Changes in Property after Execution of a Will Flashcards
Bequest v Devise
The terms bequest and devise both describe gifting in a Last Will, but their meanings differ slightly. While bequest often describes any type of gift given to a beneficiary after a person passes away, devise only applies when the gift is real property
general bequest
A bequest of a designated quantity or value of property or money out of the general assets of the testator’s estate, rather than from any specific fund or property.
specific bequest
Specific bequest refers to any specific property given to individuals in a will. The key to this phrase is that the property is unmistakable and the intended recipient is also without question, i.e. a ring
Demonstrative v Specific bequest
Demonstrative: A demonstrative bequest is a gift of a specific distribution from a named fund or account
Specific: It is the gifting of a specified property or asset to an identified person or entity, distinguished from the property in the estate
What is ademption by extinction?
if specific property of a specific devise or specific bequest is gone, that devise is adeemed; the devisee has no interest in the specific property (the item of property is not in the testator’s estate at the time)
does not apply to general devises or bequests
Identity Theory of ademption
VA adheres to this; simply asking whether the specifically devised property is part of the decedent’s estate will usually suffice
What are exceptions to ademption by extinction: (3)
-bequests of specific securities include other securities of the same entity acquired by reason of action initiated by the entity (ie merger, stock split)
-condemnation award or insurance proceeds for the taking/damage of specifically devised property still unpaid at death
-net value of specifically devised property sold/destroyed and covered by insurance while testator legally incapacitated
What is ademption by satisfaction? (3)
occurs when a testator transfers property to a beneficiary during the beneficiary’s lifetime if:
-will expressly deducts lifetime gift
-contemporaneous writing by the testator states that the gift is in satisfaction, or
-devisee acknowledges the gift is in satisfaction in writing
exoneration of liens
unless a contrary intent appears in the will, a specific bequest or devise remains subject to liens existing at death of testator
what is abatement?
if the estate does not have assets sufficient to pay creditors and all the devises and bequests provided in the will, the creditors are paid first and the devises and bequests are cut back
what gets abated first?
personal property abates before real property; real property abates only if personal property is insufficient to pay
the order of abatement (someone has to lose, this is the order of winners and losers): (5)
1)property passing by intestacy
2)property passing under the residue of the will
3)general bequests
4)demonstrative bequests
5)specific bequests
what is insolvency?
arises when the estate cannot cover its debts
beneficiaries do not get shit
in what order are creditors paid if the estate is insolvent: (10)
1)costs and expenses of administration (ie the lawyer)
2)family allowance, homestead, and exempt property
3)funeral expenses up to 4K
4)debts and taxes with preference under federal law
5)medical expenses of the decedent’s last illness up to $2150 for each hospital and nursing home and $425 for each person (private nurse) furnishing services
6)debts and taxes due to the Commonwealth
7)debts payable as a fiduciary
8)debts for child support arrearages
9)debts and taxes due to state and local governments
10) all other claims (ie credit cards)
