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Estate of Mayberry v. Mayberry, 318 Ark. 588, 886 S.W.2d 627

Facts

Nora Mayberry executed a will bequeathing a joint savings account to her daughter, Helen Mayberry, allowing her free access for life. Before her death, Nora closed the savings account and used the funds, along with her personal money, to purchase three certificates of deposit in her name. After Nora's death, Helen sought possession of the C.D.s, but the probate court found that the specific bequest had not been adeemed, asserting it was merely a change in form.

Following the death of Nora Mayberry, Helen Mayberry moved for possession of the three C.D.'s. After a hearing before the probate court, the court found that an ademption of the specific bequest of the Arkansas Bank & Trust Company savings account had not occurred.

Issue

Did the specific bequest of the Arkansas Bank & Trust Company savings account to Helen Mayberry adeem when the account was closed and the funds were used to purchase certificates of deposit?

The issue that lies at the heart of this appeal is whether an ademption of the specific bequest to Helen Mayberry of the Arkansas Bank & Trust Company savings account occurred, or whether the three C.D.'s which existed at Nora Mayberry's death constituted a mere change in form, as the probate court found.

Rule

A specific legacy is subject to ademption if the identical thing bequeathed is not in existence or has been disposed of at the time of the testator's death. A change in the form of a security does not work an ademption unless it is shown that the testator intended to give specific securities of the form mentioned in the will.

The distinctive characteristic of a specific legacy is its liability to ademption. If the identical thing bequeathed is not in existence, or has been disposed of so that it does not form a part of the testator's estate, at the time of his death, the legacy is extinguished or adeemed, and the legatee's rights are gone.

Analysis

The court analyzed the facts against the backdrop of the established rules on ademption, concluding that the closure of the savings account and the purchase of C.D.s represented a substantive change rather than a mere change in form. The court noted that the funds used to purchase the C.D.s included both the savings account funds and Nora's personal funds, and that Helen's name was not included on the C.D.s, indicating Nora's intent not to bequeath them to Helen.

The probate court in this case used the form/substance test referred to in Jennings v. National Bank of Commerce, supra, in concluding that no ademption occurred. The court said: 'It was the intent of the decedent to leave these funds to [Helen Mayberry] and the purchase of the Certificates of Deposit constituted only a change in form and not substance.'

Conclusion

The Supreme Court held that the specific bequest of the savings account had indeed adeemed, reversing the probate court's decision and remanding the case for further proceedings.

We hold that an ademption of the gift of the savings account at Arkansas Bank & Trust Company occurred, and that the probate court clearly erred in finding that only a change in form took place so as not to work an ademption.

Who won?

The Estate of Nora Mayberry prevailed because the Supreme Court found that the specific bequest had adeemed due to the closure of the savings account and the subsequent purchase of C.D.s, which constituted a substantive change.

The Supreme Court held that the specific bequest of the savings account had indeed adeemed, reversing the probate court's decision and remanding the case for further proceedings.

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