Stenkamp v. Stenkamp

• Decision Date: 06 August 1986
• Docket Number: D-5125
• Citation: 723 P.2d 336,80 Or.App. 550
• Parties: In the Matter of the Estate of John W. Stenkamp Deceased. Dorothy L. STENKAMP, Personal Representative, Appellant, v. Michael STENKAMP, Patricia Whitehurst and Robert Stenkamp, Respondents. ; CA A36805.
• Court: Oregon Court of Appeals

Page 336

723 P.2d 336

80 Or.App. 550

In the Matter of the Estate of John W. Stenkamp Deceased.

Dorothy L. STENKAMP, Personal Representative, Appellant, v. Michael STENKAMP, Patricia Whitehurst and Robert Stenkamp,

Respondents.

D-5125; CA A36805.

Court of Appeals of Oregon.

Argued and Submitted April 14, 1986.

Decided Aug. 6, 1986.

Milo Pope, Mt. Vernon, argued the cause for appellant. With him on the briefs were Kilpatricks & Pope, Mt. Vernon.

Maxwell Merrill, Bend, argued the cause for respondents. With him on the brief was Merrill & O'Sullivan, P.C., Bend.

Before WARDEN, P.J., and VAN HOOMISSEN and YOUNG, JJ.

VAN HOOMISSEN, Judge.

Decedent's wife, who is also his personal representative, appeals the probate court's distribution of a specific devise to decedent's children. She contends that the trial court erred in concluding that the gift had not been adeemed. On de novo review, ORS 19.125(3), we affirm. ¹

Decedent's will gave his three children "[m]y interest in the investment plan with United States National Bank of Oregon" (USNB). After providing for other distributions, the will gave his wife the residue of his estate. The plan referred to in the will was a retirement investment plan provided by decedent's employer, USNB. It was funded by employe contributions made through payroll deductions, which would be distributed in cash on retirement, and by employer contributions used by the plan trustee to purchase bank stock. Decedent was entitled to vote the shares purchased by the trustee on his behalf. Both the cash and the stock were held in a trust administered by USNB's trust department.

When decedent retired in February, 1977, his interest in the plan, both the cash and the stock, was automatically distributed to him. He made no change in the stock. When he died in April, 1984, his estate included 1,656 shares of USNB stock: the 831 shares distributed to him on his retirement, plus additional shares received as stock dividends. ² The trial court concluded that, because the stock was still in existence at the time of his death, and because there was no evidence that decedent intended to change the disposition of the property involved in the investment plan, the specific devise had not adeemed. Accordingly, the court ordered that the stock be distributed to the children.

Decedent's wife contends that the specific devise had adeemed. She argues that the gift of an interest in the investment plan was a specific devise and that, because the subject of the interest no longer existed at the time of decedent's death, as he no longer held an interest in the investment plan, the gift had been adeemed. The children argue that decedent made no voluntary change in the investment plan, that the only change made was that the funds were automatically transferred to him at the time of his retirement, that that change was one of form, not of substance and that, under the rule established in Biss v. Parrish, et al., 232 Or. 26, 374 P.2d 382 (1962), the devise has not been adeemed.

A specific devise is a gift of the thing itself, in whole or in part, so that only that thing may be burdened. Skousen, Adm. v. Roelfs, 209 Or. 521, 525, 307 P.2d 324 (1957). A specific devise is subject to ademption by alienation or destruction of the fund from which it is to be paid. 209 Or. at 525, 307 P.2d 324. We agree that the gift of decedent's interest in the retirement fund was a specific devise. However, we do not agree that the gift has been adeemed. ³

Two exceptions to the rule of ademption have developed to avoid harsh results. One arises when the testator is incompetent and the change in the fund was made by a guardian. The second arises when the change in the fund is one of form and not of substance. Both exceptions are recognized in Oregon. See Biss v. Parrish, et al., supra, 232 Or. at 33-34, 374 P.2d 382, where the court applied the change by a guardian exception to a devise which had been affected by a fund transfer made by the Secretary of the Interior under a statute enacted to protect the assets of native Americans. The court held that, although there was no showing that Biss was incompetent at the time the funds were transferred, "the manner and method of the transfer of the funds were beyond her control. For all intents and purposes it was just as though the funds had been transferred by a guardian." In this case, as in Biss, decedent's competence was not an...