Oftentimes testators will choose to leave a specific piece of property, known as a specific gift, to a devisee in a Will. Or, in other instances, testators will choose to leave a specific dollar amount to a devisee in their Will, a pecuniary gift. Both of these gifts are considered special gifts.
Property Gifts
In general, a specific devisee has right to the specifically devised property in the testator’s estate at death. But, consider, what happens if the specific property is not owned by the testator at his or her death? This occurrence is a called ademption. A gift is adeemed when property left to a devisee in a Will is no longer in the testator’s estate at death. For example, a testator leaves his or her home to a specific beneficiary, but ended up not owning the home at death. This gift would be considered to have been adeemed. Some states, however, have statutorily changed this common law rule.
For instance, in Minnesota, if real property is no longer in the estate at death, then the specific devisee has the right to the following, if :
· any balance of the purchase price, together with any security agreement, owing from a purchaser to the testator at death by reason of sale of the property;
· any amount of a condemnation award for the taking of the property unpaid at death;
· any proceeds unpaid at death on fire or casualty insurance on or other recovery for injury to the property; and
· property owned by the testator at death and acquired as a result of foreclosure, or obtained in lieu of foreclosure, of the security interest for a specifically devised obligation
Pecuniary Gifts
Generally, pecuniary gifts are smaller dollar amounts (in relative comparison to the rest of the estate assets). The reason why they are smaller is because the pecuniary gifts are paid in whole to the devisee before any of the rest of the estate is paid to any other residuary devisees.
Since most testators do not know how much money he or she will have at death, it is a good idea to be sure any pecuniary gifts are small enough that there is a strong likelihood that there would be cash available since pecuniary gifts are never subject to ademption. If there is not enough cash in the testator’s estate at death, then other assets in the residue of the estate will be liquidated to raise the cash and pay out the gift to the specific devisee.
