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Question 1
Suzy's will bequeaths "my three-carat diamond and ruby ring to my daughter, Daisy"; "$10,000, to be paid out of the proceeds of the sale of my Texaco stock, to my son, Clarke." Before her death, Suzy's ring is stolen; and she sells all of her Texaco stock to finance the purchase of a new car. Neither of these assets is in Suzy's estate at her death. Which gift is adeemed?
Correct
Incorrect!
Correct The gift of the diamond and ruby ring is a specific bequest. As such, ademption applies and Daisy gets nothing if the item is no longer owned by Suzy. However, the '$10,000, to be paid out of the proceeds of the sale of my Texaco stock' is a demonstrative legacy. Ademption does not apply to demonstrative legacies. See, e.g., In re Estate of Lung, 692 A.2d 1349 (D.C. 1997); In re Will of Young, 137 Misc. 2d 744 (1987). Clarke is still entitled to $10,000. Other assets must be sold, if necessary, to raise the $10,000 to be distributed to Clarke.
Incorrect! The gift of the diamond and ruby ring is a specific bequest. As such, ademption applies and Daisy gets nothing if the item is no longer owned by Suzy. However, the '$10,000, to be paid out of the proceeds of the sale of my Texaco stock' is a demonstrative legacy. Ademption does not apply to demonstrative legacies. See, e.g., In re Estate of Lung, 692 A.2d 1349 (D.C. 1997); In re Will of Young, 137 Misc. 2d 744 (1987). Clarke is still entitled to $10,000. Other assets must be sold, if necessary, to raise the $10,000 to be distributed to Clarke.
Correct
Incorrect!
Question 2
Bryce's will bequeaths $20,000 to his son, Franklin. In addition, he bequeaths his Federated stock and all bank deposits in his name to his grandchildren, Pascal and Sigmund. Shortly before his death, another son, Hector, withdraws all Bryce's bank deposits to buy U.S. Treasury bonds as his agent. As a result, there is no longer any money on deposit to discharge the gift to Franklin and the gifts to Pascal and Sigmund. Which gift is adeemed?
Correct
Incorrect!
Correct
Incorrect!
Correct There was an ademption of the bank deposits because there was a substantial change in the nature or character of the subject matter of the bequest. Bryce's bank accounts no longer exist because of the substantial change into U.S. Treasury bonds. Bryce's bequests to Pascal and Sigmund were specific, but totally unrelated to the bonds. See, e.g., McGee v. McGee, 413 A.2d 72 (R.I. 1980).
Incorrect! There was an ademption of the bank deposits because there was a substantial change in the nature or character of the subject matter of the bequest. Bryce's bank accounts no longer exist because of the substantial change into U.S. Treasury bonds. Bryce's bequests to Pascal and Sigmund were specific, but totally unrelated to the bonds. See, e.g., McGee v. McGee, 413 A.2d 72 (R.I. 1980).
Question 3
Cheryl made the following bequest in her will: "I devise to my sister, Penelope, the cabin I own in Montpelier, VT." Two months before Cheryl died, the cabin and its contents were destroyed in a brush fire. The executor of Cheryl's estate received $120,000 in insurance proceeds. Penelope is entitled to the $120,000.
Correct If insurance proceeds derived from the loss of the property is paid after the decedent's death, that money is often payable to the devisee in satisfaction of the specific bequest. Here, the cabin burned down prior to Cheryl's death. However, rather than the gift adeeming, Penelope would be entitled to the insurance proceeds because the executor of Cheryl's estate received that money as payment for the loss of the property.
Incorrect! If insurance proceeds derived from the loss of the property is paid after the decedent's death, that money is often payable to the devisee in satisfaction of the specific bequest. Here, the cabin burned down prior to Cheryl's death. However, rather than the gift adeeming, Penelope would be entitled to the insurance proceeds because the executor of Cheryl's estate received that money as payment for the loss of the property.
Correct
Incorrect!
Question 4
Bryce's will bequeaths $20,000 to his son, Franklin. In addition, he bequeaths $10,000 in bank deposits at a Chicago bank to his grandchildren, Pascal and Sigmund. To his other son, Hector, he leaves his residuary estate. Lastly, to his cousin, Phyllis, he leaves his vintage Mustang. His residuary estate is inadequate by $25,000 to pay all debts and expenses of his estate. Which gift abates first?
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct Pursuant to the order of abatement, the residuary estate is usually the first category to abate, if there is no property passing under the intestacy statutes. Here, Hector was entitled to the residuary estate. However, since it was insufficient to pay the expenses and debts (which are paid first), there is nothing left for him to inherit.
Incorrect! Pursuant to the order of abatement, the residuary estate is usually the first category to abate, if there is no property passing under the intestacy statutes. Here, Hector was entitled to the residuary estate. However, since it was insufficient to pay the expenses and debts (which are paid first), there is nothing left for him to inherit.
Question 5
Bryce's will bequeaths $20,000 to his son, Franklin. In addition, he bequeaths $10,000 in bank deposits at a Chicago bank to his grandchildren, Pascal and Sigmund. To his other son, Hector, he leaves his residuary estate. Lastly, to his cousin, Phyllis, he leaves his vintage Mustang. His residuary estate is inadequate by $25,000 to pay all debts and expenses of his estate. How much does Pascal receive?
Correct
Incorrect!
Correct Due to the $25,000 shortfall, that amount must be subtracted from other gifts, following the order of abatement. The least protected category (after the residuary estate elimination) is the general $20,000 bequest to Franklin. Accordingly, he gets nothing. After absorbing that $20,000, there is still $5,000 in debts/expenses that must be paid. The next category for abatement is the demonstrative bequest to Pascal and Sigmund. Each was to share equally in the $10,000, or receive $5,000 apiece. However, each first must be allocated a pro rata share of the remaining $5,000 in debts/expenses, or $2,500. Once that $2,500 is accounted for, the balance payable to Pascal is $2,500.
Incorrect! Due to the $25,000 shortfall, that amount must be subtracted from other gifts, following the order of abatement. The least protected category (after the residuary estate elimination) is the general $20,000 bequest to Franklin. Accordingly, he gets nothing. After absorbing that $20,000, there is still $5,000 in debts/expenses that must be paid. The next category for abatement is the demonstrative bequest to Pascal and Sigmund. Each was to share equally in the $10,000, or receive $5,000 apiece. However, each first must be allocated a pro rata share of the remaining $5,000 in debts/expenses, or $2,500. Once that $2,500 is accounted for, the balance payable to Pascal is $2,500.