In the Matter of the Supervised Admin. of the Estate of Cora E. Young, Terry Douthitt, Kelly Douthitt, and Kevin Douthitt v. Theodore R. Young
2013 Ind. App. LEXIS 273
| Ind. Ct. App. | 2013Background
- December 17, 1976: Cora Young executed a will naming a specific bequest of a Bloomington residence to Dennis Douthitt (Item Two).
- Item Five of the will leaves the residuary to Theodore R. Young, with a contingent provision that any property not attributable to items one and two passes to Dennis if Theodore predeceases or not.
- Dennis predeceased Cora; grandchildren, as Dennis’s issue, would stand in his shoes per intestacy logic, but were not named in the will.
- Cora sold the Bloomington residence to the State of Indiana on May 2, 2012; the sale proceeds were not paid before her death.
- Cora died testate on June 26, 2012; the sale proceeds were later argued to be either for Theodore or the residuary beneficiaries.
- Trial court held the Bloomington property was adeemed by extinction and the sale proceeds pass to Theodore; grandchildren appealed and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Bloomington bequest was adeemed by extinction | Douthitts argue the residuary clause should exclude the Bloomington sale proceeds | Young contends the bequest underwent ademption; proceeds pass via residuary | Bequest adeemed; proceeds go to residuary beneficiary Theodore R. Young |
| How the form-and-substance test applies to ademption | Douthitts contend the item-two sale proceeds are not within the residuary exception | Young argues change in substance (real property to sale proceeds) triggers ademption | Form-and-substance test supports ademption; proceeds belong to residuary (Theodore) |
| Whether Funk v. Funk applies to discern testator’s intent | Funk should be used to discern intent in this living-testament context | Funk is distinguishable because testator divested before death | Funk not applicable; distinction warranted; proceeds still pass to Theodore |
Key Cases Cited
- In re Estate of Warman, 682 N.E.2d 557 (Ind. Ct. App. 1997) (form-and-substance ademption analysis for specific bequests)
- Pepka v. Branch, 294 N.E.2d 141 (Ind. App. 1973) (modern rule for ademption; two-step test)
- Scher v. Stoffel, 58 N.E.2d 118 (Ind. App. 1944) (proceeds from adeemed bequest pass through residuary clause)
- Funk v. Funk, 563 N.E.2d 127 (Ind. Ct. App. 1990) (distinguishing cases where intent may be discerned in different circumstances)
- Kemp v. Kemp, 154 N.E.2d 505 (Ind. App. 1926) (admission that ademption does not apply to real estate in some contexts; distinguishable here)