Decedents' Estates

Question 1

Does a bequest of a specific number of shares of stock owned by
Testator when the will was executed include other shares of the
same stock acquired after the will was executed as a result of a
stock dividend?

Answer 1

Andy is entitled to the 200 shares of XYZ stock Testator owned at the time of death unless the jurisdiction does not follow the modern approach.
Historically, a bequest of stock owned by a testator when the testator’s will was signed excluded subsequently acquired shares of the same stock acquired by the testator as the result of a stock
dividend. See , e.g ., Hicks v. Kerr , 104 A. 426 (Md. 1918). The rule was justified on the ground that, if the testator had wanted the legatee to take the later-acquired shares, the testator could
have changed the will to take those additionally acquired shares into account. A contrary rule applied to shares acquired as a result of a stock split. See , e.g ., Bostwick v. Hurstel , 304 N.E.2d
186 (Mass. 1973). Today, stock dividends are typically treated like stock splits because, in each case, nothing of value has been distributed by the corporation to the shareholder. Additional shares of the same company, when acquired by stock split or stock dividend, are, from the shareholder’s economic perspective, merely a change in form, not substance. See UNIF. PROBATE CODE (UPC) § 2-605 (a devise of stock owned by the testator when the will is executed includes such additional stock owned by the testator at death, whether acquired by a stock split or a stock dividend). Under the UPC or a like statute, Andy would be entitled to all 200 shares of XYZ stock owned by Testator at her death.

Question 2

Does a bequest of a specifically described home include another
home acquired with the proceeds from the sale of the specifically
described home?

Answer 2

Under common law, an ademption occurs when the subject matter of specific devise is not found in the probate estate at the time of the testator’s death. See WILLIAM M. MCGOVERN & SHELDON F.
KURTZ , WILLS, TRUSTS AND ESTATES 315–16 (3d ed. 2004). Here, Testator specifically bequeathed to Ben Testator’s home located at 4 Cypress Garden. Since Testator did not own that home when
she died, the bequest adeems. Id . at 316. As a result, the condo passes to Ed, the residuary legatee.
Under UPC § 2-606(a)(5) or a like statute, however, Ben would be entitled to Testator’s condominium. This section provides that the devisee of specifically devised real estate is entitled to any “real property . . . owned by the testator at death which the testator acquired as a replacement for specifically devised real property . . . .” The facts support the conclusion that Testator purchased the condominium as a replacement home for the home that was specifically devised to Ben.
The “replacement property” concept appears to have little support in case law. However, RESTATEMENT (THIRD) OF PROPERTY (WILLS AND OTHER DONATIVE TRANSFERS) § 5.2, cmt. d urges
that the provision of the UPC should be applied by courts in those cases “in which the result appears to be consistent with the testator’s intent.”

Question 3

Does a bequest of a generically described automobile adeem when
the automobile owned when the will was executed is traded for
another automobile?

Answer 3

Carrie is entitled to the blue automobile.
Because of the time-honored rule of construction that a will “speaks” at the time of death, a bequest of generically described property (e.g., my automobile) applies to property that meets the
generic description at the testator’s death. See generally MCGOVERN & KURTZ , supra , at 316; RESTATEMENT (THIRD) OF PROPERTY (WILLS AND OTHER DONATIVE TRANSFERS) § 5.2, cmt. e. Thus,
the bequest of the automobile is unlike the bequest of the home in that the latter, but not the former, is described in a non-generic manner and thus is subject to the rules of ademption.

Question 4

Does Donna’s disclaimer of the $10,000 bequest result in that
bequest passing to her daughter or to the residuary legatee?

Answer 4

The $10,000 bequest to Donna fails because of Donna’s disclaimer and because Donna is not the type of legatee typically described in an anti-lapse statute. The bequest passes to Ed, the residuary legatee.
If Donna had not disclaimed the $10,000 legacy, it would have passed to her under the provisions of Testator’s will. However, she did disclaim the bequest. Under the typical disclaimer statute, if a legatee disclaims a general bequest, the bequest passes as if the
disclaimant had predeceased the testator. See generally UPC §§ 2-1106, 2-901(d).
When a disclaimant is deemed to have predeceased the testator, the question arises whether the bequest to that disclaimant passes to her issue. The answer here depends upon the application of
the anti-lapse statute. The typical anti-lapse statute would not apply here because Donna was a friend, not a relative, of Testator. See generally UPC § 2-603 (anti-lapse statute applicable to
legatee who was a grandparent or issue of grandparent of the testator). If the anti-lapse statute is inapplicable, then the $10,000 passes to Ed as the residuary legatee.