changes in beneficiaries and property after will execution Flashcards
what happens to lapsed gifts?
(1) express terms of the will govern
(2) applicable anti-lapse statute governs
(3) residuary clause
(4) intestacy statute
anti lapse statute
when a beneficiary who predeceases the testator is a grandparent or lineal DESCENDANT of the TESTATOR’S grandparents, the ben’s descendants will be substituted as takers
applies when beneficiary predeceases testator, AND when gifts are void [i.e. when beneficiary died prior to will execution]
lapse in residuary gift
IF both
(1) residuary gift lapses
and
(2) anti lapse does not apply [bc no descendants]
the living residuary beneficiaries take the deceased beneficiary’s share in proportion to their interest int he residue
class gifts
class members who survive the T take the gift, unless there is a contrary will provision or the anti-lapse statute applies
Ex: I leave my estate to A, B and C. A dies prior to testator and is not a lineal descendant. = B and C take A’s share
Ex: I leave my estate to A, B and C. A dies prior to testator and IS a lineal descendant. = A’s kid takes her share, B and C get their shares
adopted or non marital children for class gifts
A gift in a will or trust to someone’s “children,” “grandchildren,” “descendants,” “issue,” or “heirs” presumptively includes an adopted child UNLESS a contrary intent is demonstrated by the terms of the instrument.
A nonmarital child is presumptively included in class gifts if they are deemed related to the designated ancestor for purposes of intestate succession
anti lapse statutes — extent to which they apply to non probate transfers
Virginia anti-lapse statute does not apply to life insurance desig- nations, rights of survivorship, and other nonprobate transfers.
ademption by extinction
GENERAL RULE: When specifically bequeathed property is not in the testator’s estate at death, the bequest is “adeemed,” or fails.
ADEMPTION DOES NOT APPLY:
(1) bequest of T’s interest in the property
(2) general legacies [bequest of dollar amount payable out of general assets without providing source of payment]
(3) demonstrative legacies [gifts of general amount that identify specific assets as source of payments]
(4) securities bequests [will be constructed as general legacies to avoid ademption]
– EXCEPTION: “MY shares” = specific bequest, so ademption applies
(5) statutory exceptions to ademption
statutory exceptions to ademption
(1) sale by guardian or conservator of specifically devised property / proceeds paid to them for fire or casualty insurance
If T made a specific bequest to a beneficiary, and EITHER
(a) the guardian/conservator acting under power of attorney sold it,
or
(b) fire or casualty insurance proceeds are paid to guardian or conservator as result of loss or damage to that property
= beneficiary gets a general legacy equal to net sale price or insurance proceeds
[However, the above rule does not apply if, after the sale or casualty, it is adjudicated that the testator’s disability has ceased, and the testator survives the adjudication by one year]
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(2) if case does NOT involve guardian or conservator:
if you are a specific devisee, you have a right to:
(a) condemnation award for taking of your property
AND/OR
(b) proceeds from fire or casualty insurance on the property
IF, these amounts are paid AFTER death
-
(3) corporate reorganizations, mergers
specific devisee of stock will get securities of another corproation owned by T as a result of merger, consolidation, reorganization etc.
what happens when the securities devised to the beneficiary get … stock splits and stock dividends
A specific devisee of stock is entitled to any additional or other securities owned by the testator because of action initiated by the entity, other than securities acquired by the exercise of a purchase option.
If a cash legacy is not paid within one year, the beneficiary is entitled to ?
interest until it is paid.
Ademption by satisfaction
Intervivos gifts to a will beneficiary are not treated as being in partial or total satisfaction of the bequest given under the will UNLESS
(1) T declares in a contemporaneous writing that the gift was intended to satisfy a legacy
(2) Ben acknowledges in writing that gift is in satisfaction
OR
(3) will expressly states that legacies will be reduced by intervivos gifts
