The will includes a gift of a specified amount of money, a specified named gift (eg watches) and then the testator leaves a specific gift to the spouse of “my personal possessions (personal chattels) not otherwise dealt with”. This is then followed by instruction for the distribution for the Residuary Estate.
In the likely event of there being insufficient value in the estate to provide for the pecuniary gifts I believe that the gift of watches and the gift of personal possessions proceed as these are still specific gifts (albeit different classes) and that these are are not liquidated to reduce the impact of abatement on the pecuniary gifts?
Assuming this is correct then I have a situation where the deceased made a car insurance claim before his death which resulted in a decision by the insurance company after his death to write the car off and make a cash payment. So the personal possession asset (“the car”) that was to have passed to the spouse now only exists as cash which is in the testator’s bank ie. estate and therefore goes towards abating the pecuniary gift.
My understanding is that with a specific legacy, the legatee is entitled to the specified asset in its condition at the time of the testator’s death.
Accordingly, the proceeds of the insurance claim in this instance would not pass to the legatee, but be applied as residue or to reduce the shortfall of the pecuniary legacies.
I recall that there may have been a case several years ago in which the judge expressed the view that if the deceased died and their death resulted in the car being written off, then the specific legatee of the car was entitled to the proceeds of the insurance claim, but they would be entitled to the scrap value only of the car if the deceased died as a consequence of the incident in which the vehicle was written off, and not the proceeds of any insurance claim…
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thank you Paul. A sensible and fair assessment as the car is no longer a tangible moveable asset. The damage to the car, insurance claim and damage inspection pre-dated the death by a few days but the resulting write off decision by the insurance company the car was communicated four days afterwards.