Beneficiary Issues Flashcards
What is the purpose of NY’s anti-lapse statute?
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
What are the requirements for the application of NY’s anti-lapse statute?
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!)
What is the effect if a beneficiary disclaims a gift?
Same as with 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
What is the Surviving Residuary Beneficiary Rule?
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
What is the rule re: gifts to a generic class, which has a predeceased member?
Absent a contrary provision 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)
What groups CANNOT take part of a class gift?
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 inheritance 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)
What is the rule when a testator AND a beneficiary die simultaneously?
Revised Uniform Simultaneous Death Act (RUSDA)
Absent a Will provision 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)
What is the rule for distributing jointly-held property when both joint tenants die simultaneously?
Revised Uniform Simultaneous Death Act (RUSDA)
Assuming both dies within 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 with right of survivorship.H has 2 children, A & B, from a previous marriage, & a child with W. TIC - A, B, & C each take 1/3 of H’s half and then C takes W’s half.
What is the effect on a Will if the testator marries after Will is executed?
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
What is the effect on a Will if the testator “unmarries” after Will is executed?
If a court renders a FINAL decree (i.e. NOT in process) of divorce, annulment or separation (i.e. NOT an agreement) 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 provisions in favor of the “former” spouse are RESTORED
What is the effect of pretermitted children on a Will?
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 amount with 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 “limited 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
When does the EPTL protect pretermitted children?
“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
