Dear Mr. Premack: My mother was widowed a few years back and she
inherited all of my father’s assets. She owned a very lovely home and
promised that she would leave it to me, and did write into her Will that
the home was to pass only to me. About two years after she signed the Will
she needed to move to a nursing home, and my brother sold her house using
the power of attorney she had given to him. The money was put into an
account and about half of it was spent on the nursing home before she
recently died. What I want to know is whether I get the rest of the money
in that account because it came from the house, or since it is just money
it has to get split between me and my brother (the Will says the rest of
the assets, other than the house, are split between us). – N.C.
The legal word for your situation is “ademption”. The concept is that when
an item specifically devised in a Will has been disposed of or sold so it
no longer exists at the time of the Testator’s death, then the gift fails.
The item does not exist as part of the estate, so the heir does not
receive it. But the exact wording of the Will is the key. What if mom’s
Will said “I give my house at 123 Green Road to N.C.” but she sells it
before she dies? The general rule is that ademption applies, but that is
not the whole picture.
What if mom’s Will said “I give
whatever home I own when I die to N.C.”? When mom wrote the Will her house
was at 123 Green Road, but she later sold that house and purchased a new
house at 456 Blue Road. Since the new house is “whatever home I own” there
has been no ademption and N.C. gets the new house at 456 Blue Road.
What if mom’s Will said “I give the benefit of my house at 123 Green Road
to N.C.” but sells the house and carries a note from the buyer and a lien
against the house? Does N.C. get the note and lien, or has the gift
adeemed since mom sold the house? After all, a note and lien is not the
same as the actual house. Depending on the wording of the Will there can
be subtle ambiguity about exactly what N.C. is supposed to receive.
The courts look for the ambiguity to decide whether a devise is adeemed or
not. For instance, in the Lang v. SAAF case in 1999, the Will gave away
the “real property… in my estate… located on Prue Road.” The actual lots
on Prue Road were sold while the Will’s maker was still alive. After she
died, the heir claimed that she really meant “the real property
development on Prue Road” and that he should get the business enterprise
even though the land was sold. The appeals court recognized the ambiguity
and sent the case back to the trial court for more proceedings.
In the case of Bates v. Fuller, mom’s Will said that the “real estate
shall be sold,” the debts and taxes paid, and the “proceeds remaining”
passed to the children. The house was sold by mom’s agent while she was
still alive. The trial court ruled that since the house was no longer part
of the estate on the date of mom’s death, the gift adeemed. It was not
available for the Executor to sell and divide the funds; instead, there
were only bank deposits on the date of her death, and those deposits would
not pass to the children.
They appealed. The appeals court
decided that the gift in the Will was not the house itself, but was the
proceeds from its sale. It did not matter whether the Executor sold the
house or if it was sold before mom died. Either way, the proceeds still
existed, and the gift was not adeemed. The children got the money.
Your situation is somewhere in the middle of those two cases. In your
letter you do not describe exactly what your mother said in her Will; the
exact wording makes a huge difference. Still, the house was sold before
she died, and a court could rule that the gift is adeemed. On the other
hand, the proceeds from that sale are traceable to the account from which
her nursing home expenses were paid. You should consult with a probate
litigation specialist about the exact wording of her Will. Depending on
what it says, a court may agree that since proceeds were not mixed in with
the general estate you are entitled to receive them, or the court may rule
that ademption applies and you must split the funds with your brother.