When the Specific Property Is Still Traceable
A specific bequest is a gift of a particular, identifiable asset. "I leave my home at 123 Main Street to my daughter" is a specific item in the will. But what if the home is sold before death, or damaged by fire, or taken through eminent domain? Does the beneficiary lose out entirely?
Arizona law says not necessarily. The beneficiary has a right to certain proceeds and recoveries connected to that property. When ademption occurs because the property is gone, these alternative rights may still apply.
A specific devisee has a right to the specifically devised property in the testator's estate at death and to the following: 1. Any balance of the purchase price, together with any security agreement, owing from a purchaser to the testator at death by reason of sale of the property. 2. Any amount of a condemnation award for the taking of the property unpaid at death. 3. Any proceeds unpaid at death on fire or casualty insurance on or other recovery for injury to the property.
A.R.S. § 14-2606(A)If the property was sold but the buyer still owes money at the time of death, the beneficiary receives that remaining balance. If the property was condemned by the government and the award has not been paid yet, the beneficiary receives that award. If an insurance claim is pending, the beneficiary gets those proceeds.
Special Protection for Sales by a Conservator or Agent
A separate and important protection applies when a specific item was sold by a conservator or by an agent acting under a durable power of attorney for someone who became incapacitated. In that situation, the beneficiary receives a general cash gift equal to the net sale price.
If specifically devised property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal, the specific devisee has the right to a general pecuniary devise equal to the net sale price, the amount of the unpaid loan, the condemnation award, the insurance proceeds or the recovery.
A.R.S. § 14-2606(B)This protection recognizes that the person who wrote the will did not voluntarily choose to sell the property. The sale was made on their behalf because they could no longer manage their own affairs. The law treats the beneficiary as though the gift still exists. It converts the specific bequest from a property gift into a cash equivalent. This protection ends if the person regains capacity and survives for at least one year after a court confirms the capacity has been restored.