Changes in Distribution of Testamentary Gifts

Question 1

Classification of Gifts

Answer 1

• Specific Gifts
• Demonstration Legacy- general amount from a specific source
• General Legacy
• Residuary Disposition
• Intestate Property

Question 2

Order of Abatement

Answer 2

(1) Intestate & residuary property
(2) General Legacies
(3) Demonstrative Legacies
(4) Specific Gifts
(5) Items that qualify for estate tax marital deduction

Question 3

Abatement

Answer 3

If there are more claims against the estate than there are assets to cover all gifts made under the will, gifts under the will will abate

Question 4

Ademption (failure of a gift)

Answer 4

If T makes a specific gift of property, and the property cannot be found or is no longer owned by T at time of her death, the gift fails under the doctrine of ademption
-demonstrative gifts do not adeem

Question 5

Ademption exceptions

Answer 5

(1) insurance proceeds paid for lost, damaged, or destroyed property- beneficiary takes to the extent they are paid after death
(2) Proceeds received under an executory contract- beneficiary gets proceeds which are paid after death
(3) proceeds from a guardian or conservator’s sale of specifically bequeathed property

Question 6

Specific Gifts of Encumbered Property- No Exoneration of Liens

Answer 6

NY- liens on specifically devised property are not exonerated unless the will directs exoneration

Question 7

Bequests of Stock and other Securities

Answer 7

• Gifts of Shares of stock in publicly traded corporations are general gifts
• gifts of shares of stock in closely-held companies are specific gifts
• gifts of shares of stock where a stock split occurs- treat as specific bequest for purposes of the split