In re The Estate of Mason R. Foertsch, Debra S. Foertsch v. Marcus Foertsch, David Foertsch, and Brian Foertsch
74A05-1702-ES-375
| Ind. Ct. App. | Dec 7, 2017Background
- Decedent executed a will (2005) and three codicils (2006, 2007, 2009) that specifically bequeathed “any and all funds” held at certain investment firms (later amended to include Merrill Lynch) to a trustee for a Q-TIP trust benefiting his spouse during life and grandsons as remainder beneficiaries.
- Decedent’s broker (originally at Advest, later at Merrill Lynch) moved employment to Raymond James in 2008; Decedent had Merrill Lynch transfer his account to Raymond James in kind at that time.
- The account continued to be actively managed by the same broker; Decedent received income from the account, made purchases/sales, occasional deposits, and never withdrew corpus for personal use.
- Decedent died in 2015; by then the account was held at Raymond James (not Merrill Lynch). The estate’s personal representative petitioned whether the specific bequest of the Merrill Lynch account had been adeemed by extinction.
- The trial court found no ademption: the transfer of the entire account in kind to Raymond James was a change in form, not substance, so the Raymond James account passes into the Q-TIP trust per the will. Appellant (spouse) appealed.
Issues
| Issue | Appellant's Argument | Appellees' Argument | Held |
|---|---|---|---|
| Whether the specific bequest of “any and all funds” at Merrill Lynch was adeemed when the account was transferred in kind to Raymond James | Debra: the account’s contents and transactions after transfer show the subject of the bequest changed in substance, so ademption occurred and funds pass to residuary (benefit spouse) | Grandsons/PR: the account was transferred intact in kind and continued to operate the same way under the same broker; this is a change in form only, so no ademption and funds go to the Q-TIP trust | Court: No ademption. Transfer in kind to new brokerage was a mere change in form; specific bequest survived and funds pass to the Q-TIP trust. |
Key Cases Cited
- Pepka v. Branch, 294 N.E.2d 141 (Ind. Ct. App. 1973) (adopted Modern Rule; conversion of sole proprietorship to corporation was a formal, not substantial, change)
- Weaver v. Schultz, 380 N.E.2d 601 (Ind. Ct. App. 1978) (specific bequest adeemed where insurance proceeds became property/cash—change in substance)
- In re Estate of Young, 988 N.E.2d 1245 (Ind. Ct. App. 2013) (specific real property sold before death was adeemed; proceeds do not preserve the bequest)
- In re Estate of Warman, 682 N.E.2d 557 (Ind. Ct. App. 1997) (settlement proceeds spent on disparate items constituted change in substance and resulted in ademption)
- In re Estate of Geary, 275 S.W.3d 835 (Tenn. Ct. App. 2008) (account moved intact to new brokerage under new number preserved the specific bequest; change was formal and nominal)