CALI - Interpretation of Wills (UPC)

Question 1

Kim executed a will which devised $10,000 each to her friends, Ned and Megan. Ned was deceased at the time the will was executed but had a son, Tim. Megan died after the will was executed but prior to Kim. She was survived by her brother, Lon, to whom she devised her entire estate. Kim’s will devised the residue of her estate to her mother. How should Kim’s estate be distributed?

Answer 1

All to Kim’s mother.

It makes no difference whether Ned was dead at the time the will was executed or died after that time but before Kim. Since Ned was a friend and was not issue of Kim’s grandparents, UPC 2-603 does not apply. The same is true for Megan although it is not clear that the section would have applied in any event since Megan apparently died without issue. Under UPC 2-604, the property passes to the residuary legatee of the will.

Question 2

Now suppose that, in the preceding question, Ned and Megan had been Kim’s cousins instead of just friends. How should Kim’s estate be distributed?

Answer 2

Ned is the issue of Kim’s grandparents. Even though the gift to Ned lapses, a substitute gift is created in favor of Ned’s issue which, in this case, is Tim. Lon cannot take since he is not issue of Megan. UPC 2-603(b). The gift to Megan becomes part of the residue and passes to Kim’s mother. UPC 2-604.

Question 3

Now suppose that Kim had left $10,000 each to Ned and Megan, her cousins, and the remainder to her mother. Suppose further that Ned had two sons, Tim and Tom. Tim predeceased Ned and Ned predeceased Kim. Tim left three children. Tom survived Kim as did Kim’s mother. How should Kim’s estate be distributed?

Answer 3

$1667 each to the children of Tim (Tim’s $5000 split 3 ways); $5,000 to Tom, $10,000 to Megan, and the remainder to Kim’s mother.

Ned predeceased Kim but left descendants so the $10,000 gift to Ned is “saved” for Ned’s descendants by the anti-lapse statute.

See UPC § 2-603.

Question 4

Suppose that Ned survived Kim for two days but then died leaving a will disposing of his estate to his wife. He was survived by his wife and two children. Megan is still living as is Kim’s mother. How should Kim’s estate be distributed?

Answer 4

$10,000 to be divided equally among Ned’s two children; $10,000 to Megan; the remainder of the estate to Kim’s mother.

Even though Ned did physically survive Kim, he did not survive her for 120 hours as required by UPC 2-702. Under that section, he is treated as having predeceased her and his issue take under the rule of antilapse. UPC 2-603.

Question 5

Now assume that Kim’s will left $30,000 to “my nieces and nephews, equally.” At the time the will was executed, Kim had one niece and two nephews. One of the nephews, Mike, predeceased Kim leaving two children. Kim’s will leaves the remainder of her estate to her mother. How should Kim’s estate be distributed?

Answer 5

$10,000 each to the surviving niece and nephew, $5,000 each to the predeceased nephew’s children, and the remainder to Kim’s mother.

Even though this is a class gift, UPC 2-603(b)(2) allows the issue of a predeceased member of a class of descendants of the grandparents of the testator to take the predeceased member’s share by representation. The class gift is thus split three ways with the niece and nephew each taking a third and the two children splitting a third.

Question 6

In the preceding question, if all of the nieces and nephews had predeceased Kim and the niece had two children who survived, one nephew had three children and the other nephew had one child, how should the $30,000 gift be distributed?

Answer 6

$5000 each to the children of the niece; $3333.33 to each of the three children of the first nephew and $10,000 to the child of the second nephew.

While the principle of representation generally treats members of the same generation as equally as possible, the children of the niece and nephews are taking by representation from their parents. Thus the children of the niece take her share and the children of each of the nephews take their parent’s share. UPC 2-603(b)(2).

Question 7

Would the result in the preceding question be the same if the gift, instead of being to nieces and nephews, had been to “my stepchildren?” Assume Kim had three step-children who predeceased her and left issue.

Answer 7

Yes.

Stepchildren is a class to which the antilapse statute applies. See UPC 2-603(b). The result would be exactly the same as if they were related by blood instead of by marriage.

Question 8

Kim’s will left $30,000 to “my nieces and nephews, if they survive me.” Kim had one niece and two nephews, all of whom predeceased her. Her niece left two children, one of the nephews left three children and the other nephew left one child. Kim’s will left the remainder of her estate to her mother. How should the $30,000 bequest be distributed?

Answer 8

$5000 each to the children of her niece; $3333.33 each to the three children of the first nephew; and $10,000 to the child of the second nephew.

Under UPC 2-603(b)(3) words of survivorship are not, in the absence of additional evidence, a sufficient statement of contrary intent to overcome the application of the antilapse rule.

Question 9

Now suppose that Kim’s will left a gift of “$10,000 to my brother, Sean, if he survives me; otherwise to my sister, Lucy.” Sean and Kim were injured in an automobile accident. Kim died first as a result of her injuries and Sean died four days later. Sean left a will disposing of his estate to his church. He was survived by his wife and by a daughter. Lucy survived Kim as did Kim’s mother to whom Kim devised the residuary estate. Under these circumstances, the $10,000 bequest should be distributed to:

Answer 9

Lucy.

Sean is treated as having predeceased Kim since he did not survive her by 120 hours. UPC 2-702. That would ordinarily trigger application of the antilapse statute since Sean is issue of Kim’s grandparents; however, a substitute gift is superseded by an alternative devise. UPC 2-603(b)(4). Thus the alternative devise to Lucy supersedes the substitute gift to Sean’s daughter.

Question 10

Kim devised $30,000 “to my brother, Sean, if he is living at my death; if not, to my sister, Lucy.” He also devised $25,000 “to my sister, Lucy, if she is living at my death; if not, to my brother, Sean.” Both Sean and Lucy predeceased Kim and both left issue who survived Kim. The residue of the estate was devised to Kim’s mother. How should Kim’s estate be distributed?

Answer 10

$30,000 to Sean’s issue; $25,000 to Lucy’s issue; the residue to Kim’s mother.

In this case, each devise contains an alternative disposition and the devises are alternative to each other. Resolution is accomplished by asking to whom the primary devise is given and substituting the children of the primary devisee. Sean’s issue take the $30,000 gift since Sean is the primary devisee. Lucy’s issue take the $25,000 gift since Lucy is the primary devisee. UPC 2-603(c).

Question 11

Kim’s will made the following bequest: “I leave $30,000 to my son, Bill, if he survives me; and if he does not survive me, to his children, Sarah and Dena.” Bill and Sarah both predeceased Kim but Dena survived. Sarah was survived by two children, Lucas and Mariah. How should the $30,000 be distributed?

Answer 11

$7500 each to Lucas and Mariah; $15,000 to Dena.

The devises to Bill and to Sarah both produce substitute gifts under UPC 2-603(b)(1). Those gifts are one-half of Bill’s gift to Sarah and Sarah’s gift to her issue. The alternative devise “to his children, Sarah and Dena” is a younger-generation devise as described in subsection (c)(2). The younger-generation gift prevails under subsection (c)(2). Sarah’s issue take her half and Dena takes the other half.

Question 12

Kim’s will devised $30,000 to “my two grandchildren, Lucas and Mariah, or to the survivor of them.” Lucas and Mariah both predeceased Kim. Both had children who survived Kim. How should the $30,000 be distributed?

Answer 12

Half to the children of Lucas and half to the children of Mariah.

With regard to the half devised to Lucas, UPC 2-603(b)(1) produces a substitute gift to Lucas’s children and a substitute gift to Mariah’s children since the language “or to the survivor of them” creates an alternative devise in Mariah. The contrary is true with regard to Mariah’s half. Under subsection (c)(1), each half passes under the primary substitute gift which is to the children of Lucas as to his half and to the children of Mariah as to her half. Subsection (c)(2) does not apply since Lucas and Mariah are not the descendant of the other.

Question 13

Jim devised $10,000 “to my sister, Jane” and “the rest, residue and remainder of my estate to my friends, John and Ed.” Jane and Ed both predeceased Jim. Jane was survived by her husband, Tim, to whom she devised her entire estate. Ed died intestate and was survived by two children. John survived Jim. How should Jim’s estate be distributed?

Answer 13

All to John.

Jane’s gift will lapse since she predeceased Jim and it cannot be saved by antilapse since she had no issue. It becomes part of the residuary estate. UPC 2-604(a). Where a residuary devise lapses because the devisee predeceases the testator, the other residuary devisees take the entire residuary estate. Here, Ed’s residuary interest cannot be saved by antilapse since Ed was not a descendant of Jim’s grandparents. The entire residuary estate thus goes to John. UPC 2-604(b).

Question 14

Suppose that, in the preceding question, the residuary estate was devised “25% to Ed, 25% to my cousin, Sally, and 50% to John.” Ed and John were Jim’s friends. Ed predeceased Jim and left two children. Sally predeceased Jim and left two children. John survived Jim. How should Jim’s estate be distributed?

Answer 14

One-third to Sally’s children and two-thirds to John.

Ed’s 25% lapses since Ed was not a descendant of Jim’s grandparents. His share is divided between Sally’s children who take her share under UPC 2-603 and John who survived in proportion to their ownership of the remainder of the residuary estate. Sally owned one-third of the remainder of the residuary and John owned two-thirds of the remainder. The net result is that they will divided the residuary estate one-third to Sally’s children and two-thirds to John. UPC 2-604(b).

Question 15

Brian’s will devised “100 shares of ABC Corp. stock to my friend, Marlene, and the rest, residue and remainder of my estate to my mother.” At the time Brian executed his will, he owned no ABC Corp. stock but did purchase 100 shares one month later. Several years after the purchase, ABC Corp. declared a 5% stock dividend and Brian received 5 additional shares. When Brian died, he owned 105 shares of ABC Corp. stock. Under these circumstances, Brian’s estate should be distributed as follows:

Answer 15

100 shares of ABC Corp. stock to Marlene; the remainder of the estate to Brian’s mother.

Since Brian’s estate owned ABC Corp. stock at his death, Marlene should receive the 100 share bequest; however, she does not receive the 5 additional shares since the estate did not own any shares of ABC Corp. at the time the will was executed. UPC 2-605(a). Those become part of the residuary estate.

Question 16

Now suppose that Brian owned 100 shares of ABC Corp. stock at the time he executed his will and that he devised “100 shares of ABC Corp. stock to my friend, Marlene, and the rest, residue and remainder of my estate to my mother.” After the execution of the will, ABC Corp. declared a 2 for 1 stock split and then declared a 10% stock dividend. At his death, Brian owned 220 shares of ABC Corp. stock. How should Brian’s estate be distributed?

Answer 16

220 shares of ABC Corp. stock to Marlene; the remainder of the estate to Brian’s mother.

Since Brian owned shares which matched the devised shares, Marlene, as devisee, is entitled to any additional shares of the same stock acquired after execution of the will by reason of action initiated by the corporation. Both the stock split and the stock dividend were initiated by the board of directors of ABC Corp. and Marlene thus takes those shares as well. UPC 2-605(a)(1).

Question 17

In the preceding question, would it have made a difference if the stock split shares had been received prior to the execution of the will and the stock dividend shares had been received after the execution of the will?

Answer 17

Yes.

UPC 2-605(a) states that the devisee receives “additional securities” which were “acquired by the testator after the will was executed.” Here the stock split shares were received prior to the execution of the will.

Question 18

If Brian purchased 50 additional shares of ABC Corp. stock after execution of the will, would that stock also pass to Marlene as part of the original gift?

Answer 18

No.

Since these are shares which Brian purchased, they do not qualify under UPC 2-605 as shares “acquired by action initiated by the organization.” Thus, Marlene does not take those shares. If Brian intended a contrary result, he should have left Marlene “all my shares of ABC Corp. stock.” He could have avoided consideration of 2-605 altogether by adding the words “regardless of how acquired.”

Question 19

Now suppose that Brian had received a cash dividend in the form of a check prior to his death. The check was found on the desk in his study at home. It was uncashed and made payable to Brian. Does Marlene take the cash dividend since she is the devisee of the stock?

Answer 19

No.

Under UPC 2-605, Marlene does not take the cash dividend since it was declared and payable before Brian’s death.

Question 20

In the preceding question, would Marlene take the cash dividend if it was not received until several days after Brian’s death?

Answer 20

No.

It makes no difference whether the cash dividend is paid before or after Brian’s death. If it is declared and payable prior to his death, it does not pass with the gift of stock. UPC 2-605(b) and the Official Comments to that section.

Question 21

Ted’s will devised “all my real property to my cousin, Jay.” At the time he executed the will, Ted owned Blackacre and Whiteacre, each being worth $200,000. One year before he died, Ted sold Blackacre to Dawn for $50,000 cash and a promissory note in the sum of $150,000 secured by a first mortgage on Blackacre. He deposited the $50,000 in a savings account entitled “Ted–Blackacre Proceeds.” No other deposits have been made to this account which now has a balance of $52,500 including interest. Under these circumstances, what, if anything, should Jay receive?

Answer 21

Whiteacre, the promissory note and the mortgage on Blackacre.

Jay receives Whiteacre because it was specifically devised to him. UPC 2-606(a). He does not receive the $50,000 or the interest on it since that portion of the purchase price had been paid to Ted prior to his death. He does, however, receive the promissory note since that represents the unpaid portion of the purchase price for Blackacre and he receives the security agreement, i.e., the mortgage. UPC 2-606(a)(1).

Question 22

Would it have made any difference in the preceding question if Ted’s will had specifically stated that he devised Whiteacre and Blackacre to Jay and, prior to his death, Ted had sold Whiteacre and used the proceeds to buy Greenacre?

Answer 22

No.

The distribution would have been the same. UPC 2-606(a)(5) provides that the specific devisee is entitled to real or tangible personal property owned by the testator at death which the testator acquired as a replacement for specifically devised real or tangible personal property.

Question 23

Now suppose Ted devised “Blackacre to Jay and my 1993 Cadillac Allante to Dawn.” Prior to his death, the state exercised the power of eminent domain to take one-fourth of Blackacre for a public school site. Two days before his death, Ted received the $50,000 check from the state and deposited it in his bank account. Ted was killed while driving the Allante. The Allante was a total loss and the insurance company has paid the executor of Ted’s estate the sum of $45,000. How should the executor respond to the claim of Jay and Dawn?

Answer 23

The remainder of Blackacre to Jay; $45,000 to Dawn.

Jay will receive the remainder of Blackacre under UPC 2-606(a). He will not receive the condemnation award since it was paid prior to Ted’s death. UPC 2-606(a)(2). Dawn will receive the $45,000 since it was proceeds unpaid at death on casualty insurance. UPC 2-606(a)(3).

Question 24

May died leaving a will which devised “my diamond wedding ring to my daughter, Lisa.” Several weeks prior to her death, May left her wedding ring in a public restroom by accident and it was never recovered. The loss of the ring was not covered by insurance. Under these circumstances:

Answer 24

Lisa is presumptively entitled to the value of the ring although evidence can be introduced to rebut the presumption.

Although this would not have been the result at common law since intent was not an issue in ademption by extinction, UPC 2-606(a)(6) creates a presumption against ademption unless evidence shows an intent to adeem or ademption is consistent with the testator’s plan of distribution. Since this loss was not covered by insurance, Lisa is entitled to its value.

Question 25

Todd devised “the unpaid balance of a promissory note executed by John Smith and payable to me together with the mortgage on Blackacre securing the said promissory note” to his friend, Lisa. Prior to his death, John Smith defaulted on the note and Todd foreclosed. Todd was the successful bidder for Blackacre at sale. The unpaid balance of the note at foreclosure was $180,000. Blackacre was worth $250,000 at foreclosure sale although Todd only bid $180,000. Blackacre was worth $300,000 at Todd’s death. Under these circumstances, Lisa should receive:

Answer 25

Blackacre.

Where an obligation is specifically devised, the specific devisee has a right to property owned by the testator as a result of foreclosure of the security interest for that obligation. UPC 2-606(a)(4).

Question 26

Elissa, an elderly person, was unable to handle her financial affairs and her daughter, Jennifer, was appointed conservator of Elissa’s assets. In order to provide nursing home care for her mother, Jennifer sold half of Blackacre for $500,000. She received $465,000 net sale proceeds and used $65,000 to pay for Elissa’s care prior to Elissa’s death. Elissa’s will devised Blackacre to her brother, Ed. Under these circumstances, Ed is entitled to a maximum of:

Answer 26

the remaining half of Blackacre and $465,000.

Since Blackacre was specifically devised to Ed, he is entitled to the remainder of Blackacre as the devised property and to a general pecuniary devise equal to the net sale price received by Jennifer as conservator for the sale of the other half of Blackacre. UPC 2-606(b). The rationale here is that Elissa could not have had the intent to adeem since the property was sold without her active consent.

Question 27

Would it have made any difference whether Jennifer, acting as conservator, had borrowed $465,000 and given a lien on Blackacre rather than selling half of Blackacre?

Answer 27

No.

UPC 2-606(b) provides that Ed would be entitled to a general pecuniary devise in the amount of the unpaid loan. Ed takes the remainder of Blackacre subject to the loan but the pecuniary devise makes him whole.

Question 28

Allison’s will devised “$100,000 each to my daughters, Jill and Joan.” Two years after executing the will, Jill asked her mother for $100,000 in order to start a business. Allison gave it to her but told her “You understand that this is in lieu of what you would take under my will?” Jill assured her that she did understand that. Allison recently died. Is Jill entitled to $100,000?

Answer 28

Yes.

Even though Allison stated her intent, she did not do so in writing nor did Jill acknowledge the intent in writing. UPC 2-609.

Question 28

Suppose that Elissa had not had a conservator and had been capable of handling her own affairs. She borrowed $400,000 from the bank and gave them a mortgage lien on Blackacre two days prior to her death. She intended to use the borrowed funds to build a house on Blackacre which would have increased its value. She died before she could do that. Under these circumstances, is Ed entitled to the proceeds of the loan or to have the loan paid off?

Answer 28

No.

UPC 2-607 says that a specific devise passes subject to any mortgage interest existing at the date of death, without right of exoneration. There is no provision in UPC 2-606 for giving Ed the proceeds of the loan or for paying off the loan. Ed takes Blackacre subject to the debt.

Question 28

Would it have made any difference in the preceding question if Elissa’s will had contained a provision which reads as follows: “I hereby direct that all debts owed by me be paid by my executor as soon after my death as possible”?

Answer 28

A general direction to pay debts is insufficient to cause exoneration of liens on specifically devised property. UPC 2-607. If Elissa had stated “I direct that any mortgage on real property owned by me at my death be paid by my executor from the assets of my estate,” that would probably have been specific enough for Ed to claim a right to have the lien exonerated.

Question 28

Would it have made any difference if, a year after giving Jill the $100,000, Allison had written a letter to Jill telling her that she regarded the $100,000 as being in complete satisfaction of any claim Jill might have to Allison’s estate?

Answer 28

No.

It would have made no difference at all since Allison’s letter was not a contemporaneous writing. UPC 2-609(a). If Jill had responded in writing, telling Allison that she regarded it as being in satisfaction of the gift in the will, that would have been sufficient to preclude Jill from taking since Jill’s acknowledgment can be made before, contemporaneous with, or after the transfer. Allison could also execute a codicil to her will directing that the gift be taken into consideration.

Question 29

Suppose that, in the preceding two questions, Jill had acknowledged in writing that the $100,000 was given in satisfaction of her claim under the will. However, Jill predeceased Allison and Jill was survived by two children. Are the two children entitled to $100,000?

Answer 29

They are not entitled to it. UPC 2-609(c) provides that if the devisee predeceases the testator, the gift is considered as satisfying the gift in applying the lapse and antilapse doctrines of UPC 2-603 and 2-604. The children can take no more by antilapse than their parent could have taken.

Question 30

Now suppose that Allison’s will had left her estate equally to Jill and Joan. Prior to her death, Allison gave Jill 500 shares of ABC Corp. stock and, at the same time, showed Jill a statement, signed by Allison, reciting that the gift of 500 shares of stock was part of Jill’s devise under the will. The 500 shares were worth $100,000 at the time they were given to Jill but are now worth $200,000. Allison’s estate has a net value of $500,000. Under these circumstances, what should Jill receive from the estate:

Answer 30

Since Allison executed a writing contemporaneously with the transfer of the shares, they must be taken into account in calculating Jill’s share of the estate. UPC 2-609(a). Under 2-609(b), the shares will be valued at the time the gift was made so that Jill will be charged with $100,000. Adding that amount to the estate, the total amount is $600,000. Jill is entitled to $300,000 of which she has already received $100,000. She is entitled to $200,000 more from the estate and Joan receives $300,000. Note that this equalizes the distribution of Allison’s total wealth as the will purported to do.