In re Estate of Akerson
309 Neb. 470
| Neb. | 2021Background
- Nelda M. Akerson executed a will in 2011 leaving $875,000 "to HAMILTON MANOR . . . for its unrestricted use, as determined by its Board of Directors," and called the provision a "charitable bequest." She died June 6, 2017.
- Hamilton Manor was a county-owned nursing home operated by Hamilton County through a board of trustees; it was operating on the date of Akerson’s death.
- In December 2016 Hamilton County and the board entered a Consulting and Bed Transfer Agreement with QCS to construct a new facility and transfer licenses; Hamilton Manor closed in April 2018 and its real property was later sold.
- Ronald E. Akerson, personal representative, initially listed Hamilton Manor as the charitable beneficiary in estate tax filings but later petitioned the probate court (Sept. 2019) seeking construction of the will and a determination that the $875,000 devise had failed and should pass to the residuary.
- The county court found the bequest lapsed and ordered distribution to the residuary; Hamilton County and the board of trustees appealed, and the Nebraska Supreme Court reversed and remanded with directions to distribute the $875,000 to Hamilton County and the board of trustees with interest.
Issues
| Issue | Plaintiff's Argument (Ronald) | Defendant's Argument (Hamilton County / Board) | Held |
|---|---|---|---|
| Did the charitable bequest lapse because the Agreement made Hamilton Manor unable to carry out the charity? | Agreement showed Manor would cease its charitable function before gift could be used → lapse. | Manor was operating at testatrix's death; vesting occurs at death; future closure irrelevant. | Gift vested at death; did not lapse. |
| If gift failed, should cy pres or residuary distribution apply? | Treat devise as failed and distribute to residuary. | If not vested, apply cy pres to a similar local charity rather than residuary. | Court did not apply cy pres because gift was valid and could be carried out. |
| Are appellants entitled to prepayment interest, and is personal representative liable? | Ronald argued delay justified; interest may be excluded when delay caused by will contest or litigation. | Statute mandates interest on pecuniary devises; PR’s petition caused delay. | Interest awarded at legal rate (12% p.a.) from Jan 5, 2019; personal representative responsible. |
Key Cases Cited
- In re Estate of Barger, 303 Neb. 817 (2019) (will-interpretation and vesting principles)
- In re Estate of Harrington, 151 Neb. 81 (1949) (distinguishing nonfunctioning beneficiary where will created contingency)
- Allebach v. City of Friend, 118 Neb. 781 (1929) (condition-subsequent / forfeiture principles for charitable gifts)
- Wood v. Lincoln General Hospital Assn., 205 Neb. 576 (1980) (treatment of charitable gifts and failure of purpose)
- Garwood v. Drake University, 188 Neb. 605 (1972) (courts favor carrying out charitable devises)