Changes in Beneficiaries and Property After Will Execution

Question 1

Ademption

Answer 1

Under the doctrine of ademption, when specifically bequeathed property is not in the testator’s estate at death, the bequest fails. Most courts apply the identity theory of ademption, which uses an objective test; the testator’s intent is irrelevant. Under a well-recognized exception to the ademption doctrine, if a conservator is appointed for the testator after the will is executed and the property is sold by the guardian, the beneficiary is entitled to to the sale proceeds - at least to the extent they have not been expended for the testator’s care. Some courts have adopted a more lenient intent test, under which the beneficiary is entitled to substitute property owned by the testator if the beneficiary can prove that the testator intended the beneficiary to take the substitute property. Under the UPC, a specific devisee has the right to any real property owned by the testator at death that was acquired as a replacement for the specifically devised property.

Question 2

Stock dividends

Answer 2

Under the common law rule, a specific bequest of stock includes any additional shares produced by a stock split but not those produced by a stock dividend. Under the UPC and the statutes of many states, a specific bequest of stock includes stock dividends. For purposes of stock splits and dividends (rather than ademption), most courts consider all bequests of stock to be specific bequests.

Question 3

Anti-lapse statute

Answer 3

All states have some form of anti-lapse statute that saves the gift if the predeceasing beneficiary was in a certain degree of relationship to the testator and left descendants who survived the testator. The statute provides for those descendants to take as substitute takers; the gift is not saved for the predeceasing beneficiary’s estate. Most states require that the predeceasing beneficiary be related to the testator by blood and do not save a gift to a predeceasing spouse - even if he left descendants who survive the testator.

Question 4

Abatement

Answer 4

When an estate’s assets are not sufficient to pay all claims and satisfy all bequests and devises, gifts abate (are reduced). Unless the testator specifies an order of abatement, gifts abate in the following order: intestate property, the residuary estate, general legacies, and specific devises and bequests.

Question 5

Lapsed residuary clause

Answer 5

At common law and in some states, if a testator’s residuary estate is bequeathed to two or more beneficiaries and one fo the shares lapses, that share falls out of the will and passes by intestacy. Most states have replaced this rule by statute, under which the lapsed share passes to the other residuary beneficiaries in proportion to their interests in the residue.

Question 6

Specific bequest

Answer 6

A specific bequest is a gift of property that is particularly designated and is to be satisfied only by the receipt of the particular property described.

Question 7

A will speaks at the time of death

Answer 7

A will operates upon circumstances and properties as they exist at the time of the testator’s death.