When an asset devised in a Last Will and Testament has been gifted to the beneficiary during the decedent’s lifetime, an ademption by satisfaction may occur. The concept of ademption by satisfaction is that a lifetime gift to a beneficiary may satisfy a gift to that beneficiary made in the Will. The determination of whether the lifetime gift does satisfy the gift made in the Will depends on applicable law. So how does this work in Florida?
Section 732.609, Fla. Stat. provides as follows:
Property that a testator gave to a person in the testator’s lifetime is treated as a satisfaction of a devise to that person, in whole or in part, only if the will provides for deduction of the lifetime gift, the testator declares in a contemporaneous writing that the gift is to be deducted from the devise or is in satisfaction of the devise, or the devisee acknowledges in writing that the gift is in satisfaction. For purposes of part satisfaction, property given during the testator’s lifetime is valued at the time the devisee came into possession or enjoyment of the property or at the time of the death of the testator, whichever occurs first.
This statutory section establishes that lifetime gifts do not satisfy a devise or bequest made in a Will unless the Will or other written document establishes that such would be the case. In other words, there is no ademption by satisfaction unless specifically provided for. in writing
An example can help understand how this works. John goes to his estate planning attorney and establishes a Last Will and Testament that provides as follows:
To my nephew, Robert, I devise a pecuniary gift in the amount of $10,000. All of the rest, residue, and remainder of my estate I devise to my nephew, Robert, and to my nieces, Susan and Nancy, in equal shares.
Prior to his death, John gives Robert $10,000. When he does so, John does not leave any written instructions as to how the gift is supposed to be treated in connection with the Will. Then John dies. Upon opening John’s estate, Susan and Nancy argue that Robert has received $10,000 and that that should be set-off against his share of the residuary. Based on Section 732.609, they lose on that argument. Robert gets the cash received by lifetime gift and he also gets one-third of the residue. If John had specified otherwise in his Will or by separate written document, then the outcome could have been different.
This demonstrates that when a person does an estate plan, one issue which he or she should consider is whether any lifetime gifts should be applied against the final devise under the Will. The general rule is that if it is not specifically addressed, then there is no set-off against that beneficiary’s share. An experienced estate planning lawyer can help address this so that the person’s wishes are carried out.