Part 5. Disinheritance by Ademption

Ademption is the legal process of disinheriting children through the process of assets being passed pursuant to the terms of a will – even though that process is clearly known to be against the wishes of the deceased.

Let’s take an example: At age 45, a father creates a will in Leawood where his three children get to split his house and the ownership of his business.  Being a successful business owner, his business is worth several million dollars and his home is worth a million itself.  Then, being generous to a fault, he grants the residuary of his estate (the stuff left over) to his nephews and nieces.  The thought process being that there will be a CD that matures worth around $100,000 and some small bank accounts worth a few thousand.  The goal is to give the bulk of his estate to his children.

However, at age 72, the father is getting tired of running his business and decides to sell it.  He gets a great price and puts it into his bank.  He never gets around to updating his will and dies leaving the will exactly as it was.  The children get exactly what their father left them – the house and business.  There is no business, so that is not hard to split.  The three children do get the $1 million house.  The nephews and nieces get a great windfall as they get the residuary – the original $100,000 of bank accounts, plus the one with the proceeds of the sale of the business, $3 million.  This is all done even though everyone knows that it is contrary to the father’s wishes.

The father could have avoided this by updating his will once he sold the business.  He could have avoided it by creating a Leawood trust and putting the proceeds in there once he sold the business.  There are also several other ways to have avoided this.  Unfortunately, the father didn’t do any of them.

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