Estate of Creed

California Court of Appeal Oct 10, 1967 No. Civ. 8644Published

Before: McCabe

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Holding. A specific testamentary devise is not adeemed by a change in the form of the property if the testator did not intend for the gift to fail, and extrinsic evidence is admissible to determine the testator's intent regarding such a change.

Issues

Whether a specific devise is adeemed when the property is transferred to a corporation controlled by the testator.
Whether extrinsic evidence is admissible to determine if a testator intended to adeem a specific legacy following a change in the form of the property.

Disposition. affirmed

Quotations verified verbatim against the opinion

“A change in the form of property subject to a specific testamentary gift will not effect an ademption in the absence of proof that the testator intended that the gift fail.”

“The rule of law in California as the above cited cases reflect is that a mere change of form of the property described as a specific bequest in the will does not ipso facto constitute an ademption.”

[77]

McCABE, P. J.

Y. L. Creed married Flossie Creed in 1919. Respondent Betty Knoll is the sole surviving child of the marriage. Flossie Creed died in 1942. During the marriage, Y. L. Creed was employed as a contractor and acquired property, including the commercially developed real property hereinafter described as the Bell property. In 1943, Y. L. Creed married appellant Pauline, a divorcee and a long time acquaintance. After the marriage to Pauline, Y. L. Creed was in retirement except for a few jobs in which he was not the contractor. The married couple lived off the income from Y. L. Creed’s Bell property. Pauline did inherit some money. A home was purchased which at the time of Y. L. Creed’s death was in joint tenancy.

In 1949, respondent Betty Knoll married Melvin Knoll. There were four daughters of this marriage, thus, granddaughters of Y. L. Creed.

By a holographic will, dated April 9, 1957, Y. L. Creed specifically devised the Bell property to his daughter, Betty Knoll, in trust for his four grandchildren with a residual clause in favor of Pauline, his wife. By a second holographic will, dated April 8, 1961, Y. L. Creed provided: “I hereby give, devise and bequeath to Betty Lou Knoll my real property located at 6215 and 6225 Atlantic Blvd., Bell, Calif. This property to be held in trust by her, for and in behalf of her children, to wit, Valerie, Melisse, Denise and Lori, and any other child that may be born to her, until the youngest child arrives at the age of 21 years.

“The rest of my property and estate to go to my wife Pauline B. Creed.” In the 1961 will, Melvin Knoll was named as executor of the will. In May 1963, Mr. Creed mailed the 1961 will to his daughter, Betty Knoll. Pauline did not know of any will until after the death of Mr. Creed.

After the receipt of the 1961 will, Melvin and Betty Knoll became concerned with the estate and inheritance tax consequences of such a bequest and suggested the Bell property be transferred to a corporation and the stock of the corporation transferred to the children in tax-free

inter vivos

gifts. An attorney was retained to form the corporation. In mid-1963, Mr. Creed and Pauline visited the Knolls at their Lake Tahoe home and there Mr. Creed allegedly executed the Articles of Incorporation which were thereafter filed on September 19, 1963. The corporation was authorized to and did issue in escrow 465 shares to Y. L, Creed, In January 1964, four

Estate of Creed

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