In re Estate of Akerson
309 Neb. 470
| Neb. | 2021Background
- Nelda M. Akerson executed a will (2011) leaving $875,000 “to HAMILTON MANOR … for its unrestricted use, as determined by its Board of Directors,” described elsewhere in the will as a charitable bequest.
- Hamilton Manor was a county-owned nursing home operated by Hamilton County through a board of trustees; it remained operational on Akerson’s death (June 6, 2017).
- In December 2016 Hamilton County and the board signed an Agreement with QCS to construct a new facility and, after the new facility opened (projected by March 2018), to transfer bed licenses and close the existing Hamilton Manor. Closure occurred in April 2018.
- The will was admitted to probate in January 2018; Ronald E. Akerson was appointed personal representative and initially reported the $875,000 charitable devise in estate tax filings.
- In September 2019 Ronald petitioned the probate court to construe the will, claiming the charitable bequest had failed and should revert to the residuary; Hamilton County/board (and the State as intervenor) opposed, asserting the devise vested. Case tried on stipulated facts.
- The county court found the bequest lapsed and ordered distribution to the residuary; the Nebraska Supreme Court reversed and remanded with directions to pay the devise to Hamilton County/board with interest.
Issues
| Issue | Plaintiff's Argument (Ronald) | Defendant's Argument (Hamilton County & board; State) | Held |
|---|---|---|---|
| Did the charitable bequest lapse because the Agreement made Hamilton Manor unable to carry out the gift? | Agreement terminated the charitable purpose; Hamilton Manor effectively ceased to perform, so the legacy failed. | Hamilton Manor was functioning at testatrix’s death and was capable/willing to receive and use the gift; the Agreement did not defeat vesting. | Reversed: gift vested at death and did not lapse. |
| Was the probate court correct to rely on In re Estate of Harrington to find lapse? | Harrington supports finding a nonfunctioning donee cannot take. | Harrington is distinguishable on the will language and facts; Hamilton Manor existed and operated at death. | Distinguished Harrington; probate court erred. |
| If the gift had failed, should cy pres be applied (award to a similar charity) rather than residuary? | (Alternative) If the devise failed, reversion to residuary is consistent with intent. | (Alternative) If lapse, cy pres should allocate to similar local charitable purpose. | Court did not reach cy pres because gift valid; cy pres unnecessary. |
| Are defendants entitled to interest, and from what date and rate? | Ronald: interest should be qualified/avoided because his construction petition caused delay. | Defendants: interest applies under §30-24,102; personal representative’s petition does not excuse interest. | Interest awarded at legal rate (12% per annum) under §30-24,102, accruing from Jan 5, 2019 (one year after PR appointment). |
Key Cases Cited
- In re Estate of Barger, 303 Neb. 817, 931 N.W.2d 660 (2019) (will "speaks" at testator’s death; devise vests at death absent contrary provision)
- In re Estate of Harrington, 151 Neb. 81, 36 N.W.2d 577 (1949) (nonfunctioning donee may be unable to take where will conditions require existence/functioning; distinguishable on facts and language)
- Allebach v. City of Friend, 118 Neb. 781, 226 N.W. 440 (1929) (gifts conditioned on use for a specific purpose may operate as a condition subsequent; delay or refusal can cause forfeiture)
- In re Boston Regional Medical Center, Inc., 410 F.3d 100 (1st Cir. 2005) (charitable-devises/impossibility doctrine and courts’ duty to preserve charitable gifts when possible)