Diaz v. Duncan, 3-1178A298
| Decision Date | 30 June 1980 |
| Docket Number | No. 3-1178A298,3-1178A298 |
| Citation | 406 N.E.2d 991 |
| Parties | John S. DIAZ, Administrator with Will Annexed of the Estate of Christina S. Shannon, Deceased and Genevieve A. Lawson, Appellants, v. Suzanne DUNCAN and Gregory Scott Duncan, Appellees. |
| Court | Indiana Appellate Court |
Diaz, Moore & Mishler, Portage, for appellants.
John P. Bushemi, Merrillville, for appellees.
Appellant John S. Diaz, 1 Administrator with Will Annexed of the Estate of Christina B. Shannon, appeals from the trial court's judgment in favor of two heirs, Suzanne Duncan and Gregory Scott Duncan, Appellees herein, which judgment sustained four of their six objections to the proposed Final Accounting and Final Distribution of the assets in the estate.
We affirm.
The decedent, Christina Shannon, who died on April 7, 1977, had two daughters during her lifetime, Genevieve Lawson and Christine Weiler. Christine Weiler died in February 1975 with her daughter, Suzanne Duncan, and grandson, Gregory Scott Duncan, surviving her. On May 11, 1977 the deceased's last will and testament was admitted to probate and John Diaz appointed administrator with the will annexed. On March 31, 1978 Diaz filed his report in final settlement of the estate and, after the Duncans filed written objections thereto, a hearing was held on August 9, 1978. The trial court sustained four of the Duncans' six objections and ordered distribution of the decedent's estate accordingly. Essentially, the court held the Duncans were entitled to the value of the specific bequests in the will which had been converted to other property during the guardianship of decedent created approximately six months before her death. Diaz raises the following issues:
1. Did the trial court err in ordering the funds received by the estate from two guardianship accounts of the decedent distributed according to the specific bequests of her will and, further, in applying the anti-lapse statute to the residue?
2. Did the handwritten insertion in the will of the word "Great" before the typed language "grandson Gregory Scott Duncan" void the provision as to Gregory Scott Duncan or, in the alternative did the fact that the specific bequest to Gregory Scott Duncan appeared in the will after provision had been made for distribution of the residue of the estate render such bequest void?
3. Did the trial court err in granting a continuance of the hearing on the administrator's final account and proposed distribution in order to allow the Duncans to file objections?
The Last Will and Testament of Christina B. Shannon provided:
"I, Christina B. Shannon, at this time a resident of Hobart, Lake County, Indiana, and being of sound and disposing mind and memory, do make, publish and declare this to be my Last Will and Testament, hereby revoking all former wills by me made:
Item 1. I request that all of my debts and funeral expenses be paid.
Item 2. I give and bequeath to my daughter Christine Weiler the following-named real estate and personal property, viz,
(a) The real estate known as 605 West Third Street, in Hobart, Indiana.
(b) All of my household furniture, goods and effects, except the bedding.
(c) My fur coat.
(d) One-half of the money in the U.S. Steel Corporation (Gary Works) Merchant Mill Credit Union.
(e) One-half of the money in my checking account.
(f) All of the money in our joint bank accounts.
(g) One-half of the rest, residue and remainder of my estate not disposed of by this my Will.
Item 3. I give and bequeath to my daughter Genevieve A. Lawson the following-named personal property, viz,
(a) The bedding in my home at 605 West Third Street, Hobart, Indiana.
(b) One-half of the money in my checking account.
(c) One-half of the money in the U.S. Steel Corporation (Gary Works) Merchant Mill Credit Union.
(d) One-half of the rest, residue and remainder of my estate not disposed of by this Will.
Item 4. I give and bequeath to my Great 2 grandson Gregory Scott Duncan all of my shares of U.S. Steel Corporation stock.
Witness my hand and seal this 15th day of Sept., 1969.
/S/ Christina B. Shannon"
Before Mrs. Shannon's death on April 7, 1977 two events of significance occurred. Her daughter, Christine Weiler, the devisee under Item 2 of the will, died in February, 1975. Secondly, less than six months before Mrs. Shannon's death, on November 10, 1976 she was declared incompetent and a guardian of her real and personal property appointed. The guardian, Genevieve Lawson opened two guardianship bank accounts to which she transferred the credit union account ($8,082.48), proceeds from her joint savings account 3 in Hobart Federal Savings and Loan Association ($9,039.39) and the proceeds from the sale of 198 shares of U.S. Steel Corporation stock ($9,145.12) for a total of $26,266.99. There is no record that any other accounts, such as checking accounts, existed at the time the guardianship was opened.
In his final account, Diaz reported to the court he had available for distribution, after adjustments for receipts and disbursements during distribution, assets in the amount of $58,843.49, which consisted of real estate with a value of $25,000.00 and $33,843.49 in cash. Significantly, in his final account and proposed distribution, Diaz honored the provisions of the Indiana anti-lapse statute, Ind.Code 29-1-6-1(g)(2), by acknowledging Suzanne Duncan was entitled to the real estate (Item 2(a)), the household furniture, goods and effects (Item 2(b)) and the deceased's fur coat (Item 2(c)) as the surviving descendant of the original legatee Christine Weiler, her mother, who had predeceased the testator. However, he disregarded both the anti-lapse statute and Ind.Code 29-1-18-44, (which preserves the right of a legatee to take the value of property specifically bequeathed him where such property has been sold or transferred by a guardian) by proposing that all of the remaining personal property consisting of $29,219.59 be distributed to Genevieve Lawson as the surviving residuary legatee. He requested the court to make the following distribution:
"PROPOSED PAYMENT OF
ATTORNEY FEES AND FINAL
DISTRIBUTION
Diaz, Moore & Mishler, Attorneys
attorney fees for estate ........... $ 4,523.90
Suzanne Duncan, Hobart, Indiana
final distribution ................. 25,100.00
Real Property $25,000.00
Personal Property 100.00
Genevieve Lawson, Gary, Indiana
final distribution ................. 29,219.59
Personal Property: $29,219.59
TOTAL PAYMENT OF
ATTORNEY FEES and
FINAL DISTRIBUTION ................. $58,843.49"
The trial court, after hearing, took a different view and honored the specific bequests to Suzanne Duncan and Gregory Scott Duncan despite the intervention of the guardianship transfers. Further it applied the anti-lapse statute to the residuary and granted Suzanne Duncan half thereof. After adding an inheritance tax refund of $613.49 to the assets remaining for distribution, he directed distribution to be made as follows:
"New Total assets for
distribution $59,456.59
----------
Distributable
To attorney fees $ 4,523.90
To Suzanne Duncan:
Item 2(a) of Will (real estate) 25,000.00
Item 2(b) & (c) of Will (household
furniture & goods & coat) 100.00
Item 2(d) of Will (1/2 of credit
union account) 4,041.24
Item 2(f) of Will (savings and
loan account) 9,039.39
Item 2(g) of Will (1/2 of residue) 1,782.85
----------
TOTAL $39,963.48
subject to inheritance tax thereon.
To legal guardian of Gregory
Scott Duncan, a minor
Item 4 of Will (U. S. Steel
Stock) 9,145.12
subject to inheritance tax thereon.
To Genevieve Lawson:
Item 3(c) of Will (1/2 of credit
union account) 4,041.24
Item 3(d) of Will (1/2 of residue) 1,782.85
----------
TOTAL $ 5,824.09
Directing our attention first to the claim by Diaz that the trial court improperly distributed the savings and loan and credit union accounts, we find Diaz challenged such distributions in his Motion to Correct Errors solely on the basis that there was no evidence showing the existence of such accounts at the time of decedent's death. 4 Here, Diaz seeks to invoke the doctrine of ademption which was defined and explained In re Estate of Brown, (1969) 145 Ind.App. 591, 604, 252 N.E.2d 142, 150-51, as follows:
"The definition of ademption most generally accepted by the courts, in substance, is the one set out in 96 C.J.S. Wills § 1172, p. 985, which reads as follows:
' "Ademption" is the term used to describe the act * * * by which a specific legacy has become inoperative because of the withdrawal or disappearance of its subject matter from the testator's estate in his lifetime.'
However, Diaz, in his briefs before this Court, makes no mention of Ind.Code 29-1-18-44, a statute concerning guardianships of incompetents, the provisions of which are applicable in this cause and preclude the ademption of the specific legacies in question. This statute reads:
"In case of the guardian's sale or other transfer of any real or personal property specifically devised by the ward, who was competent at the time when he made the will but was incompetent at the time of the sale or transfer and never regained competency, so that the devised property is not contained in the estate at the time of the ward's death, the devisee may at his option take the value of the property at the time of the...
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