## Facts

- Dorothy B. Magnus executed a will (and later a codicil) that created a testamentary trust for the benefit of her friends, Donald and Gerald Sweeney.
- Article III of the will funded the trust with “all of the shares of the capital stock of Heileman Brewing Company owned by me at the time of my death,” with trust income payable to the Sweeneys for life and the remainder to Saint Mary’s College after the survivor’s death.
- While Magnus was alive, Heileman Brewing Company was acquired, and a corporate transaction resulted in Heileman repurchasing the remaining shares for cash at $40.75 per share.
- The repurchase money was placed in escrow accounts at designated banks; shareholders could obtain payment by presenting and surrendering their stock certificates.
- Before her death, Magnus surrendered certificates representing 17,549 shares and received $715,121.75 in cash.
- Magnus died a few months later; her will and codicil were admitted to probate.
- After her death, the personal representative found additional Heileman stock certificates for 6,749 shares in Magnus’s safe-deposit box.
- The personal representative surrendered those certificates and received approximately $275,000 in redemption proceeds.
- The probate court ruled the Article III stock bequest was fully adeemed because Magnus did not own Heileman “capital stock” at death, and it placed the post-death proceeds from the discovered certificates into the residuary estate.
- The Sweeneys appealed.

## Issues

1. Whether the question of ademption under Minn. Stat. § 524.2-607 is an appealable issue of law on appeal from the probate court’s order.
2. Whether a specific devise of Heileman stock was adeemed (in whole or in part) when Magnus surrendered some stock certificates for cash before death, but other certificates remained in her possession at death and were later exchanged for cash by the personal representative.

## Decision

- The court held that whether ademption occurred under Minn. Stat. § 524.2-607 presented an appealable issue of law.
- The court affirmed the probate court’s result to the extent the devise concerned shares Magnus surrendered and converted to cash during her lifetime; that portion of the specific devise failed.
- The court reversed the probate court’s ruling as to the certificates that remained in Magnus’s possession at death and were discovered afterward; there was no ademption as to those certificates.
- The court remanded for administration consistent with treating the post-death redemption proceeds traceable to the certificates held at death as passing under Article III to the trust rather than to the residue.

## Legal Principles

- A testamentary gift of identified stock “owned by me at the time of my death” is a specific devise governed by Minn. Stat. § 524.2-607.
- Ademption turns on what the testator owned at death and on whether the specifically devised property (or a statutorily recognized substitute directly traceable to it) remains in the estate.
- When the testator voluntarily disposes of specifically devised property during life and receives cash, the specific devise is adeemed to that extent unless the will provides otherwise.
- When the testator still holds the stock certificates at death, and the estate’s later exchange of those certificates merely collects the value associated with them, the post-death collection does not itself cause ademption; the devisee takes the property or its directly traceable proceeds.
- A corporate cash-out transaction that converts shareholder interests into a right to receive escrowed consideration can be treated as a change in form for shares still held at death, so that the beneficiary of the specific devise takes the associated proceeds.

## Conclusion

The Minnesota Court of Appeals held that the Heileman stock devise was adeemed only for the shares Magnus personally surrendered for cash before she died, but not for the shares represented by certificates she still possessed at death; the redemption proceeds collected after death from those certificates belonged to the Article III trust rather than the residuary estate.


In re Estate of Magnus, 444 N.W.2d 295 (1989)