McGee v. McGee



Procedure: Administrator brought action for declaratory judgment with respect to will provisions relating to payment of debts and distribution of assets of estate

Facts: Claire McGee's will contained a devise of $20,000 to her friend Hurd (D). The will also directed that her grandchildren (D) were to receive her shares of Texaco stock and "all of [her] monies, standing on deposit in [her] name, in any bank." Shortly before Claire's death, her son, McGee (P), who had a power of attorney, withdrew approximately $50,000 from his mother's bank accounts. Some of the money withdrawn was used for Claire's needs, but almost $30,000 was applied to the purchase of "flower bonds," which could be used to reduce estate tax liability.
After Claire's death, her estate did not contain sufficient assets to satisfy the gifts to both the (D's). McGee brought a declaratory judgment action to determine whether the specific legacy to the grandchildren should be paid first, from the proceeds of the sale of the bonds, or whether the proceeds should be used to pay the bequest to Hurd. The grandchildren argued that their grandmother's intent was to benefit her family and that the bequest to them should be paid first. PL argued against ademption of the gift to the grandchildren, saying that he, not his mother, purchased the bonds. McGee (P) also argued that the bonds were the same as "monies on deposit," since they were liquid, and they were purchased with money that was on deposit.

Issue: Should the bonds purchased with money from the bank account be sold to satisfy the testator's bequest of moneys in her accounts to her grandchildren ?

Rule: In deciding cases of possible ademption by extinction, the court first considers whether a gift is a specific legacy and then, if so, whether the property is still part of the estate at the time of the testator's death.

Holding: The Superior Court, Providence and Bristol Counties, Shea, J., entered judgment, and appeal was taken. The Supreme Court, Weisberger, J., held that: (1) where will bequeathed money owned by testator on deposit in her name, “in any bank,” legacy was sufficiently susceptible of identification to render it specific legacy, even though the amount of such funds was unspecified and the legacy did not name any particular bank, and (2) where it appeared that testatrix' intention, manifest on face of will, was that her grandchildren receive only money in her bank accounts and not money's proceeds or investments that represented conversion of such money into other holdings, and no sums of money remained on deposit in such bank accounts following purchase of United States Treasury Bonds prior to testatrix' death, change effected by purchase of the bonds with the funds previously deposited in the bank accounts was not merely formal but was substantial, and thus specific legacy to the grandchildren was adeemed. Appeal sustained, judgment reversed, and cause remanded.