Conveyance by Will, Trust, and Operation of Law Flashcards
Doctrines affecting conveyance by will
Ademption
Ademption:
- A devise of real property may fail (or be “adeemed”) because the testator no longer owns the property upon death (i.e., because the property was sold, destroyed, or given away before death).
- If the testator gives the property to the intended beneficiary while the testator is still alive, then the devise is adeemed by satisfaction.
- Once a devise is adeemed, the beneficiary named in the will takes nothing.
The doctrine of ademption applies when a testator transfers property after executing a will and causes a devise to fail in two circumstances:
i) Ademption by extinction – when the testator does not own a specifically devised asset at the time of death*
* *Ademption by extinction also applies when the testator owns a specifically devised asset at the time of death but the asset has been destroyed or fundamentally changed.
ii) Ademption by satisfaction – when the devisee received the devised asset or a satisfactory substitute during the testator’s life
EXAM NOTE: Remember that ademption can occur only with a specific devise, such as real property, and not with a general devise, such as money.
EXAMPLE: A executes a will under which Blackacre is devised to B, but then he sells Blackacre to C. When A dies, the gift is adeemed, and B takes nothing.
Doctrines affecting conveyance by will
Lapse and Anti-lapse
Under common law, a devise of real property can also fail (lapse) if the beneficiary under a will dies before the testator and no alternate beneficiary is named.
When the testator indicates a clear intent that the devise survive the death of the beneficiary, the devise will not fail. In addition, all jurisdictions have anti-lapse statutes, which prevent a gift from lapsing if the gift is made to parties specified by the statute (usually immediate relatives of the testator) and they leave issue who survive the testator. In most jurisdictions, the anti-lapse statute is limited to grandparents or a descendant of a grandparent of the testator (e.g., aunts, uncles, parents, siblings, children.) A lapsed gift becomes part of the residuary estate.
Example: By will, A devises her car to B, Blackacre to C, and the remainder of her property (the residuary estate) to D. A does not name any alternate beneficiaries. If C dies before A and the devise does not qualify for protection under the anti-lapse statute, then Blackacre becomes part of the residuary estate and passes to D, along with all of A’s property other than the car, which goes to B. If C is related to A such that the anti-lapse statute applies, then Blackacre passes to C’s descendants.
Doctrines affecting conveyance by will
Exoneration
Under the common-law exoneration of liens doctrine, if a testator makes a specific devise of real property that is subject to an encumbrance, such as a mortgage or a lien, then the devisee is entitled to have the land “exonerated” by payment of the encumbrance from the remaining assets in the testator’s estate.
- Allows beneficiary of specifically devised real property to use estate’s remaining assets to pay off any encumbrances on that property.
Most states have abolished this doctrine. In such states, the property passes subject to the encumbrance unless the will specifically requires payment of the encumbrance.
Shelter Rule - Donee who receives property
All recording acts protect purchasers for value—not donees—from competing claims to the same property interest.
However, under the Shelter Rule, a donee who receives property from a grantor protected by a recording act will receive the same protection as the grantor under the recording act.
A grantor will be protected by any recording act if the grantor was a purchaser for value who
(1) recorded first AND
(2) acquired the property without notice of the prior competing interest.
When does a property escheat to the state?
If the decedent has no will that disposes of the property and no heirs upon his/her death, then the property will revert to the state (i.e., escheat).
When there is no will or a will fails to address the disposition of the decedent’s real property, then the property will transfer to the decedent’s heir(s) by intestate succession or, if the decedent has no heirs, escheat to the state.
