Changes in Beneficiaries & property After Will's Execution Flashcards
Lapsed Gift
If a will beneficiary dies during the testator’s lifetime, the gift “lapses,” or fails. The person who receives the lapsed gift is controlled by (in this order):
- Express terms of the will
- Applicable anti-lapse statute
- Residuary clause; then
- Intestacy statute
Virginia’s Anti-Lapse Statute
Virginia’s anti-lapse statute operates to save a testamentary gift if the predeceasing beneficiary was a grandparent or lineal descendant of the testator’s grandparents. The beneficiary’s descendants that survive the tester are substituted as takers under the anti-lapse statute.
Lapse in the Residuary Gift
If a residuary gift lapses and the anti-lapse statute does not apply, the residuary beneficiaries who survive the testator take the deceased beneficiary’s share in proportion to their interest in the residue.
Anti-Lapse if Beneficiary is Dead
If a will makes a gift to a beneficiary who was dead at the time the will was executed, the gift is void. The anti-lapse statute and the “surviving residuary beneficiaries rule” also apply to void gifts.
Class Gifts
Only class members who survive the testator take the gift, unless there is a contrary will provision or the anti-lapse statute applies
When Anti-Lapse does not Apply
The VA anti-lapse statute does not apply to life insurance designations, rights of survivorship, and other non probate transfers
Ademption by Extinction
When specifically bequeathed property is not in the testator’s estate at death, the bequest is “adeemed,” or fails.
When does Ademption by Extinction Apply?
Ademption applies only to specific devises and bequests. A specific bequest may be partially deemed. If the bequest is of the testator’s interest in the property, ademption will not apply.
Statutory Exceptions to Ademption Doctrine
1) Sale by Guardian or Conservator
2) Certain Proceeds to Extent Unpaid at Testator’s Death
3) Corporate Reorganizations, Mergers, Etc.
Sale by Guardian or Conservator (Statutory Exceptions to Ademp)
If specifically devised property is sold by a guardian, conservator, or agent acting under a durable power of attorney, or if fire or casualty insurance proceeds are paid to the guardian or conservator as the result of loss or damage to the property, the specific beneficiary is entitled to a general legacy equal to the net sale price or insurance proceeds.
Certain proceeds to Extent Unpaid at Testator’s Death
In cases not involving a guardian or conservator, the statute provides that a specific devisee has a right to
(1) any amount of a condemnation award for the taking of property by eminent domain; and
(2) any proceeds from fire or casualty insurance on the property.
Satisfaction of Legacies
In VA, an inter vivos gift to a will beneficiary is not treated as being in partial or total satisfaction of a legacy unless:
(1) the testator declares in a contemporaneous writing that the gift was intended to satisfy a legacy.
(2) the beneficiary acknowledges in writing that the gift is in satisfaction; or
(3) the will expressly states that legacies are to be reduced by such inter vivos gifts.
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.
Interest on Cash Legacies Not Paid Within One Year
If a cash legacy is not paid within one year, the beneficiary is entitled to interest until it is paid.
