In plain language, ademption is what occurs in the situation described in the title of this article: A will leaves a particular piece of real or personal property (e.g., a house, car, dog, watch) to a specific individual, but the item is not in the decedent’s estate at his death. (Perhaps the decedent crashed the car while racing the dog to the vet after the dog swallowed the watch, and sold the house in grief after the dog died in surgery.)
In legal language, ademption, or “the extinction or withdrawal of a legacy,” occurs as a “consequence of some act of the testator equivalent to its revocation, or clearly indicative of an intention to revoke.” In re Estate of Mason, 62 Cal. 2d 213, 215 (1965) (internal citations and quotations omitted). “[A]demption is effected by the extinction of the thing or fund bequeathed, or by a disposition of it subsequent to the will, which prevents its passing by the will, from which an intention that the legacy should fail is presumed.” Id. However, “[a] change in the form of property subject to a specific testamentary gift will not effect an ademption in the absence of proof that the testator intended that the gift fail.” Id., see also In re Estate of Stevens, 27 Cal. 2d 108, 115-16 (1945) (“Proof of such intent [to destroy the bequest] is necessary to establish an ademption.”); Estate of Austin, 113 Cal. App. 3d 167, 174 (1980) (“In the absence of proof of an intent that the gift fail, there should be no ademption.”). “In determining whether the change is in form only, California courts . . . look to the inferred or probable intent of the testator under the particular circumstances.” Estate of Austin, 113 Cal. App. 3d at 173.
“[A] specific testamentary gift is adeemed regardless of the testator’s intention when the specific property has been disposed of by the testator and cannot be traced to other property in the estate or when the testator has placed the proceeds of such property in a fund bequeathed to another.” Estate of Mason, 62 Cal. 2d at 216; Estate of Austin, 113 Cal. App. 3d at 172 (“If the testator has disposed of a specific legacy, it may be presumed that he intended that the gift fail. When it is done by act of a third person . . . no such intent can be presumed.”).
However, an ademption does not occur “when the specific property has been sold and the proceeds spent by a guardian during an incompetency from which the testator does not recover.” Id. “When specifically devised property has been sold and the proceeds used to pay debts and expenses, the devisee may have his gift redeemed from the remainder of the estate.” Id., at 217. Moreover, “no intent to adeem can be found in a deed which was procured by undue influence, and which thus neither represents the will nor expresses the intention of the grantor-testator. One’s intent is not expressed by an act performed only because his free will was overcome.” In re Holmes’ Estate, 233 Cal. App. 2d 464, 468 (1965) (internal citations omitted).
As a policy matter, “California courts have sought to avoid ademption whenever possible.” Estate of Worthy, 205 Cal. App. 3d 760, 766 (1988). The presence of a residuary clause does not compel the court to find a presumed ademption. Id., at 767.
In short, if a piece of property is sold by the testator, and the proceeds from the sale of the property cannot be traced into the estate, there is a presumption of ademption. However, if the property is simply sold, and the testator intends the sale to be a transformation in form only, no ademption occurs.
Likewise, if it is a third party acting on behalf of the testator, such as a person acting under a durable power of attorney or conservatorship, no ademption can be made, as the testator’s intent is not shown by actions of third parties. Similarly, acts of a testator resulting from undue influence do not result in ademption, for the acts of a person resulting from undue influence do not evidence the person’s intent.
In California trust and estate litigation cases, ademption issues often require a forensic accounting to trace funds or extensive discovery regarding the location of funds, whether commingling occurred, potential undue influence, medical history, and whether a third party may have acted on the decedent’s behalf.