Ademption

• Author: Jeffrey Lehman, Shirelle Phelps

Page 92

The failure of a gift of personal property?a bequest?or of real property?a devise?to be distributed according to the provisions of a decedent's will because the property no longer belongs to the testator at the time of his or her death or because the property has been substantially changed.

There are two types of ademption: by extinction and by satisfaction.

Extinction

Ademption by extinction occurs when a particular item of PERSONAL PROPERTY or specially designated real property is substantially changed or not part of the testator's estate when he or she dies. For example, a testator makes a will giving her farm to her nephew and a diamond watch to her niece. Before she dies, she sells the farm and loses the watch. The proceeds of the sale of the farm are traced to a bank account. After the testator's death, the nephew claims the proceeds from the sale and the niece claims that the executor of the estate should pay her the value of the diamond watch. Neither claim will be upheld. Once the farm is sold, the specific devise is adeemed by extinction. The proceeds from its sale are not its equivalent for inheritance purposes. In some states, however, if all of the proceeds had not yet been paid, the nephew would be entitled to receive the unpaid balance.

Since the testator no longer owns the diamond watch when she dies, that specific bequest is also adeemed by extinction.

Satisfaction

Ademption by satisfaction takes place when the testator, during his or her lifetime, gives to his or her heir all or a part of the gift he or she had intended to give by his or her will. It applies to both specific bequests and devises as well as to a general bequest or legacy payable from the general assets of the testator's estate. If the subject of the gift made while the testator is alive is the same as the subject of a provision of the will, many states presume that it is in place of the testamentary gift if there is a parent-child or grandparent-grandchild relationship. Otherwise, an ademption by satisfaction will not be found unless there is independent evidence, such as express statements or writings, that the testator intended this to occur. A...