In re Estate of Akerson
960 N.W.2d 719
Neb.2021Background
- Nelda M. Akerson’s 2011 will devised $875,000 “to HAMILTON MANOR... for its unrestricted use, as determined by its Board of Directors,” and described the devises in that article as charitable bequests.
- Hamilton Manor was a county-owned, board-operated skilled nursing facility in Hamilton County; the board may accept devises and carry out conditions of gifts under Neb. Rev. Stat. § 23-3504(2).
- On December 1, 2016, Hamilton County and the Manor’s board entered an Agreement with QCS to construct a new facility and transfer bed licenses; the Agreement contemplated Hamilton Manor continuing operations until the new facility opened (planned March 2018).
- Akerson died June 6, 2017; at that date Hamilton Manor was still operating. The new facility opened and Hamilton Manor closed in April 2018.
- The county court held the $875,000 bequest lapsed and ordered distribution to the residuary; Hamilton County and the board appealed. The Nebraska Supreme Court reversed, holding the devise vested at death and awarding interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the charitable bequest to Hamilton Manor lapse before vesting? | Ronald: The Agreement rendered Hamilton Manor unable to carry out the charitable purpose, so the gift failed. | Hamilton County/Board: Manor was operating at death and thus the devise vested; a future closure does not defeat vesting. | Court: Gift vested at testator's death; did not lapse. |
| If the gift failed, should funds go to residuary or be applied cy pres to a similar charity? | Ronald: If failed, distribute to residuary per will. | Hamilton County/Board: If failure, apply cy pres and award to similar local charity. | Court: Not reached—no cy pres because gift valid. |
| Are appellants entitled to interest on the pecuniary devise and from what date? | Ronald: Interest claim is qualified; delay caused by probate proceeding may excuse interest. | Hamilton County/Board: Interest accrues under § 30-24,102; personal representative’s petition caused delay. | Court: Awarded interest at legal rate (12% p.a.) from Jan 5, 2019 (one year after appointment). |
Key Cases Cited
- In re Estate of Harrington, 151 Neb. 81 (1949) (held a nonfunctioning seminary could not carry out will’s purposes; court distinguished Harrington on facts and wording)
- In re Estate of Barger, 303 Neb. 817 (2019) (Nebraska rule that a will speaks at testator’s death and property vests at death)
- Allebach v. City of Friend, 118 Neb. 781 (1929) (construed a bequest as conditional to erect a hospital and addressed forfeiture for failure to perform)
- Wood v. Lincoln General Hospital Assn., 205 Neb. 576 (1980) (charitable intent and construing gifts to charitable institutions)
- In re Boston Regional Medical Center, Inc., 410 F.3d 100 (1st Cir. 2005) (addressing continuity and administration of charitable gifts when institutions change operations)
- In re Estate of Lind, 314 Ill. App. 3d 1055 (2000) (stating rule that discontinuance of active functions after will execution does not defeat a vested gift if identity continues)
- Trustees of Dartmouth College v. Quincy, 357 Mass. 521 (1970) (discussing charitable gift construction and remedies when purposes become difficult to achieve)