Failure of Gifts

Gift: A voluntary transfer of an interest in property by the owner (donor) to another (done)
without any consideration or compensation.

Conditions:
1. Must be a delivery of subject matter
2. intention by donor
3. acceptance by done.

Propertydisposable by will:
1. Immoveable: lex situs (S 27 Wills Act)
2. Moveable: lex domicile(S 28 Wills Act)
3. Property passing under a will: S 3 W.A

Property not disposable by will:

1. Not belonging to the testator
- Testator cannot transfer property that does not belong to him.
- For example, if the Testator is a trustee and has legal ownership over a property,
he cannot dispose it in his will as it doesn’t belong to him.
2. Choses in action
- Testator cannot transfer property that does not belong to him.
- For example, if the Testator is a trustee and has legal ownership over a property,
he cannot dispose it in his will as it doesn’t belong to him.
- Eg. Right to sue, life assurance, EPF, share in company
3. Insurance Policy
- Section 164 (2) of Insurance Act 1996 - A nomination shall not be revoked by a
will or by any other act, event or means.
- Eng Li Cheng Dolly v Lim Yeo Hua: The court held that the proceeds of an
insurance policy not specifically disposed of in the deceased's will, did not form
part of the assets of the deceased's estate and that the beneficiary named in such
policy was solely entitled to the proceeds of the policy. As the policy was taken
out during the marriage (between the deceased and the beneficiary) with the
object of creating a fund from which the beneficiary might benefit, she obtained
an immediate trust in her favour which was not defeated by their subsequent
divorce.
- Malaysian Assurance Alliance Bhd v Anthony Kulanthai Marie Joseph: This
statutory trust has been recognised by the Insurance Act 1996and also a statutory
trust can now be made under s 166 of that Act. The fact that the policy is vested
in the trustee for the benefit of the beneficiary does not mean that upon the death

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 of the insured the money is automatically held on trust by the appellant for the
benefit of the beneficiary as bare trustee.

Nomination ⁄ ×
Estate × ⁄

4. Company Shares
- Similarly, although shares held by the testator in a company incorporated
under the Companies Act 1965 vest on his death in his personal
representatives, he may have no right, or only a restricted right, to dispose of
them, for other shareholders may have the right to buy them from the personal
representatives.
5. EPF
- EPF does form a part of deceased estate. However, you can nominate
beneficiaries as nominees by virtue of Section 54(1)(a) of EPF Act 1991
- If there is a nomination, then it will not fall under the estate upon the death of
testator.
- If a nomination is made, a Will cannot override the earlier nomination, according
to the Employee Provident Fund Act 1991. However, if no earlier nomination is
made, then the distribution of your EPF savings will be in accordance to your
Will.
- Proviso in Regulation 7(2) if the Employees Provident Fund Regulations 2001: A
nomination cannot be revoked by any Will or by any other act, event or means.
Therefore, your EPF will be distributed in accordance to the nomination(s) you
have made upon registering for the EPF. In a situation where no nomination was
given, under Regulation 8, upon death of the EPF member, the Board shall pay
any amount standing to the applicant who produces the Grant of Probate, or Letter
of Administration, or Distribution Order accompanied with Form EPF 9(AHL),
subject to certain conditions
Nomination ⁄ ×
Estate × ⁄

Gift
Legacies & devices: described gifts of
property Legacy: gift/bequest of chattels
Device: land
Gift: equally acceptable
Basically gift can be classified into 5 categories: (i) Specific, (ii) General,(iii) Demonstrative,

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 (iv) Pecuniary, (v) Residuary

(i) Specific
S 2 PAA:
A gift of a particular item/group of items of property owned by the testator, distinguished in
the will from other property of the same kind.
Main characteristic: subject to the doctrine of ademption (ie. must be in existence at the time
of death).
Re Abdullah Saleh Shooker (decd): the executors applied to court for the determination of
whether interest was payable on a legacy under the will of the deceased.
Lim Soo Siam v Leow Yong Moey: Such legacy must be in existence at the time of the testator's
death; otherwise the terms of the gift have to be determined at the time when the will was
made. In the absence of specific instruction, the gift not in existence is said to be adeemed. It
was held that the legacy to the testator's daughter was partially adeemed during the testator's
lifetime to the extent that the testator's daughter's marriage expenses were paid by the testator
himself and that the balance of the legacy should be paid to her for her sole use.

(ii) General
A gift of property to be provided out of the testator’s estate whether of not the property so
described forms part of the testator’s estate upon his death. Usually takes in form of money
Soo Bian Joo v Soo Boon Leong: A general legacy is a gift arising from the general
personal estate of the testator and has no application to the distribution of property to the
persons entitled on an intestacy.
Shanti Rupchand Binwani alias Shanti v Udharam Dayaram Binwani: The construction of
the will of the deceased determines whether or not the gift is separate from the general personal
estate of the de-ceased.
Tan Boon Soo v Choa En Seng: A legacy which is in its nature general is not entitled to any
exemption from abatement on the ground that it is applied to any particular object or purpose.

(iii) Demonstrative
General in nature but directed to be paid out of a specific fund A demonstrative legacy consists
of a pecuniary legacy1 payable out of a named fund.
When a legacy is payable at a certain time, but is in terms contingent, the legacy becomes
vested when there is a direction to pay the interest in the meantime to the person to whom the
legacy is given.
It is a legacy comprising of money.
Re Sevatha Vappoo Maricar (decd): where the court held that the residuary legatees should
receive the gift in their character of residuary legatees.

(iv) Pecuniary

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 A gift of money - Usually general, but may be demonstrative or specific.

(v) Residuary
A gift of the testator’s remaining property. If there is no other gift is given, the gift of the
whole estate is a residuary gift.

Gifts by Will & Gift Inter Vivos

Gift by will: Transfer of interest by will with intention that it will be operativeafter the
donor’s death.
Whether can lapse? – Generally: beneficiary pre-deceases, divorce
Gift inter vivos: Is a legal term referring to a transfer or gift made duringone's lifetime, as
opposed to a testamentary transfer (a gift that takes effect on death) under the subject of trust.
Upon transfer of the property, the done shall assume right of possession &immediate use of
property (without waiting for the donor’s death)

Interest
Power of disposition by will: to the extent of creation/disposition of those interest to donee
( FAILURE OF INTEREST)which recognized by law.
A gift under a will may fail due to lack of interest/ failure of interest.
Eg: donee pre-deceased testator (S 19 WA), disclaimer,
ademption,etc

Failure of interest

Disclaimer
A gift in a will may be accepted of disclaimed.
Acceptance: accept by the donee: with all the benefits & burdens attached to it in accordance
with the law.
In general a disclaimer or renunciation of gifts or benefits under a will may be retracted if it is
made without consideration and if no one has altered his position on the faith of it.
Evans v Stratford:
- Disclaimer: Made by the person of sui juris
- Mode of disclaiming: informal acts, record, deed
- Effect: same portion as if no gift has been made, however not void the gift in regard
to all persons for all purpose.

Lapse
S 19 WA: Gift or bequests lapse and become void upon the death of devisee or legatee,
predeceasing the testator. Failure of a testamentary gift due to a situation where the donee

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 predeceases the testator.
GR: Donee must survive testator.
The term 'lapse' is usually applied to the failure of a testamentary gift arising owing to the
death of the devisee or legatee in the testator's lifetime, whether before or after the date of the
will.
Hutcheson v Hammond: As a rule, a devisee or legatee must survive the testator in order that
he or his estate may have the benefit of the gift, and a confirmation by codicil of a gift in a
will to a legatee who has died since the date of the will does not prevent a lapse.
Exception to lapse:
a. Gift to testator's issue
b. Alternative gifts
c. Future gifts

Ademption:
A specific gift will fail if the subject matter of the gift does not form part of the estate at
the time of death.
Example: the property is sold/ given away / destroyed.
Re Bridle: Where the nature of the property has changed, the first consideration, in deciding
whether a gift is adeemed, must always be the words used by the testator in describing or
dealing with the property bequeathed8. From the words of the particular will, the court may
find that the testator contemplated a change of investment, and that the thing bequeathed is the
property which for the time being represents the property which the testator formerly had. In
such a case the gift includes reinvestments into which the investment representing the gift can
be traced.
Lim Soo Siam v Leow Yong Moey & Ors: Whether the legacy of RM10,000 by the testator to
his daughter for marriage expenses was adeemed either in whole or part by his daughter’s
marriage during testator’s lifetime when the marriage expenses was RM9400. Court held that
the legacy was adeeemed and the balance was paid for her sole use.

Public policy
A gift / condition of a gift may be void as a whole / in part if it against public policy.

Insolvency & abatement

An estate is said to be insolvent if the assets of an estate are insufficient to pay for the
funeral, testamentary and administration expenses & debts.
If the estate is not large enough to pay all the debts and legacies, the legacies, i.e. be reduced,
i.e. abate.

Non-compliance with condition

A gift may be made as a conditional gift / limitations subject to rules restricting such

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 condition & gifts.
The condition attached must not conflict with certain recognized restrictions and should be
consistent with other provisions of the will.

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