In the nuanced world of Estate Planning, understanding specific legal concepts is vital. Ademption, a term often overlooked, demands particular attention. Ademption refers to an intricate situation where a specific bequest in a will cannot be fulfilled since the asset no longer exists in the estate at the time of the testator's death.
Such a scenario is analogous to the instance of placing an order for a pepperoni pizza, paying for it, but later discovering that there is no pepperoni available. The issue at hand becomes one not of satisfaction, but of resolution and management.
Effectively navigating such unexpected occurrences in Estate Planning hinges upon a comprehensive understanding of these legal subtleties. Missteps or oversights can lead to nuanced legal tangles, potentially creating unforeseen hurdles in the execution of a will.
Deep diving into such areas of Estate Planning is not just about legal proficiency but also requires a strong acumen for foreseeing possible future scenarios and contingently planning for them.
What is Ademption?
Ademption occurs when a specific item or property mentioned in a will is no longer part of the estate at the time of their death. This can happen for various reasons, including:
Sale or Disposition: The testator may have sold or given away the specific property mentioned in the will before their passing.
Destruction: If the specified property is destroyed or no longer exists (e.g., a valuable antique), ademption occurs.
Change in Nature: Sometimes, the nature of the property may change significantly, rendering it different from what was originally intended in the will.
Altogether, ademption is a fancy legal term for when you had something in your will that you no longer have at the time of your death. It's one of those provisions that people usually have questions about when they read their will, but it's also likely a provision that you don't have to worry about if you aren't using specific bequests in your estate planning.
Types of Ademption
There are two primary ways that we encounter ademption when dealing with someone's will:
Ademption by Satisfaction: This occurs when the testator gives a beneficiary a gift during their lifetime that is intended to fulfill the bequest mentioned in the will. In such cases, the gift during the testator's lifetime satisfies the bequest, and no further distribution occurs upon the testator's death.
Ademption by Extinction: This happens when the specific property is no longer available at the time of the testator's death. In this case, the intended beneficiary typically receives nothing from that particular bequest.
For my clients, we more commonly encounter Ademption by Extinction, but it's important to also understand Ademption by Satisfaction as well.
Implications of Ademption
So what happens if you encounter ademption when creating your estate plan or if you are being asked to be the personal representative or executor for someone else's estate?
For Testators (The Person Making The Will): It's essential to regularly review and update your will to ensure that specific bequests align with your current assets and intentions. If you have specific bequests and you no longer own that property, it's a good opportunity to update the documents so that you don't have
For Beneficiaries: Beneficiaries should be aware of the possibility of ademption and understand how it might affect their inheritances.
Hopefully, you can see the importance of keeping your estate plan documents updated, especially when it comes to ademption of specific gifts you may have in your estate plan documents.
Do You Need an Estate Planning Attorney?
If you have questions about your will or the other documents in your estate plan, let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you to work with an estate planning attorney.