- When a gift cannot take effect, the Wills and Succession Act sends it to an alternate beneficiary first, then descendants where the rules allow, then residuary beneficiaries, then intestacy.
- The descendant substitution applies only if the beneficiary who died first was a descendant of the testator.
- A gift that is void, contrary to law or disclaimed follows the same order.
Being told that your gift in a will has failed is upsetting, especially when you are not sure why. A gift can fail for different reasons. The person named may have died before the testator, the item may no longer exist, or the wording may be too unclear to carry out.
This article explains the plain-language idea behind a lapsed gift and who takes the property under the Alberta Wills and Succession Act. Where the result depends on the will or the facts, it says so.
This article covers the law of Alberta.
What lapse means in plain words
A gift lapses when it cannot take effect because the person meant to receive it is not there to do so. The usual example is a beneficiary who dies before the person who made the will. In Alberta, the Act does not simply let the gift disappear. It sets an order for who takes the property instead.
A different problem, sometimes called ademption, arises when the specific item left to you, such as a particular car or property, is no longer part of the estate. What happens then depends on the wording of the will and what happened to the item, so it is worth having a lawyer read the document.
Who gets the property instead
Section 32 of the Wills and Succession Act sets the order where a beneficiary died before the testator. Each step applies only if the one before it does not.
| Step | Who takes | Condition |
|---|---|---|
| 1 | The alternate beneficiary named in the will | The will names one |
| 2 | The dead beneficiary's descendants who survive the testator | No alternate, and the dead beneficiary was a descendant of the testator |
| 3 | The surviving residuary beneficiaries, in proportion to their interests | Neither of the first two steps applies |
| 4 | Distribution as if the testator had died intestate | Nobody above can take |
The descendant step is limited. A friend, sibling or charity who dies first does not pass the gift to their own children under that rule. The Act's order applies only where the will has no alternate beneficiary, so a named alternate takes first. Whether other wording in the will can change the order should be confirmed before anyone relies on it.
Other ways a gift can fail
The same order of substitution applies where a gift cannot take effect because it is void, contrary to law or disclaimed. A beneficiary who disclaims, meaning refuses the gift, therefore does not decide who gets it. The gift passes to the alternate beneficiary, then descendants where the descendant rule applies, then the residuary beneficiaries, then on intestacy.
Before anyone disclaims, get advice. The form and timing of a disclaimer, and its tax and creditor effects, should be confirmed with a lawyer or accountant. A beneficiary who is bankrupt should also know that an inheritance received before discharge can fall to the trustee in bankruptcy.
When the property was sold or the gift is unclear
If the item was sold or given away before death, or if the will's wording leaves doubt about what was meant, the answer turns on the document and the facts. A personal representative who is unsure can ask the court for directions on any matter of fact, law or discretion, and a trustee who follows the directions is discharged from the duty on that matter.
The personal representative must act in accordance with the will and distribute the estate as soon as practicable. If property is not disposed of by the will at all, the personal representative holds it as trustee for the people entitled on intestacy.
What to do next
- Ask the personal representative in writing why the gift is said to have failed.
- Get a copy of the will and check for an alternate beneficiary and for who the residuary beneficiaries are.
- Find out whether the beneficiary who died first was a descendant of the testator.
- Do not sign a disclaimer or release until you understand what it gives up.
- Speak with a lawyer if the reason for the failure is unclear or the amounts are significant.
Frequently asked questions
If a beneficiary dies first, do their children inherit?
Only in some cases. If there is no alternate beneficiary and the dead beneficiary was a descendant of the testator, the gift goes to that beneficiary's descendants who survive the testator. If the beneficiary was a friend, sibling or charity, that rule does not apply.
What if the will names a backup beneficiary?
A named alternate beneficiary takes first. The Act's order of substitution applies only where the will has no alternate beneficiary.
Who gets a gift that is disclaimed?
A disclaimed gift passes in the same order as a gift that lapses: the alternate beneficiary, then descendants where the beneficiary was a descendant of the testator, then the surviving residuary beneficiaries, then on intestacy. The procedure and effects of disclaiming should be confirmed with a lawyer first.
What if property is not covered by the will at all?
The personal representative is a trustee of property not disposed of by the will and holds it for the people entitled on intestacy. Who those people are depends on who survived the deceased, such as a spouse or partner, children or parents.
Sources
- Wills and Succession Act, SA 2010 c W-12.2, s. 32 — kings-printer.alberta.ca
- Estate Administration Act, SA 2014 c E-12.5, s. 5(1) — kings-printer.alberta.ca
- Trustee Act, SA 2022 c T-8.1, s. 82 — kings-printer.alberta.ca
- Bankruptcy and Insolvency Act, RSC 1985 c B-3, s. 67(1)(c) — Justice Laws (federal)
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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