In a recent Alberta case, the court considered whether a gift of a commercial property should adeem as the testator did not personally own the property.    The testator left a valid September 26, 2017 last will and testament. In her Will, she gifts a commercial property equally to her three grandchildren and her two great-grandchildren (the “Grandchildren“). The Will states “that all land and buildings” of a commercial property’s address (the “Commercial Property“) would go to the Grandchildren. However, the Commercial Property was owned by a numbered company, and not the testator personally. Her Will did not specifically dispose of the numbered company’s shares.

The testator owned all the shares of the numbered company and the Commercial Property was the only significant asset of the numbered company. All the parties agreed that the testator’s intention was to leave the Commercial Property to her Grandchildren. However, the estate’s personal representative/estate trustee, who was the testator’s daughter, was also the residual beneficiary of the estate.  She took the position that the gift of the Commercial Property fails and the shares of numbered company falls into the estate’s residue. As an asset of the numbered company, the Commercial Property belonged to her as sole residual beneficiary.

The Grandchildren’s position was that while the shares were not specifically distributed to them in the Will, the testator’s intention was clear and the Commercial Property should be transferred to them.  The Court had to decide whether the testator’s intention to gift the Commercial Property to her Grandchildren overrode the strict interpretation of the Will.

The Court agreed that the testator’s intention was clear. And while, it was a well-established principle that corporate assets belonged to the corporation and not the testator, the testator’s clear instructional language made her intentions obvious.  As such, title to the Commercial Property passed to the Grandchildren subject to the terms set out in the Will and any other corporate assets of the numbered company would fall into the estate’s residue.

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