Changes to Property between Execution and Death

Question 1

Classificaton of testamentary gifts

Answer 1

many times the rules hat apply will depend on type of gift. based on the type of property, based on type of beneficiary,

Question 2

Classification based on type of property

Answer 2

i. Devise—gift of real property

ii. Bequest—gift of personal property
1. specific bequest—distinguishable from rest of testator’s estate at time of will execution
a. I leave comp w serial number to anna
2. specific bequest of general nature—not distinguishable from estate until testator’s death
a. I leave my computer to Anna. computer may change

iii. Legacy—gift of personal property not sufficiently described to be specific. most common is money/ securities.
1. General legacy/ gift/ bequest.
a. I leave 10k to Walter
2. Demonstrative legacy—sum of money payable out of designated fund.
a. I leave 10k to walter from my account at state bank
b. if fund is insufficient, balance will usually paid from other assets of the estate.

iv. Residual gift—remainder of the estate
1. some use residuary for forgotten items. Or some use the residuary gift as the main disposition of the property, naming some small heirlooms.

Question 3

Classification based on type of beneficiary

Answer 3

i. Private or charitable

Question 4

Ademption of specific gifts by extinction and exception

Answer 4

a. Specifically gifted item is not in the probate estate. For ex destroyed or stolen. The gift ademes. b. Genera rule—gift fails
i. adeems according to the identity rule. Usually beneficiary doesn’t take a substitute gift nor the value of the gift. No tracing into proceeds.

Exception to ademption of specific gifts

i. Replacement—some states get another similar item.
ii. Balance of purchase price—if testator sold it and still money owed, that money goes to beneficiary.
iii. Proceeds of condemnation or insurance for stolen/ broken items.
iv. If the specifically devised property is sold by a guardian or a conservator—if so devisee is entitled to a general pecuniary legacy equal to the amount of the proceeds.

Question 5

Ademption by satisfaction

Answer 5

a. beneficiary received gifted property before testator’s death—gift inter vivos, prepayment

must have 1) written proof and 2) intent for prepayment of will’s gift

Question 6

Changes in value of testator’s property

Answer 6

a. specific gifts—appreciation and depreciation of specific gifts are usually irrelevant.
b. Securities acquired after will execution
i. Stock splits, dividends, mergers—usually beneficiary takes that amount.
1. like potato chips in bag that gets crushed
ii. Newly purchased securities—beneficiary do not get newly purchased securities like reinvestment of dividend plans
iii. If gift of stock is general – get exact number

Question 7

Exoneration of debts owed on specific gifts

Answer 7

a. Jdxns divided—
i. Majority– Debts are not paid off by other estate assets. only get the equity
ii. Some states—debts are paid off.
iii. some states—personal paid off, real property is not

Question 8

Abatement

Answer 8

a. What gifts fail if the property is inadequate to satisfy all testamentary gifts
b. Typical abatemet order (assuming will is silent)
i. intestate property
ii. residual
iii. general gifts
iv. demonstrative gifts (sum of money from specific fund)
v. specific gifts
vi. within a class, abatement is pro rata.

Question 9

Disclaimers

Answer 9

beneficiaries can disclaim just as heirs can. property then passes as if beneficiary predeceased the testator under the terms of the will.