In re Estate of Akerson
309 Neb. 470
| Neb. | 2021Background
- Nelda M. Akerson’s 2011 will devised $875,000 “to HAMILTON MANOR, Aurora, Nebraska, for its unrestricted use, as determined by its Board of Directors,” and labeled it a charitable bequest.
- Hamilton Manor was a county-owned nursing home operated by a statutory board of trustees; the board explored but did not complete a 501(c)(3) conversion.
- On December 1, 2016, Hamilton County and the board entered a Consulting and Bed Transfer Agreement with QCS to build a new facility and transfer operations; Hamilton Manor continued operating on Akerson’s death date (June 6, 2017) and closed in April 2018 when QCS opened the new facility.
- The personal representative (Ronald Akerson) initially treated the devise as charitable in tax filings, then filed (Sept. 2019) for construction of the will asking the court to declare the bequest failed and distribute the funds to the residuary.
- The county court, on stipulated facts, held the bequest had lapsed and ordered distribution to the residuary; the State intervened on behalf of Hamilton County and the board.
- The Nebraska Supreme Court reversed, holding the devise vested at death, directing distribution to Hamilton County/board, and awarding statutory interest from January 5, 2019.
Issues
| Issue | Plaintiff's Argument (Ronald) | Defendant's Argument (Hamilton County/Board & State) | Held |
|---|---|---|---|
| Did the $875,000 charitable bequest lapse because of the Agreement to close Hamilton Manor after Akerson’s death? | Agreement made Hamilton Manor unable to carry out the charitable purpose; gift therefore ineffective (akin to condition subsequent). | The devise vested at Akerson’s death because Hamilton Manor was operating and capable of receiving/using the gift; future closure does not defeat vesting. | Vesting occurs at death; gift did not lapse. Agreement did not prevent accomplishment of the general charitable intent. |
| If the devise failed, should funds go to the residuary or be administered under charitable doctrines (e.g., cy pres)? | Petitioned to treat devise as failed and distribute to residuary (benefiting PR). | Argues distribution should be to Hamilton County/board; alternatively cy pres to similar charity in county. | No failure occurred; distribution must be to Hamilton County/board as charitable beneficiary; cy pres not required. |
| Are Hamilton County and the board entitled to interest on the pecuniary devise, and if so at what rate and from what date? | PR argued interest entitlement can be qualified where delay caused by will construction litigation or other equitable reasons. | County/board sought interest under § 30-24,102 (statutory rate). | Interest awarded at Nebraska’s legal rate (12%); accrual from one year after PR appointment (Jan 5, 2019) because PR’s petition caused the delay. |
Key Cases Cited
- In re Estate of Barger, 303 Neb. 817, 931 N.W.2d 660 (2019) (will “speaks” at death and property vests at testator’s death absent contrary intent)
- In re Estate of Harrington, 151 Neb. 81, 36 N.W.2d 577 (1949) (distinguished — applied where will conditioned gift on continued functioning and provided alternate disposition)
- Allebach v. City of Friend, 118 Neb. 781, 226 N.W. 440 (1929) (discusses effect of conditions subsequent and forfeiture for failure to carry out specified purpose)
- In re Boston Regional Medical Center, Inc., 410 F.3d 100 (1st Cir. 2005) (authority that discontinuance of active functions does not necessarily defeat a devise if corporate identity continues)
- In re Estate of Lind, 314 Ill. App. 3d 1055, 734 N.E.2d 47 (2000) (prevailing rule that post‑execution discontinuance of activities does not defeat a charitable bequest if identity continues)
- Wood v. Lincoln General Hospital Assn., 205 Neb. 576, 288 N.W.2d 735 (1980) (analysis of charitable intent and application of equitable doctrines to sustain gifts)