When it comes to planning your will and the outcome of your estate, it’s important to be comprehensive in your approach. Estate law can be as complex as it is vast, relying on a wide range of factors and considerations that are completely unique to each individual. You have the power to decide on important aspects of your estate once you pass on, including life insurance policies, dividends, property, and more. It’s essential to be thorough in creating your will, as different problems can arise when the property is not valuable enough to satisfy all bequests or not being in possession of property when the will is in probate. These issues occur across the country on a regular basis, disrupting the financial security of beneficiaries in addition to the family’s sense of peace. One way to protect your estate from unforeseen problems is to seek out the help of a local estate planning attorney. If you’re in need of an estate lawyer in Maryland that has the skills and solutions needed to help optimize the outcome for your legacy, be sure to reach out to the JDKatz team.
Our Bethesda estate planning attorneys rely on a knowledgeable team to deliver a complete approach to your unique case. We highly recommend keeping up to date on your estate plan for a wide range of reasons, with ademption and abatement being commonplace. Today, we’ll discuss what these two terms entail, as well as the value of putting protective measures in place. If you’re in need of assistance with planning your estate in Maryland or Washington D.C., be sure to contact us!
Those who make changes to their estate without updating their will may be guilty of bequeathing a gift to a beneficiary that has been adeemed. Ademption is the term used to describe situations where the testator left an asset to a family member that no longer exists. Our estate lawyers talk to a large population of individuals who are unable to receive a gift due to the will being out of date. Normally, property will be changed or sold, resulting in a gap where that item is no longer in the testator’s possession (i.e. adeemed).
Ademption by Extinction
The family car is a common example. As a child, you may have fond memories of your family vehicle when you went on vacations, holiday trips, and daily errands. If your father always wanted you to have the family car to carry on its traditions, he will likely name it in his will. For any number of reasons, your dad may have had to sell this treasured automobile, upgrading during retirement to a luxury sedan. If his will states that the family vehicle specifically is to be gifted to you, the request will be considered adeemed. This is known as ademption by extinction.
Identifying Ademption by Extinction
The probate process can be stressful, yet it helps on an official level when dealing with your appointed probate court. Courts will normally rely on one of two theories to properly assess the identification of ownership when a specific bequest is facing ademption:
- The identity theory is utilized by many states as a means of identifying the validity of the testator’s wishes. Simply put, if a bequest is not part of the estate at the time of death, it is adeemed.
- The intent theory relies on the testator’s intent with their bequests. States will adeem property unless proper evidence is presented that shows that doing so would be incongruent with the testator’s final intent. If a case is successful, you can expect to receive property that is close in value as compensation.
Ademption by Satisfaction
Ademption by satisfaction is a common law that classifies gifts from the testator to a beneficiary as an advanced payment for their inheritance. If you were to receive a gift earlier in life that the court determines to be enacted to satisfy part of the will, that value may end up being deducted from your inheritance during the probate process. Based on where you live, your probate court will look at several factors that help to legitimize ademption by satisfaction:
- The will is valid and allows for deductions to be used before death.
- The testator will need to submit a written document that this bequest is intended to be deducted or satisfied for the stated amount.
- The beneficiary will need to sign an acknowledgment that they understand the use of this gift was deducted from the total value of the bequest originally stated.
As part of your estate plan, it’s vital to take the proper steps to ensure that your bequests are legitimate and accounted for when facing ademption by satisfaction. College savings is a regular source for this type of reduction, where a parent will leave a set amount to their child for the cost of their education. If the provider declares that they spent half of that amount on their child’s college costs, they will need to do so in writing. If the parent passed away afterward, that 50 percent of the bequest will be considered adeemed and deducted from the total value.
In many cases, ademption by extinction or satisfaction is more complicated than the examples we used today. Be sure to check back next time to learn about the complexities of abatement and how it can affect your estate. Our blog series is meant to be educational and in no way serves as official legal advice. If you’re in need of a qualified estate lawyer in Maryland, JDKatz is here and ready to help. Our estate planning attorneys in Bethesda have the knowledge and experience needed to create a comprehensive approach for planning your legacy. Contact us today to learn more!