When dealing with executing a decedent's estate, you may come across an issue where property and assets bequeathed in the will are no longer in possession of the estate. This situation is known as an ademption.
For example, when Harry is at the height of his career he gifts his beautiful 20 room mansion in his will to his only daughter. However, the company goes out of business and Harry goes out of a job. He is forced to downsize and has to sell that mansion. Unfortunately, he passes away before changing his will. Now that gift of the mansion no longer exists within the estate and his daughter cannot receive it. Therefore, it becomes adeemed. This also applies if Harry willfully gifted an asset to someone other than the beneficiary while he was still alive. It would be presumed that his intent was to revoke that gift, even if the will had never been changed.
There is an exemption to ademption when general gifts, such as cash amounts, are made. If the amount of cash in the estate is not sufficient enough to satisfy the amount gifted, then the residual assets would need to be sold off in order to raise the money to satisfy the gift. General gifts are never adeemed.
Contact a professional Estate Administration Attorney for more information on how to fully satisfy the gift requirements of any estate.
*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.