This edition (#16) of the M2K Advisors Succession Planning Series unpacks a crucial piece of will-related planning: legacies. Specifically, it explains the difference between specific legacies, demonstrative legacies, ademption (extinction) of legacies, and the rules regarding refunds. Many people make assumptions about how property or money will be passed on after death, but unless the type of legacy is clearly defined and backed by law, intentions can fail. This blog gives a clear, structured view—through illustrations and legal definitions—of how legacies function under the Indian Succession Act. If you’re planning a will or likely to inherit one, knowing these concepts could make all the difference.
Specific Legacy
A legacy is any amount of money or property left to someone in a will. A specific legacy is when a particular, clearly distinguishable asset is bequeathed to someone.
In legal terms, a specific legacy means the testator has left a specified part of their property, set apart from the rest.
Illustrations
- A bequeaths to B, a diamond ring presented to A by his mother.
This is a specific legacy because the item is unique and clearly identified. - A bequeaths to B, a diamond ring.
This is not a specific legacy—it’s vague and not separated from other assets.
Even if the investment type is mentioned, it doesn’t always qualify as specific.
- A bequeaths to B, Rs. 10,000 of his property now invested in shares of X Ltd.
This is not a specific legacy because the amount is general, even if linked to an investment.
Likewise, if a bequest mentions a type of stock or bond but doesn’t name it specifically, it doesn’t qualify as a specific legacy.
A specific legacy continues to have unique legal treatment when passed on to more than one person.
If property is specifically bequeathed to two or more individuals in succession:
- The asset must be passed on in its existing form, even if its value decreases over time.
Illustration:
A leases a house for 20 years. At the time of his death, 15 years are left. He bequeaths the lease to B for life, then to C.
- B enjoys the property in the same state as A left it.
- If B lives 15 years, C gets nothing—but the legacy is still valid as written.
If the property is not specifically mentioned and multiple beneficiaries are named:
- The asset must be sold, and
- The proceeds must be invested as per High Court rules.
- The resulting income goes to the first beneficiary (for life), and the capital to the next.
Also, if there’s a shortage of assets in the estate:
- Specific legacies cannot be touched to pay for other, more general legacies.
Demonstrative Legacy
A demonstrative legacy is when a bequest specifies a particular fund or asset out of which the legacy is to be paid—but the item itself isn’t given.
Illustration:
- A gives B a ring from his mother (specific legacy), and
- Gives C Rs. 50,000 to be paid out of a debt due from W (demonstrative legacy)
In this example:
- The ring is an actual asset set aside.
- The Rs. 50,000 is not the debt itself, but to be drawn from it.
Now, if the debt fund is insufficient:
- The specific legacy is paid first
- Whatever remains is used to pay the demonstrative legacy
- Any shortfall is then pulled from the general assets of the estate
Illustration:
- A owes Rs. 1,500 from W.
- Rs. 1,000 is specifically given to B.
- Rs. 1,000 is to be paid to C out of the same debt.
- B gets Rs. 1,000, and
- C receives Rs. 500 from the remaining debt and Rs. 500 from the general estate.
Ademption of Legacy (Extinction of legacy)
Ademption means a legacy fails. It occurs when the item mentioned in the will no longer exists at the time of the testator’s death, or has been converted into something else.
However, demonstrative legacies are not adeemed just because the fund or property mentioned is gone. In that case, the amount is pulled from the general estate.
But specific legacies are more sensitive.
Illustrations:
- A leaves B his interest in life insurance policies.
If A redeems the policies while alive, the legacy is adeemed—it no longer exists. - A bequeaths to B a debt owed by C, worth Rs. 10,000.
If A collects Rs. 5,000 before dying, that portion is adeemed.
So, partial receipt by the testator extinguishes that portion of the legacy.
Ademption doesn’t happen just by naming a different asset—the asset itself must be missing, sold, given away, or already collected.
There are also exceptions where ademption does not occur.
1. Temporary Removal
If a specifically bequeathed item is temporarily moved—by fraud or for protection—it is still considered valid.
Illustration:
A bequeaths household goods located in his Chennai home to B.
The goods are temporarily moved due to fire. A dies before they are brought back.
This does not result in ademption.
2. Legal or Instrument-Based Change
If a specific asset changes due to law or another legal arrangement, the legacy remains valid.
Illustration:
A leaves all his 5% Govt. bonds to B.
The bonds are converted to 5% stock during A’s lifetime.
This is not considered ademption—the bequest is still valid in its new form.
The testator’s intent and the nature of the change determine whether a legacy stands or fails.
Refund of Legacy
Sometimes legacies are paid before all debts of the estate are known or settled. The law provides for refund scenarios.
1. Paid Under Court Order
If the executor/administrator pays a legacy as per a court order, and later finds there aren’t enough assets:
- They can ask the legatee to refund—but only up to their share
2. Voluntary Payment
If the executor voluntarily pays a legacy, and the estate proves insufficient later:
- They cannot recover the amount from the legatee
3. Unknown Debt Surfaces Later
If an executor has paid legacies but later discovers a debt (previously unknown), they can:
- Ask each legatee to refund proportionately
4. Creditors’ Right to Claim Refund
A creditor whose debt remains unpaid can:
- Ask a legatee (who already received payment) to refund the legacy,
Even if: - The executor acted under a court order or voluntarily
- The assets were or weren’t sufficient at the time of death
All such refunds are to be made without interest.
Succession Knowledge Series
This edition is one part of M2K Advisors’ full Succession Planning Series—crafted to simplify how Indian succession law actually works.
If you missed earlier editions, here’s a list you can explore:
- Introduction to Succession Planning
- Types of Succession in India
- Hindu Succession Act: An Introduction
- Rules of Intestate Succession – Male (Part I & II)
- Intestate Succession – Hindu Female
- Key Concepts in Hindu Succession Act
- Christian Succession Rules
- Indian Succession Act Overview
- Drafting a Will
- Probate, Letters of Administration
- Attestation & Revocation of Wills
- Bequests under a Will
- Contesting a Will
- Taxation of Trusts (I to IV)
- Other Laws Affecting Wills (Part I & II)
- Legacy under a Will
You can read them all on the M2K website:
🔗 https://www.m2kadvisors.com
