Estate of Schreiber, 2015 MT 282 (Sept. 29, 2015) (Cotter, J.; Rice, J., concurring) (5-0, aff’d & rev’d)
Issue: (1) Whether the district court erred in concluding the devise of the lots and the certificates of deposit had not been adeemed and the named beneficiaries were entitled to a distribution equal to the value of the lots and the CDs; and (2) whether the district court erred in rejecting the PR’s final accounting.
Short Answer: (1) The devise of the lots was not adeemed but the devise of the CDs was; and (2) no.
Affirmed in part, reversed in part, and remanded for entry of an amended order
Facts: August Schreiber died testate in September 2013. His grandson, John Watkins, was named PR. The will devised three lots and five CDs, with half going to Schreiber’s granddaughter, Jaime Harlicker, and half going to the children of Schreiber’s grandson, Donald Watkins. The PR was the residual beneficiary of the will.
Between the time Schreiber executed the will and died, he sold the lots for $20,000 each, and cashed the CDs for an unknown amount, roughly estimated to be between $50,000-$60,000. In his capacity as PR, John Watkins traced the proceeds using the first-in-first-out accounting method, and concluded Schreiber had spent $301,393 between the time he sold the last CD to the time he died, and thereby consumed all proceeds of the sales before he died.
Procedural Posture & Holding: The PR filed a final accounting and petition for distribution calling for Jaime Harlicker and Donald Watkins’ children to receive nothing, and the residuary beneficiary (the PR) to receive the net distributable estate of $111,110. The district court denied the accounting and distribution, finding the PR breached his fiduciary duty by interpreting the will to benefit himself at the expense of other beneficiaries. The PR appeals, and the Supreme Court affirms in part, reverses in part, and remands for entry of an amended order.
Reasoning: (1) Ademption is the destruction or extinction of a testamentary gift as a result of the asset no longer being part of the estate. At common law, a specific devise of property was adeemed if the property was not part of the estate at the decedent’s death. The UPC creates a mild presumption against ademption by extinction of some specific devises. Based on the language of the will, which provides that any proceeds from the lots’ sale are devised, the district court correctly concluded Schreiber did not intend admeption of his specific devise of the lots. The PR bore the burden on showing Schreiber intended ademption, and did not meet his burden.
However, the language devising the CDs differs, and leads the Court to conclude Schreiber did intend them to be adeemed. The district court erred in ordering the value of the CDs to be distributed to the named beneficiaries.
(2) The Court affirms the district court’s rejection of the final accounting and remands with instructions to order the PR to file an amended accounting distributing the value of the lots but not the value of the CDs, and clarifying the fate of certain property Schreiber held in joint tenancy with the PR. Property held in joint tenancy passes immediately to the joint tenant and should not have been included in the distributable estate.
Justice Rice’s Concurrence: Justice Rice concurs with the Court’s holdings but for different reasons. Based on the language of the will specifically devising the proceeds of the sale of the lots, the proceeds are the specific devise.