When it comes to avoiding ademption, there are a few rules that have been developed for such cases.
A simple way of avoiding ademption is to state gifts as general gifts as opposed to being specific gifts. This way, the court is much more likely to side with a beneficiary and compel the executor to purchase the gift for the beneficiary.
Another way that ademption is avoided is if a gift has changed in form but not in substance. This means that if a beneficiary was gifted money in Account A, but the testator transferred the money to Account B at another institution without changing the beneficiaries, then the money will still go to the initial beneficiary. However, if the money was withdrawn and used to purchase something like a COD, this would be categorized as having changed substance and would therefore be adeemed.
Ademption may also be avoided by using what is known as the outstanding balance doctrine. This is when there is a balance due to the testator after transfer from the sale of real or other property, as well as, proceeds due from insurance if the property was destroyed or otherwise damaged. These outstanding balances should go to the beneficiary.
Consult with a professional estate litigation Attorney when drafting your will or trust documents. They will know exactly how to use the appropriate language for avoiding ademptions.
*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.