Ademption in Estate Planning

Overview

Ademption is a legal concept in estate planning that occurs when a specific gift or bequest mentioned in a will no longer exists or cannot be given to the beneficiary at the time of the testator's death. Simply put, if you promise someone a specific item in your will, but that item is no longer in your possession when you die, the gift "adeems" or fails.

Understanding Ademption by Extinction

What Happens

• The gift or property must be specifically identified in the will
• The property is no longer part of the estate at death
• The beneficiary typically receives nothing in place of the adeemed gift

Common Examples

1. Property Sale: Willing a house that was later sold
2. Lost Items: Willing jewelry that was lost or stolen
3. Changed Form: Willing stock in a company that merged or was acquired

Types of Ademption

1. Ademption by Extinction

• Occurs when the specific property no longer exists
• Most common form of ademption
• Example: Willing a car that was totaled before death

2. Ademption by Satisfaction

• Occurs when the gift is given during the testator's lifetime
• The gift is considered "satisfied" before death
• Example: Willing $10,000 but giving it while alive

Exceptions to Ademption

1. Insurance Proceeds

   • May replace the specific gift if property was insured

2. Sale Proceeds

   • Some jurisdictions allow beneficiaries to receive proceeds from sold items

3. Power of Attorney Actions

• Special rules may apply when property is sold by an agent

FAQ Section

Q: Can ademption be prevented?
A: Yes, through careful will drafting and regular updates to reflect current assets.

Q: What happens to the beneficiary of an adeemed gift?
A: Generally, they receive nothing unless the will provides an alternative gift.

Q: Does ademption apply to general gifts of money?
A: No, ademption typically only applies to specific gifts of property.

Q: Can a beneficiary challenge ademption?
A: Yes, but success usually requires proving the testator's contrary intent or that an exception applies.

Practical Considerations

1. Regular Will Updates

   • Review and update wills when major assets change
   • Consider adding alternative gifts

2. Clear Descriptions

   • Use precise language to identify specific gifts
   • Include contingency plans for valuable items

3. Documentation

• Keep records of property dispositions
• Document intentions regarding proceeds

Summary

Understanding ademption is crucial for both testators and beneficiaries in estate planning. It highlights the importance of:

• Regular will updates
• Clear asset documentation
• Consideration of alternative gifts
• Understanding how property changes affect bequests

The concept of ademption emphasizes the dynamic nature of estate planning and the need for ongoing attention to ensure testamentary wishes are fulfilled as intended.

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Related Terms

Synonyms:

• Extinction of gift
• Failure of bequest
• Lapse of legacy

Antonyms:

• Satisfaction of gift
• Abatement
• Advancement

Related Terms:

• Testator
• Beneficiary
• Bequest
• Legacy
• Specific gift
• General gift
• Residuary estate
• Probate
• Intestacy
• Power of attorney

These terms are closely associated with the concept of ademption in estate planning. They encompass the key parties involved (testator and beneficiary), the types of gifts and bequests, the legal processes surrounding wills and probate, and the various outcomes that can occur when a specific gift is no longer available.