Opinion ID: 2078029
Heading Depth: 2
Heading Rank: 2

Heading: Effect of Sale of Specifically Devised Property by Attorney-in-Fact if Mary was Competent at Time of Sale.

Text: In the alternative, assuming that Mary was competent at the time of the duplex's sale, the question arises as to whether an ademption should occur based, not upon the act of the attorney-in-fact in selling the property, but upon the intent of the testator expressed prior to the sale. Specifically, the estate claims that Mary on Memorial Day 1998 knew that her assets would need to be sold for her support and specifically approved of the sale of her residence by her attorney-in-fact. There appears to have been no specific discussion, however, of the sale of the duplex at any time. Further, it is conceded that Mary had no knowledge of the actual sale of the duplex over five years later. Nancy simply sold it without telling her mother in order to avoid aggravating her condition. We do not question the wisdom of Nancy's decision to sell the property without consulting Mary. Our only concern is the legal consequences that flow from it. This case thus raises the question of what result should occur where the principal is competent, but the attorney-in-fact sells a specific devise without the knowledge of the testator. If Mary was aware of the transaction, was aware of the impact the transaction had on her estate plan, and did not change her will, ademption would, of course, occur under the identity theory. Here, however, Mary only had a general knowledge that assets may need to be sold for her support at some time in the future. This is simply not the same as contemporaneous knowledge that an asset that is subject to a specific devise has, in fact, been removed from the estate. Most ordinary persons would not run down to the lawyer's office to change their will in light of a remote future contingency that has not been specifically discussed and which may or may not occur in the future. An expression of intent in the indefinite future to sell assets for support is not sufficient to cause ademption under our modified intention theory where the testator is not aware that the specific action has taken place. See Restatement (Third) of Agency: Knowledge Requisite to Ratification § 4.06 (2006) (ratification of acts of principal requires full knowledge of underlying transaction); Ellwood v. Mid States Commodities, Inc., 404 N.W.2d 174, 179 (Iowa 1987). It is true that Nancy did not sell the duplex until all other sources of revenue had been exhausted for her mother's support. It may well be that, under the circumstances, her mother would have assented to the sale of the duplex in 2003 had she been asked. But under our cases, the relevant issue is not whether Mary would have assented to the sale had she been asked, but rather whether Mary had the opportunity to change her will once she knew that the duplex was no longer part of her estate. Under the record here, she simply did not have that opportunity. There remains a question of remedy. Gretchen seeks to recover $72,625, or half the proceeds realized upon the sale of the duplex. Some courts have held that where ademption does not occur, the devisee is entitled to the entire value notwithstanding the fact that the proceeds may have been used for the care of the testator. In re Estate of Mason, 62 Cal.2d 213, 42 Cal.Rptr. 13, 397 P.2d 1005, 1007 (1965). We have considered the issue, however, and have held that in cases where specific devises are removed from the estate as a result of an involuntary act, the devisee is entitled only to the proceeds which have not been expended on the support of the testator. Stake v. Cole, 257 Iowa 594, 599-600, 133 N.W.2d 714, 717 (1965). We see no reason to depart from Iowa precedent. As a result, Coy is entitled to $52,158.69.