Supreme Court Affirms Ademption Principle

Delaware Fiduciary Litigation Blog

Posted September 13, 2017

Estate of Burke v. Burke, No. 48, 2017 C.A. No. 10768 (August 24, 2017)

        This case concerns an appeal to the Delaware Supreme Court in a case we previously blogged about. IMO Edward J. Burke Estate C.A. No. 10768-MA (August 10, 2016). In this case, the son of Edward Burke sued his stepmother over proceeds from the sale of a house to which he believed he and his siblings were entitled. However, the will of Edmond’s father (the “Testator”) specifically stated that his son was only entitled to the proceeds of the sale of the home after his stepmother passed away. The address of the home was stated in the will, making it a specific devise.

         Last August, Master Avayzian ruled that the Testator’s son had no legal standing to sue his stepmother for the home sale proceeds as the house had been sold during the Testator’s lifetime with his knowledge. As such, Master Avayzian decided that the sale of the property constituted an ademption. The Testator’s son took exceptions to the Master’s ruling, but those exceptions were denied, and so, Vice Chancellor Glasscock entered summary judgment in favor of Edmond’s stepmother. In the Vice Chancellor’s bench ruling, Vice Chancellor Glasscock agreed that the specific devise of the property was adeemed at the time the property was sold and further decided not to reach the standing issue because a trial would have been futile. That is, if the stepmother were found to have breached her fiduciary duties by pulling money out of the Testator’s bank account prematurely and moving it to an account in her name, the Vice Chancellor would just order that she would have to put the money back into the Testator’s account, which in turn would flow back into his residuary estate, of which she is the sole beneficiary.

         The Delaware Supreme Court agreed with the Vice Chancellor’s bench ruling and held that it would not address the standing issue because a trial would have been pointless. The Supreme Court, likewise, agreed that the devise of the specific property was adeemed, holding that “when a testator had disposed of real estate during her lifetime, such disposition works an ademption of the specific devise and the rights of devisees do not attach by way of substitution to the proceeds of its sale or to other property subsequently acquired by the testator.” The Testator’s son unsuccessfully argued that the ademption principal did not apply because he was to receive the “proceeds” of the sale. The Supreme Court, however, held that under Delaware law, the sale of property worked as an ademption on that devise, which in turn defeated any interest that might otherwise arise.

Author(s)

Phillip Giordano
Associate
Gordon, Fournaris & Mammarella, P.A.