death of beneficiary during testator's lifetime

Question 1

general rule

Answer 1

A testator can’t make gift to deceased person—anti-lapse statute or fails

Question 2

anti-lapse statute

Answer 2

general rule: if a beneficiary dies during T’s lifetime, gift to beneficiary lapses (fails) UNLESS gift is saved by state’s anti-lapse statute

Question 3

NY’s anti-lapse**

Answer 3

(aka DOES NOT FAIL)

provides substitute taker; gift does not pass to decedent’s estate

a) New York’s anti-lapse statute provides that the gift does not lapse if it vests in the deceased beneficiary’s issue who survive the testator

b) Anti-Lapse Statute: A gift does not lapse but vests in deceased beneficiary’s issue (only; it provides a substitute taker; it does not pass through estate) if BOTH:
1) pre-deceased beneficiary was testator’s issue or brother or sister, AND
2) pre-deceased beneficiary leaves issue who survive testator (only issue take)
3) A condition to bequest (“if he survives me”) trumps anti-lapse. Gift fails if condition not met.

c) Tested with Disclaimer:
1) Under intestate rules, disclaimant is considered to have predeceased decedent.
2) Under testate rules, disclaimant is considered to have predeceased testator.

d) Death of Adopted-Out Child: Even though son adopted out (and generally has no inheritance rights from birth parents or other members of birth family), if real father testator specifically named adopted out son, anti-lapse statute saved testator’s devise to the adopted-out son’s issue (but not Son’s will, only applies to issue).

Question 4

lapse in residuary gift

Answer 4

a) Surviving Residuary Beneficiaries Rule:

Absent contrary provisions in the Will:

1) Part 1: If testator’s residuary estate is
(a) devised to two or more persons; AND
(b) the gift to one of them lapses or fails for any reason, AND
(c) anti-lapse statute does not apply

2) Part 2: THEN, the other residuary beneficiaries take entire residuary estate, in proportion to their interest in residue, absent contrary provision in Will.
3) Example: Albert’s Will, after making various bequests, provides: “I devise all of the rest, residue and remainder of my estate in equal shares to my sisters Louise and Victoria and my friend James.” Albert is survived by Louise and Victoria. Albert’s friend James predeceased him, leaving a son (James Jr.) who survived Albert. What distribution?

SO NOTE: Anti-Lapse Statute trumps Surviving Residuary Beneficiaries Rule → all takers share proportion

b) TIP: who is beneficiary? If brother/sister/issue (anti-lapse applies); if brother’s kid (anti-lapse inapplicable)

Question 5

class gift rules

Answer 5

a) General Rule: Absent contrary provisions, if Will makes gift to group of persons generically described as class (children, siblings) and some predecease testator → class members who survive testator split pre-deceased’s beneficiaries share (meaning class members who survive take in equal shares), unless anti-lapse applies (so issue can participate).
1) Rationale: a rule of construction based on presumed intent. Testator made “group-minded” gift to this class of persons—no one else.
2) To determine takers, look at who is alive at time of Testator’s death.
3) if beneficiares are named as individuals, this doesn’t apply because not a class gift

b) The Adopted-Out Child: Adopted out children into new family do NOT take as members of class gifts—UNLESS adopted out child is adopted by a member of birth family
1) Intra-Family Adoption: child inherits by birth relationship, unless decedent is adoptive parent.

c) Rule of Convenience: The class closes at time distribution to the class must be made. Later-born class members are excluded.
1) Exception: NOT excluded if Gestation Principle applies; CL presumes 280 days conception to birth.
2) Rationale: rule of construction to determine takers of class gift. Close class to determine distribution rights of each living class member, so a distribution can be made without the necessity of asking for a rebate or a refund later on (rule of convenience).

d) Class Closes: when existing class members can demand gift
1) Outright Class Gift by Will: class closes at T’s death
2) Life Estate or Income Interest With Remainder to Class: death of life tenant or income beneficiary.