own a gold watch or such shares at the date of death. (R. Jennings, ed., Jarman on Wills (8th ed., 1951), at 1037-38.)
[12] Although the third category, demonstrative legacies, was traditionally seen as a sub-category of general legacies (see Jarman, at 1043-44), more modern texts treat these as a kind of hybrid. As Clark and Martyn note, a demonstrative legacy

is by its nature a general legacy, usually pecuniary, directed to be satisfied primarily (but not solely) out of a specified fund or a specified part of the testator’s property. The authors give as an example a gift of “£100 to be raised out of the sale of my Surrey properties.” {Theobald, at 24 4-4 5.) A gift of this kind will not be adeemed even if the proceeds of the Surrey properties cease to exist or to be identifiable prior to the testator’s death. Feeney also notes that such legacies are:

. . . in the nature of a pecuniary and general legacy, except that the will indicates a particular fund out of which it is to be primarily paid. However, if the will shows that the legacy is to be paid out of a particular fund, and that fund only, it is then a specific legacy and is subject to ademption. [§15.8; emphasis added.]
[13] In the case at bar, of course, the gift was of “any cash or any stocks and bonds” held in the RBC account. It is not possible to say that a given amount was to be paid “primarily but not solely” out of the account. Arguably as well, the phrases “any cash” and “any stocks and bonds”, which {counsel agreed) may in this context be equated with “all cash and all stocks and bonds held at the date of my death”, indicate that the gift referred specifically to whatever was being held in the RBC account at the time of the testator’s death — again, not to something to be paid or transferred out of the account. (See Jarman, at 1053.) In my view, then, the gift in clause 3(a) (v) could not be said to be a demonstrative one. Rather, it was a specific legacy — a gift in specie of the actual contents of the account, identifiable not by sum or numbers of shares but only by the broker’s name (RBC) and account number mentioned in the will. Without these “identifiers”, one could not say how much cash or which stocks and bonds Mr. Wood intended to bequeath to his children.
[14] Being a specific legacy, the gift will be adeemed by conversion if the property has “ceased to exist as part of the testator’s property in his lifetime” (Jarman, at 1065) or has ceased to conform to the description in the will (Feeney, at §15.2). Applying this principle to the case at bar, it is clear that in transferring his cash, stocks and bonds from RBC account number 861-16199-1-0 in Vancouver to a different account at Midland in Nanaimo, Mr. Wood caused the subject-matter of the gift to cease to conform to the description of it in the will. Whether he intended for the gift to be adeemed is not relevant: the doctrine applies “irrespective of the testator’s intentions.” (Hurzln v. Neumeyer Estate (1990) 69 D.L.R. (4th) 18 (B.C.C.A.), at 22; Jarman, at 1065.) On this point, I agree with counsel for the appellant that to the extent the Chambers judge below may have considered evidence of the testator’s family situation and other “surrounding circumstances” to decide whether Mr. Wood intended the gift to fail, he was in error.

[15] As noted earlier, however, ademption will not occur where the specific property in question has been changed “in name or form only” so that it “exists as substantially the same thing, although in a different shape.” (Halsbury, supra, vol. 50 at para. 394, citing Oakes v. Oakes (1852) 9 Hare 666 at 672, approved in In re Slater [1907] 1 Ch. 665 at 672 (C.A.).) Whether the change is one in name or form only is a question of fact: In re Jameson [1908] 2 Ch. Ill at 115; Feeney, at §15.27.

Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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