[WSBAPT] specific bequest sold before death

[Robert R. Cole]

Thanks guys.  May have to make some new law here.  Lots of other 
interesting factors in this matter.

Very Truly Yours,

Robert R. Cole

Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW

Stanwood, WA 98292

(360) 629-2900 (Telephone)

(360) 629-0220 (Fax)

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On 7/22/2022 11:28 AM, Eric Nelsen wrote:
>
> Ademption of a gift is the key research term. Here’s a chunk of 
> Reutlinger’s Washington Law of Wills and Intestate Succession - 
> Chapter a. changes in property or entitlement Changes In Property or 
> Entitlement (Washington Law of Wills and Intestate Succession (WSBA) 
> (3d. ed. 2018)):
>
> A.2. ADEMPTION
>
> A.2.A. ADEMPTION BY EXTINCTION
>
> If an asset has been specifically given in the will of a testator and 
> it is not in existence or owned by the testator at the time of death, 
> it is said to have been adeemed, or more technically, adeemed by 
> extinction. Only specific gifts can be so adeemed, because general and 
> demonstrative gifts can be satisfied out of general assets of the 
> estate and do not require the existence of any specific assets for 
> their effectiveness. There is a presumption against specific gifts and 
> in favor of general or demonstrative gifts unless a specific gift was 
> clearly intended by the testator.7
>
> In In re Doepke's Estates,8 the testator left to her son "the sum of 
> $3000.00, being the amount of life insurance left by my husband to me, 
> ...." The specific fund that represented the insurance proceeds had 
> been depleted by the time of her death. If the gift had been specific, 
> it would have been adeemed by extinction. Because the testator had 
> left the "amount" of life insurance rather than the life insurance 
> itself, however, the court determined that it was a general gift and 
> therefore not adeemed.
>
> [Page 170]
>
> Under the common law the intention of the testator at the time the 
> gift was adeemed is not relevant to the question of ademption. In 
> other words, when the testator's actions operated to change the form 
> of the asset specifically given, his or her intent (if indeed one 
> existed) in regard to whether that change would constitute an 
> ademption will not be considered.9 What is relevant, however, is what 
> the testator intended to give at the time of making the gift. If the 
> testator intended a gift of money, regardless of where it was held, 
> then a change in bank account will not affect the gift. But if the 
> testator intended a gift of the contents of a specific account and 
> closed the account, there would very likely be an ademption. Use of 
> words like "my 1925 Rolls-Royce" may lead, therefore, to a 
> construction of a specific gift,10 which can then be adeemed by 
> extinction. Without a specific reference such as the word "my," a gift 
> of "a 1925 Rolls-Royce" could well be construed as general; and if the 
> testator had at the time owned a 1925 Rolls-Royce but later sold it, 
> the executor could be required to go out and purchase one to fulfill 
> the general gift in the will.11 (Of course, a gift of "my car" would 
> usually apply to any car the testator owned at death, the will being 
> ambulatory.)12
>
> Other examples of ademption by extinction might involve a gift of 
> specific real property that was sold prior to death, or of a specific 
> automobile that was destroyed and rendered valueless prior to death. 
> In each case the specific asset given was not owned or in existence at 
> the time of death, and therefore the will could not operate to pass 
> that asset.
>
> The more difficult questions arise with assets that have been only 
> partially disposed of or have been exchanged (voluntarily or 
> involuntarily) for other assets. The Uniform Probate Code (U.P.C.)13 
> eliminates ademption by extinction in a number of areas in which it 
> has traditionally operated. Under the code a specific legatee or 
> devisee will be entitled to:
>
> (1) any balance of the purchase price, together with any security 
> agreement, owed by a purchaser at the testator's death by reason of 
> sale of the property;
>
> [Page 171]
>
> (2) any amount of a condemnation award for the taking of the property 
> unpaid at death;
>
> (3) any proceeds unpaid at death on fire or casualty insurance on, or 
> other recovery for injury to, the property;
>
> (4) any property owned by the testator at death and acquired as a 
> result of foreclosure, or obtained in lieu of foreclosure, of the 
> security interest for a specifically devised obligation;
>
> (5) any real property or tangible personal property owned by the 
> testator at death that the testator acquired as a replacement for 
> specifically devised real property or tangible personal property; and
>
> (6) if not covered by paragraphs (1) through (5), a pecuniary devise 
> equal to the value as of its date of disposition of other specifically 
> devised property disposed of during the testator's lifetime, but only 
> to the extent it is established that ademption would be inconsistent 
> with the testator's manifested plan of distribution or that at the 
> time the will was made, the date of disposition or otherwise, the 
> testator did not intend ademption of the devise.
>
> This approach allows the specific taker to trace the proceeds of 
> certain assets and secure them, even if the specific asset given is no 
> longer owned or in existence. It is presumably based on the assumption 
> that in those cases, a testator would want the specific beneficiary to 
> take the proceeds from the property specifically given. Washington has 
> not adopted the Uniform Probate Code approach, nor, for that matter, 
> any other comprehensive statute on ademption. There are no cases in 
> Washington dealing with voluntary or involuntary conversion of the 
> assets after the execution of the will. From the court's approach in 
> other ademption cases, there is nothing to suggest it would deviate 
> from the common-law approach in this area.14
>
> There is no ademption when property devised by will is made subject to 
> a contractual commitment after the will is executed but before the 
> death of the testator. Under RCW 11.12.060, any "bond, covenant, or 
> agreement made for a valuable consideration by a testator to convey 
> any property, devised or bequeathed" in a prior will is not deemed a 
> revocation of that devise or bequest.15 Instead the property passes to 
> the named taker, subject to the same remedies against the taker as 
> would have been available against the
>
> [Page 172]
>
> heirs or next of kin of the decedent had the property passed to them 
> by intestate succession. In Washington Escrow Co. v. Blair,16 the 
> testator had specifically devised a parcel of real property to a third 
> party and had named his son as the taker of his residual estate. 
> Shortly before his death, the testator contracted to sell the parcel 
> that had been specifically given in the will. The sale was subject to 
> certain financing conditions and the warranty deed, purchase money 
> receipt, and escrow instructions were deposited with an escrow 
> company. The testator died shortly thereafter, and following his 
> death, the purchaser paid the balance of the purchase price and the 
> escrow company recorded the deed for the purchaser. Both the devisee 
> and the residual taker claimed the proceeds of the sale. The court 
> held that the title to the property vested in the specific devisee at 
> the testator's death. The sale was not a "completed transaction," 
> because there were conditions remaining to be fulfilled at the time of 
> death. Under the statute, an executory contract or agreement to sell 
> when there is no conveyance prior to death does not operate as a 
> revocation of the gift made in the will; but in effect the specific 
> taker steps into the shoes of the decedent and undertakes all of the 
> benefits and burdens under the contract.17 If, however, the purchaser 
> had met all of the conditions in the agreement before the death of the 
> seller, fulfilling all of the escrow instructions, and the deed had 
> been delivered from escrow to the grantee (apparently also required by 
> the court), then the property would have belonged to the purchaser at 
> the time of death, and the gift in the will would have been adeemed. 
> The proceeds of the sale then would have passed to the residual taker.
>
> Ademption must occur after the testator executes his will. A 
> testamentary gift is not adeemed by the fact that the property devised 
> was already conveyed to the devisee before the will was executed.18
>
> A.2.B. ADEMPTION BY SATISFACTION
>
> If while living a testator transfers property or cash to a named taker 
> under his will and intends the transfer to be in lieu of the 
> testamentary transfer, the testamentary transfer is "adeemed
>
> [Page 173]
>
> by satisfaction" (or "satisfied") to the extent of the inter vivos 
> transfer.19 The doctrine of satisfaction is sometimes confused with 
> that of advancements, which is a similar concept related to intestate 
> estates.20 Although both doctrines involve gifts to potential takers 
> of the donor's estate, different rules often apply.21 An example of 
> the possible confusion is In re Spadoni's Estate.22 The testator gave 
> his daughter, who was a pecuniary legatee under his will, $1,000 from 
> his bank account. The testimony at trial established that it was the 
> intent of the testator that this gift be considered part of the 
> legatee's testamentary gift. Both the trial court and this court 
> decided, based on the clear evidence of intent, that the gift was an 
> "advancement" and was controlled by RCW 11.04.150 (now subsumed under 
> RCW 11.04.041). That statute, however, refers expressly to gifts "by 
> the intestate" as being advancements, and intestacy has always been a 
> prerequisite to the application of the doctrine of advancements and to 
> the application of the advancement statute.23 Spadoni's Estate did not 
> involve an intestate estate, and therefore the advancement statute 
> should not have applied; rather, the principles of ademption by 
> satisfaction should have been considered. Although it is very likely 
> that, given the clear evidence of the testator's intent at the time 
> the gift was made, the gift in Spadoni's Estate would have been found 
> to be in partial satisfaction of the testamentary gift to the 
> daughter, it nevertheless is unfortunate that the court should 
> perpetuate the misconception that any gift prior to death should be 
> analyzed as an advancement, whether the decedent died testate or 
> intestate. As there do not appear to be any cases in Washington 
> applying the true doctrine of satisfaction, however, it is presently 
> unclear whether in the future the courts will continue to equate 
> satisfaction with advancements and apply (despite its wording) the 
> advancement statute to testate decedents.
>
> If the doctrine of ademption by satisfaction is to be applied at all, 
> the most important element to note is the requirement that the 
> testator have the contemporaneous specific intent to satisfy the 
> testamentary gift. At common law ademption by satisfaction applied 
> only to personal property, and in some states only to pecuniary
>
> [Page 174]
>
> legacies. Intent was presumed in most states if the testator was in 
> loco parentis to the donee or the testamentary gift was for a specific 
> purpose that was accomplished by the testator during his lifetime (for 
> example the payment of a debt).24
>
> It is worth noting that a more modern approach is taken in the 
> U.P.C.,25 and it is aimed at limiting the effect of ademption by 
> satisfaction. The U.P.C. treats an inter vivos gift as ademption by 
> satisfaction only if the will provides for deducting such gifts, the 
> testator declares in a contemporaneous writing that the gift is in 
> satisfaction of a testamentary gift, or the taker acknowledges in 
> writing that the gift is in satisfaction. If indeed the Washington 
> courts adopt the procedures (to the extent applicable) of the 
> advancement statute, they will apply a similar presumption against 
> satisfaction (advancement) "unless shown to be" otherwise.26...
>
> FOOTNOTES:
>
> 7 In re Doepke's Estates, 182 Wash. 556, 47 P.2d 1009 (1935); First 
> Interstate Bank of Wash. v. Lindberg, 49 Wn. App. 788, 800, 746 P.2d 
> 333, review denied, 110 Wn.2d 1026 (1987).
>
> 8 182 Wash. 556.
>
> 9 Atkinson §134; 6 Jeffrey A. Schoenblum, Page on the Law of Wills 
> §54.15 (2003 & Supp. 2016).
>
> 10 Atkinson §132.
>
> 11 Id.
>
> 12 See Chapter 6, §A2.h.
>
> 13 Unif. Probate Code §2-606 (2010).
>
> 14 Wash. Escrow Co. v. Blair, 40 Wn.2d 432, 243 P.2d 1044 (1952); In 
> re Doepke's Estates, 182 Wash. 556, 47 P.2d 1009 (1935).
>
> 15 Under the common law such a gift might have been adeemed. Atkinson 
> §134; 6 Jeffrey A. Schoenblum, Page on the Law of Wills §54.7 (2003 & 
> Supp. 2016).
>
> 16 40 Wn.2d 432.
>
> 17 Wash. Escrow Co., 40 Wn.2d at 436.
>
> 18 In re Estate of Frank, 146 Wn. App. 309, 324-25, 189 P.3d 834 
> (2008), review denied, 165 Wn.2d 1030 (2009). Therefore, even if the 
> preexecution conveyance is for some reason declared invalid, the gift 
> in the will would still stand. Id.
>
> 19 Atkinson §133; 6 Page on Wills §54.21.
>
> 20 See Chapter 1, §J.
>
> 21 The Uniform Probate Code §2-609 (2010) treats satisfaction 
> essentially the same as advancement (Unif. Probate Code §2-109 
> (2010)), except as to the effect of a predeceasing ancestor. See Unif. 
> Probate Code §2-609 cmt. (2010)
>
> 22 71 Wn.2d 820, 430 P.2d 965 (1967).
>
> 23 RCW 11.04.041; Atkinson §129; 6 Page on Wills §55.1.
>
> 24 Atkinson §133; 6 Page on Wills §§54.28 - 54.31.
>
> 25 Unif. Probate Code §2-609 (2010). See note 21.
>
> 26 RCW 11.04.041.
>
> Sincerely,
>
> Eric
>
> Eric C. Nelsen
>
> Sayre Law Offices, PLLC
>
> 1417 31st Ave South
>
> Seattle WA 98144-3909
>
> 206-625-0092
>
> eric at sayrelawoffices.com
>
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>
> *From:*wsbapt-bounces at lists.wsbarppt.com 
> <wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *Robert R. Cole
> *Sent:* Friday, July 22, 2022 10:45 AM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* [WSBAPT] specific bequest sold before death
>
> Mom's Wills over decades provided that daughter (only surviving child) 
> would receive the residence, rest to grandchildren.  It was sold 
> shortly before her death. Most of the proceeds are still in her 
> account. I don't even know where to start research.  Appreciate some 
> help.
>
> -- 
>
> Very Truly Yours,
>
> Robert R. Cole
>
> Law Office of Cole & Gilday, P.C.
>
> 10101 - 270th St. NW
>
> Stanwood, WA 98292
>
> (360) 629-2900 (Telephone)
>
> (360) 629-0220 (Fax)
>
> This message contains confidential and privileged information that is 
> intended only for the named recipient(s).  Unless you are the named 
> recipient or authorized agent thereof, you are prohibited from 
> reading, copying, distributing or otherwise disseminating such 
> information.  If you receive this communication in error, please 
> notify the sender immediately.
>
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