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Ademption: Sale of Stock Defeats Inheritance

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A will (or trust) often leaves specific items — like stock — to named individuals. But what happens when that specific item no longer exists at the death of the owner? Well, let’s review the concept of “ademption.”

What is ademption?

The legal concept of ademption is straightforward. But understanding it requires us to first define a related term: “specific devise.”

A gift included in a will is a “devise” or a “bequest.” When included in a trust, the similar gift is usually called a “distribution.” A devise, bequest or distribution can be one of these types:

  • Pecuniary — a money amount (“I leave the sum of $10,000 to my nephew, Brian”)
  • Specific — a gift of an identified asset (“I leave my gold Cartier watch to my niece, Erin”)
  • Residuary — the final distribution, after pecuniary and specific amounts have been distributed (“I leave the rest of my estate to my niece, Amy”)

So a specific devise (or specific bequest, or specific distribution in a trust) names a particular asset. It could be anything, really — the valuable watch, a sentimentally valuable cedar chest, a named account (“my savings account at Alliance Bank of Arizona“) — or a named stock (“all of my stock in Western Alliance Bancorporation“).

But what happens when the item named in the specific devise / bequest / distribution no longer exists at the death of the donor? Ah — that’s ademption. We’ve described it before, but haven’t seen a good case illustration in some years.

Can you give an example?

Yes, we can. In fact it’s easy. We just look to a recent Maine Supreme Court decision for a good explanation.

In 2003, Patricia and William Shea signed a joint revocable trust. It was called the Shea Family Living Trust. The trust left everything under the control of the surviving spouse upon the death of either of them. On the second spouse’s death, all of the couple’s interest in two named stocks were to go to Patricia’s nephews and nieces. The residue of the trust would go to William’s children.

In 2003, when they established the trust, Patricia and William owned General Electric stock. They also owned stock in a small bank, the Siwooganock Bank of New Hampshire.

William Shea died in 2006. Coincidentally, the Siwooganock Bank also reached the end of its life in that same year. It was bought out by Passumpsic Savings Bank (which later became Passumpsic Bank). The Shea Family Living Trust received $460,000 for its shares in Siwooganock Bank as a result.

Over the next twelve years, the trustee moved the Siwooganock Bank proceeds in and out of accounts with other trust assets. Later trust investments further confused the question of original source and made it difficult to trace the sale proceeds.

Patricia died in 2018.The successor trustee distributed the General Electric stock (which the trust still owned) to Patricia’s nieces and nephews. He then informed the nieces and nephews that they would not receive any other distributions from the trust.

So how does ademption work?

Patricia’s relatives insisted that the proceeds from the liquidation of the Siwooganock Bank stock belonged to them. Because the sale of the stock was involuntary (on Patricia’s part), they reasoned that she would have intended the proceeds to go as originally planned.

Ademption can be:

  • voluntary (Patricia could have sold her bank stock, or the General Electric stock, for that matter).
  • involuntary ( she wasn’t given any choice in the liquidation). It can be complete (as here) or partial (as it might be, for instance, if a piece of real property is partly taken by the government for a right of way).
  • “by satisfaction” if, for example, the specifically devised property is given to the beneficiary before the owner’s death.

Generally, ademption principles apply to both wills and trusts. In Maine, that relationship is explicit by statute — as it is in Arizona.

In the case of Patricia and William’s trust, a trial judge agreed with the trustee. A presumption against ademption applies when the action is involuntary. But not indefinitely. Because the liquidation had been years before, and the property mingled with other trust assets, the ademption rules meant that Patricia’s nieces and nephews would receive no share of the proceeds.

So is that the end of the discussion?

Actually, no. The nieces and nephews still have a claim to make. Did Patricia actually intend that they should receive the value of the bank stock? They might be able to show that she did.

Patricia’s relatives had also asked the court to “reform” the trust to reflect Patricia’s actual intentions. They never got to make that argument, since the case was resolved on a motion for summary judgment. So the state Supreme Court remanded the case for further proceedings. If there is clear and convincing evidence that Patricia actually intended the bank stock proceeds to go to her nieces and nephews, they still might receive some or all of the sale value. Connary v. Shea, September 14, 2021.

Of course, the real message of Patricia’s and William’s trust case is clear: when there is a large change (like liquidation of a major asset included in a specific devise), it’s time to visit your estate planning attorney. In fact, life changes almost always accumulate rapidly enough to make such a visit appropriate every 5-10 years. If Patricia had talked with her attorney, the two of them could have figured out what her wishes might be and made necessary changes to clarify those wishes.


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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.