Business, Legal & Accounting Glossary
Ademption is the situation, where a property bequeathed to a person at the time of writing of a will, cannot be transferred to him or her upon the death of the will-maker (testator) because it is no longer belongs to the testator’s estate. Ademption may be a result of the destruction, loss, or sale of the bequest in the intervening period.
legal In the law of wills, Ademption is the determination of what happens when property left under a will is no longer in the testator’s estate when the testator dies.
The failure of a bequest of property in a will. The gift fails (is “adeemed”) because the person who made the will no longer own the property when he or she dies. Often this happens because the property has been sold, destroyed or given away to someone other than the beneficiary named in the will. A bequest may also be adeemed when the will-maker, while still living, gives the property to the intended beneficiary (called “ademption by satisfaction”). When a bequest is adeemed, the beneficiary named in the will is out of luck; he or she doesn’t get cash or a different item of property to replace the one that was described in the will. For example, Mark writes in his will, “I leave to Rob the family vehicle,” but then trades in his car in for a jet ski. When Mark dies, Rob will receive nothing. Frustrated beneficiaries may challenge an ademption in court, especially if the property was not clearly identified in the first place.
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.
Ademption, or ademption by extinction, is a common law doctrine used in the law of wills to determine what happens when property bequeathed under a will is no longer in the testator’s estate at the time of the testator’s death. For a devise of a specific item of property such property is considered “adeemed”, and the gift fails. For example, if a will bequeathed the testator’s car to a specific beneficiary, but the testator owned no car at the time of his or her death, the gift would be “adeemed” and the aforementioned beneficiary would receive no gift at all.
There are two types of ademption: by extinction and by satisfaction.
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.
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 father makes a will leaving his ski house to his daughter and $25,000 to his son. Before death, he gives the daughter the deed to the ski house and he gives the son $15,000 with which to complete medical school. After the father’s death, the daughter will get nothing, while the son will get $10,000.
After the son received the $15,000 from his father, there was an ademption by satisfaction of the general legacy of $25,000 to the extent of the size of the lifetime gift, $15,000. The son is entitled to receive the remaining $10,000 of the original general legacy. Since there was a parent-child relationship, there was no need for independent proof that the $15,000 gift was intended to adeem the gift under the will.
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This glossary post was last updated: 8th October, 2021 | 7 Views.