Ademption is a word that 99.9% of my clients have never run across. It’s not a word you normally use (unless you work with lawyers). And so far, I’ve never had a consultation where the client had “ademption” in their list of things to ask about their will. However, after my clients have seen the first draft of their will, it’s almost guaranteed to be one of their questions. Unfortunately, even the description in your will is probably not enough to answer your questions. It’s just one of those things that the law hasn’t found a clearer way to explain. It’s what happens when you identify certain property in your will that you no longer own at the time of your death.
What is Ademption?
For those of you who like to look in the dictionary, ademption means:
the revocation of a gift in a will inferred from the disposal (as by sale) of the property by the maker of the will before he or she dies
It’s when you no longer have specific items at the time of your death. For example, let’s say you have a jet ski that you love to use in the summertime. In your will, you’ve identified your “2020 Sea Doo GTX Limited” should go to your son Adam who loves to come to visit you and ride it on the lake. Being the healthy person that you are, you live another 30 years. But in 2050 when you die, that 2020 jet ski is long gone.
What Happens to the Gift?
In this case, the gift to Adam is no longer enforceable under the will. Unfortunately for Adam, he also doesn’t get the value of the jet ski either. It doesn’t matter if the jet ski was sold or taken away for some other reason. However, if the jet ski was totaled and insurance paid out the value to the estate, some states allow Adam to collect that insurance money.
Another example that my clients often ask about after understanding ademption is what happens to gifts of money? For example, if you say “I give to Adam $10,000 from my Bank of America savings account.” But in 30 years, Bank of America has merged with 2 other banks and is now called “BoA-TD-Chase-Citi, LLC” and you still have a savings account with them. In that case, Adam still gets his $10,000.
Why Does It Matter?
After understanding ademption, the next question is “why does it matter?” It all depends on what your estate plan looks like. If you’re doing generalized gifts, then ademption may not affect you. You may just split your estate equally amongst your kids. This may not have be a concern to you.
But, if you look at your estate plan, you likely have an ademption clause. Because you never know what changes you may make to your estate plan in the future.
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If you’ve been considering a will, living wills or health care power of attorney and now realize you really need a full estate plan, or this is the first you are hearing of it and would like more information, call my office to set up a Legal Strategy Session and we can discuss if it is the best option for your situation – (877) AMAYERS.