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Ademption: You Can’t Give What You Don’t Have

Ademption: You Can’t Give What You Don’t Have
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It is a natural desire and a part of life to want to pass down what we own to those we love when we pass away. The law enshrines this desire in the law of wills, which allows individuals to specify when, what, and how our friends and family receive certain gifts from us upon our deaths. But what happens if you leave something to someone in your will, and by the time you die that gift is no longer a part of your estate? This is covered by the doctrine of ademption.

What is Ademption?

Ademption is a doctrine based on a very simple, logical fact: you cannot give a gift of property by will if you do not actually own that property. As much as you might like to leave your son a 50-story skyscraper or a successful restaurant, you can’t (unless you actually do own those things!). The same goes for things that you actually did own at one point, but no longer did at the time of your death. It may seem unlikely that this would ever come up in real life – somebody trying to bequeath something they don’t own – but it absolutely happens.

Consider the following example: You own a piece of real property, called Greenacre, that you want your daughter to have upon your death. To this end, you have a real estate lawyer draft a will in which you devise Greenacre to your daughter in fee simple absolute. However, twenty years later, while you are still alive, you sell Greenacre to settle a debt. Ten years after that, you die without having updated your original will, so it still states that Greenacre goes to your daughter – will she get the property? The answer is no, because when you sold Greenacre to a third party during your life, the testamentary gift to your daughter was adeemed.

Ademption is a fairly common sense principle in most cases. In the example above, it would not be equitable to give the property to your daughter after it was sold to a bona fide purchaser in good faith. Ademption is also intuitive in instances where the property was destroyed. You cannot give a gift of a house that burned down and was never rebuilt. Ademption also covers cases where you give a gift to its intended beneficiary before you die.

However, there are other situations in which the doctrine of ademption seems overly harsh. For example, imagine that you wanted your son to get your car when you passed away, so you included a provision in your will by which you leave “my Mercedes Benz to my dearest son.” By the time you die, though, you have sold your Mercedes Benz and switched to driving a Bentley. Does your son get the Bentley? Under the traditional rules of ademption, no. Your will provided for the bequest of a Mercedes Benz, which you no longer own, not a Bentley. Therefore, your son would get nothing despite your obvious intention that he receive whatever car you drove at the time of your death.

How Courts Apply the Doctrine of Ademption

The traditional approach to ademption discussed above is usually referred to as the identity theory of ademption. This is the majority theory in America, so if you bequeath a Mercedes Benz but only own a Bentley when you die, your beneficiary will receive nothing. In order to avoid this result, be certain that your attorney drafts your will in such a way that the threat of ademption is minimized. For example, your will should say something like “I bequeath to my only son whatever cars I own at the time of my death.”

A second, more forgiving theory of ademption is the intent theory. This theory permits the presentation of evidence demonstrating that ademption of the gift would run counter to the testator’s sincere intent. Under this theory, your son may be able to receive your Bentley if there is sufficient evidence that you just wanted him to have your car, or at the very least he will receive a cash gift equal to the value of the Mercedes Benz you expressly left him.

Ways to Avoid Ademption

Courts in some jurisdictions have begun to recognize the occasionally harsh results of the doctrine of ademption and have therefore established rules for avoiding it. One method of avoidance is the bequest of general gifts. If a gift given is sufficiently proven to be general, the estate’s executor must acquire the gift and deliver it to the devisee. Another exception to ademption is the change of a gifts form but not its substance. For example, the gift of an account for $100,000 in a Bank of America account is not adeemed if the same $100,000 is transferred to CitiBank prior to the testator’s death. There are some other ways of avoiding ademption that can be put in place by a clever real estate or estate planning attorney.

Conclusion

Common sense tells us that you can’t give away what you don’t have. Sometimes, though, you transfer things to third parties during your life that you forgot were part of your bequest to someone else, or sometimes you complete a gift to someone before dying. The key is to make sure that your attorney drafts your will in a way that minimizes the risk of ademption, and it is also critical that you check and update your after a significant amount of time passes to make sure it reflects what you actually own, and how you actually want to devise it.

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Article written by Suresh

Suresh is author and owner of way2earning.com. He loves to help people by teaching the ways to make money online with advertising and affiliate programs. He is also passionate about technology and love to write reviews.

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