It is a very common occurrence for a person with a will in place providing for a specific gift to a family member or loved one to decide that he or she would like to provide that gift to the beneficiary before they die. There could be any number of reasons for this. You might realize that you do not need the property – whether financial assets or a specific piece of property such as jewelry or even a house – any longer in your lifetime. The beneficiary may be going through a time of need, making putting off the gift a financial strain. Or maybe you’re just sick of taking care of that boat, and you want to hand it off to an eager family member as soon as possible. You may even want to benefit a different beneficiary from the one listed in the will, for example if you decide that you should provide stock as a charitable gift to an organization rather than leave it to a family member who is independently wealthy. You do have the right to make the gift to any person before you die (whether it is the beneficiary listed in the will or not), but there are some issues you will want to keep in mind.
The Doctrine of Ademption in California
When a gift listed in a will is made before a testator (the maker of a will) dies, the doctrine of ademption will apply in California. There are two different types of ademption: ademption by satisfaction and ademption by extinction.
With ademption by satisfaction, the testator has made the gift to the beneficiary in the will before his or her death. If the property is the exact property listed in the will – i.e. “my mint condition 1957 Chevy” – then a probate court will consider the gift to have already been given and the beneficiary will not be entitled to another version of the same gift after death.
If the property given is not a specific piece of property, but is instead money or a similarly fungible equivalent, then further action will need to be taken to prevent the beneficiary of receiving more property upon death, such as a writing which explains this and/or an acknowledgement by the beneficiary that he or she has received the gift and will not take again under the will.
With ademption by extinction, the property at issue in the will is no longer in the estate, either because it was given to someone else or for any other reason (i.e. the boat burst into flames and was destroyed), and the beneficiary will receive nothing upon the testator’s death.
Update Your Will And/Or Consider a Gift via a Living Trust
It is recommended that a person considering giving a gift listed in the will prior to death work with an estate planning attorney to address the matter. By failing to do so, there may be a probate court battle after death which pits family member against family member and drains the estate via legal fees.
There are several relatively easy ways to address this issue. First, you can work with your attorney to update your will to reflect the fact that the gift has been given, or you may execute a codicil saying the same. Second, you can create other types of documentation such as the aforementioned writings to make it clear that the gift is no longer in the estate and the beneficiary has received their intended gift.
You can also work with an estate planning attorney to create a trust instrument which provides for the gift, but also provides for additional benefits, such as providing direction on how the gift should be used and protection from creditors.
Update Your Will With a Pasadena Estate Planning Attorney
Estate planning and probate attorney Christopher B. Johnson, located in Pasadena, California, has years of experience in all aspects of estate planning, and works with clients from all walks of life to create revocable living trusts that reflect their needs and those of their beneficiaries. To request an immediate consultation, contact him today at (877) 755-9178.