Beneficiary Issues

Question 1

What is the purpose of NY’s anti-lapse statute?

Answer 1

General rule = If a benefiicary DIES during the testator’s lifetime, the gift to the beneficiary LAPSES (i.e. fails), UNLESS the gift is SAVED by an anti-lapse statute

Question 2

What are the 2 reqs for the application of NY’s anti-lapse statute?

Answer 2

In NY, a gift does NOT lapse, but VESTS in the deceased beneficiary’s ISSUE IF: 1) the predeceased beneficiary was the testator’s ISSUE or NATURAL SIBLING (i.e. brother/sister); AND 2) the predeceased beneficiary LEAVES an ISSUE that survives the testator NOTE: Does NOT apply if condition precedent(i.e. “if he survives me”) is used

		If "adopted-out" childis SPECIFICALLY listed as beneficiary in Will →adopted-out child’s issue can take under anti-lapse statute									REMEMBER: normally adopted out children have NO inheritance rights from the birth parents OR family

		DOES NOT APPLY TO SPOUSE (even if the predeceased beneficiary leaves a will giving everything to that spouse!)

Question 3

What is the effect if a beneficiary “disclaims” a gift?

Answer 3

Same as w/ intestacy→ a disclaimant is CONSIDERED to have PREDECEASED the testator NY’s anti-lapse statute applies IF (i) the disclaimant is an ISSUE or SIBLING of the testator; AND(ii) the disclaimer leaves a surviving ISSUE→ gift goes to issue

Question 4

What is the Surviving Residuary Beneficiary Rule?

Answer 4

Absent CONTRARY provision in the Will… When RESIDUARY is devised to 2 or more persons & gift to 1 fails/lapses (& anti-lapse does NOT apply) → then OTHER residuary beneficiaries take the entire residuary estate, in proportion to their interest in the residue NOTE: if anti-lapse statute APPLIES, then the gift passes to the ISSUE

Question 5

What is the rule re: gifts to a “generic class”, which has a predeceased member?

Answer 5

Absent a contrary prvn in the Will…. If the Will makes a gift to a group of persons as a “generic” class (i.e. gift to “children”, “siblings”, etc) AND some members of that group PREDECEASE the testator → the SURVIVING class members TAKE in equal share BUT, IF NY’s anti-lapse statute applies (i.e. member is ISSUE or SIBLING of testator AND leaves a surviving issue) → the share GOES to the predeceased member’s ISSUE

		NOTE: if the gift was "INDIVIDUALLY" named (i.e. not as a class), then the lapsing share will go to the RESIDUARY (unless anti-lapse applies)

Question 6

What 2 groups CANNOT take part of a class gift?

Answer 6

The 2 groups are… 1) “Adopted-out” children: if a class gift is to “children”, ANY adopted out children DO NOT take as part of the “class” (REMEMBER: adopted out children have NO inhereitance rights from birth parents OR birth family) BUT, the adopted-out child WOULD take as a class member in the adopting family

2) Later-born class members (after testator OR life tenant dies) are NOT a part of the "class" (i.e. the Rule of Convenience)			BUT, children in GESTATION at time of testator's or life tenant's death ARE class members (Womb Rule)

Question 7

What is the rule when a testator AND a beneficiary die simultaneously?

Answer 7

Revised Uniform Simultaneous Death Act (RUSDA) Absent a Will prvn to the contrary… If a BENEFICIARY and testator die simulatenously (or almost simultaneously) AND there is insufficient CLEAR AND CONVICING evidence to prove the beneficiary has SURVIVED the testator by MORE THAN 120 HRS (5 DAYS)→ PRESUME that the BENEFICIARY has PREDECEASED the testator IF (assumed) predeceased beneficiary is an ISSUE or SIBLING of the testator, then NY’s anti-lapse statute applies (assuming the predeceased beneficiary has left a surviving issue)

Question 8

What is the rule for distributing jointly-held property when both joint tenants die simultaneously?

Answer 8

Revised Uniform Simultaneous Death Act (RUSDA) Assuming both dies w/in 120hrs (5 days)… STEP 1: RUSDA theoretically SEVERS the right of survivorship in the joint property, rendering it a tenancy in common STEP 2: Property of a SPECIFIC co-owner passes as though HE survived the OTHER co-owner, so the property would go to HIS issue NOTE: the distribution would be the SAME for tenants by the entirety and joint bank accounts E.g.H & W die simultaneously & JT w/ right of survivorship. H has 2 children, A & B, from a previous marriage, & a child w/ W. TIC - A, B, & C each take 1/3 of H’s half and then C takes W’s half.

Question 9

What is the effect on a Will if the testator marries after Will is executed?

Answer 9

Marriage AFTER the execution of a Will has NO effect on the validity of the Will, BUT it MAY affect gifts and dispositions under the Will NY law provides for a “right of election” so that a testator CANNOT disinherit his spouse

Question 10

What is the effect on a Will if the testator “unmarries” after Will is executed?

Answer 10

If a ct renders a FINAL decree (i.e. NOT in process) of divorce, annulment or separation (i.e. NOT an agmt) AFTER the execution of a Will, ALL gifts and fiduciary appointments in favor of the former spouse are REVOKED by operation of law EFFECT = read the Will as if the former spouse has PREDECEASED the testator
property that WOULD have passed by operation of law are OVERRULED (i.e. a former spouse couldn’t take an insurance benefit EVEN IF named on the docs)

		NOTE: NY's anti-laspe statute does NOT apply b/c a spouse is NOT an issue or a sibling

EXCLUSIONS:			All gifts and fiduciary appointments in favor of the ISSUE of the former spouse are NOT revoked

		An appointment of the former spouse as GUARDIAN of the couple's children is NOT affected

		If the couple RECONCILES and REMARRY, ALL prvns in favor of the "former" spouse are RESTORED

Question 11

What is the effect of pretermitted children on a Will?

Answer 11

1) If the testator has ONE OR MORE children when the Will was executed; AND… there is NO provision made for ANY child → the pretermitted child INHERITS NOTHING

		the Will made gifts to the other children→ the pretrmitted child SHARES the amt w/ the other children AS IF a CLASS gift was made									The pretermitted child takes from "the other children proportionately, not equally"

		it appears that the testator's INTENTION was to ONLY make a "ltd provision" to the children living at the time the Will was executed→ the pretermitted child takes his INTESTATE share (which will come from other beneficiaries proportionately)

2) If the testator had NO CHILDREN when the Will was executed→ the afterborn child takes his INTESTATE share

Question 12

When does the EPTL protect pretermitted children?

Answer 12

“Pretermitted children” = children born OR adopted AFTER the Will is executed Rule = the EPTL ONLY protected pretermitted children who are… NOT provided for by any settlement; AND

		NEITHER provided for NOR mentioned in the Will