Unhappy beneficiary

Under New Jersey law, a testamentary gift of specific property will lapse (i.e. adeem) when that specific property is no longer available, and where the testator intended the gift to be specific in nature.

On March 10, 2021, the Superior Court of New Jersey, Appellate Division (Docket No. A-3455-19) held that gifts of cash directed to be paid from named bank accounts were “specific gifts” and subject to ademption when the funds in those accounts were used to pay for the Decedent’s care prior to his death. In the Matter of the Estate of Hoffman, Docket No. A-3455-19 (Unpublished Opinion, Decided March 10, 2021).

“There are three types of testamentary gifts: general, specific, and demonstrative. Busch v. Plews, 19 N.J. Super. 195, 204 (Ch. Div. 1952), aff’d 21 N.J. Super. 588 (App. Div. 1952), aff’d 12 N.J. 352 (1953). A general legacy is “a bequest of personal property payable out of the general assets of the testator’s estate rather than from specific property included therein.” Plews, 12 N.J. at 356 (citing In re Low, 103 N.J. Eq. 435, 437 (Prerog. Ct. 1928)).”

“A specific legacy is “a bequest of personal property in specie and not payable from other assets of the estate.” Ibid. (citing Camden Trust Co. v. Cramer, 136 N.J. Eq. 261, 270 (E. & A. 1945)). A demonstrative legacy is a “bequest payable primarily out of specified property but chargeable against other assets of the estate if that property is insufficient . . . .” Ibid. (citing Cramer, 136 N.J. Eq. at 270).”

“In deciding whether a legacy is specific or general, the intention of the testator must control, as it must [control] the decision of every other question involving the construction of wills.” Zorner v. Foth, 124 N.J. Eq. 508, 509 (Ch. Div. 1938). “There is no technical arbitrary rule requiring the use of particular words or expressions to make a bequest specific.” Ibid. “The words of exclusion must” furnish “an almost infallible test of the meaning of the testator.” Ibid.”

On the facts presented, while the Decedent may have wanted certain bank accounts to pass to certain beneficiaries when he drafted his will, by spending that money on his own care later on clearly indicated that the gifts were specific in nature and subject to ademption. The court found the funds were exhausted and there was no evidence of undue influence or other wrongdoing.