Decedents' Estates Flashcards
- At issue is whether the additional shares of ABC stock should be distributed to Donna.
At common law, shares of a stock that are acquired through a dividend are treated as separate property than stocks specifically devised in a will. However, under the UPC, stocks acquired through a dividend may be treated as the same property as stocks specifically devised in a will, so long as the testator’s acquisition of those stocks was due to action on behalf of the issuing corporation. In those instances, the devisee of a specific bequest of stocks is entitled to those additional shares.
Application
Here, the facts indicate that this jurisdiction has adopted the UPC. Testator made a specific bequest of the ABC Corp. Stock to Donna, who survived the testator. Although the will only granted Donna 200 shares, in a UPC jurisdiction such as this, the additional 100 shares would be included in the testator’s gift to Donna, as the shares were acquired based on actions taken by ABC Corp, rather than testator herself. Furthermore, the additional shares were acquired after the will was made, and there are no other indications that testator did not want Donna to take the additional shares.
Thus, since this is a UPC jurisdiction, the probate court should distribute all 300 shares to her.
- At issue is whether Edward should take the house with the mortgage, or whether the doctrine of exoneration of liens should apply.
At common law, the doctrine of exoneration of liens held that a devisee of real property was entitled to have the assets of the decedent’s estate pay off any encumbrances on the property at the time of the decedent’s death. The UPC, however, has abandoned the doctrine of exoneration of liens. Instead, a recipient of encumbered real property is not entitled to have the estate’s funds pay off any mortgages on a home at the time of death. However, if a testator
specifically requests that estate funds be used to pay off a mortgage, a court in a UPC jurisdiction may give effect to the testator’s intent by paying off a mortgage the testator intends to be paid off using estate funds.
Application
Here, this jurisdiction follows the UPC, so the common law doctrine of exoneration of liens is likely not recognized. The testator directed all debts be paid before making the devises in her will. However, at the time the will was made, the testator had not taken out a mortgage on the home. The instruction for all debts to be paid is likely not specific enough to demonstrate a testamentary intent that the mortgage should be paid off, as the UPC would likely require a stronger showing of intent before applying $125,000 of the
$200,000 in the estate towards the mortgage. Thus, because the doctrine of exoneration of liens does not apply, and the testator did not specifically intend for the mortgage to be paid off with estate
assets, Edward will likely take the testator’s home subject to the mortgage.
- At issue is whether the letter to George was sufficient to indicate that his gift was an advancement under the UPC.
At common law, all lifetime gifts to a beneficiary or heir were deemed advancements. However, under the UPC, a lifetime gift is only an advancement if the testator declares, in contemporaneous writing, that the gift was meant to be an advancement, or if the beneficiary acknowledges in a writing that the gift is an advancement.
Application
Here, at the time the gift was made to George, Testator did not acknowledge it as an advancement. Testator acknowledged it as an advancement in writing, but years later after making the gift. In order for it to be deemed an advancement under the UPC, the testator would have needed to acknowledge it as an advancement at the time the gift was made. Furthermore, although George could have acknowledged it as an advancement at any time, the facts do not indicate that he ever did so. Thus, this would likely not constitute an advancement, and George would be entitled to take his intestate share of the estate, not reduced by $30,000 had he survived testator.
- At issue is whether an anti-lapse statute would prevent George’s gift from lapsing since he is related to testator by blood.
Nearly every jurisdiction has adopted an anti-lapse statute. When a beneficiary dies before a testator, their gift lapses, and generally will revert to the residue of the estate. However, when an anti-lapse statute is in place, and the deceased beneficiary is related to the testator by a certain degree of blood relation and leaves issue, the issue can stand in their parent’s place and take under the terms of the will. Some jurisdictions also will allow property to pass through
an anti-lapse statute through a parentelic approach, whereby if a beneficiary doesn’t survive the testator and leaves no issue, but they are related through parents, a beneficiary who is also a descendant of their parents may stand to take their bequest.
Application
Here, George was testator’s son, which likely would satisfy the degree of blood relation required in any jurisdiction’s anti-lapse statute. Furthermore, Faye also predeceased the testator, causing her bequest of the piano to lapse. Although the testator also has devised property to Edward, whom both testator and Faye are related to, most jurisdictions only apply an anti-lapse statute to
beneficiaries who leave issue, rather than siblings. Thus, an anti-lapse statute would likely prevent George’s gift from lapsing, but
probably would not prevent Faye’s gift from lapsing. Thus, only the bequest to Faye would pass through intestacy.
- At issue is whether Faye is entitled to the proceeds from the insurer of the piano.
When a bequest is not in the testator’s possession at the time of their death, the gift is considered adeemed by extinction. Under the common law, a beneficiary of a bequest which is adeemed by extinction is not entitled to any replacement property or funds obtained from the sale of that property. However, the UPC has a mild presumption against ademption, and generally a court in a UPC jurisdiction will award a beneficiary of adeemed property the
proceeds from the sale of that property, or any replacements obtained for it.
Application
Here, the piano was still in testator’s possession at the time of her death, so it was not truly adeemed by extinction. However, the piano was substantially damaged and likely not usable at that point. Because the UPC has a presumption against ademption, the beneficiary of the piano would likely receive the funds the insurer had to pay out on it. Thus, if Faye were alive to take the piano, the probate court should distribute the funds for it to her. However, as discussed above, it is likely the gift to Faye either lapsed or
would pass to Edward as a blood relation of both testator and Faye, if this jurisdiction’s anti-lapse statute allows for siblings to take in the place of each other.
- At issue is in what order the assets of the estate should be abated.
When the debts of a testator’s estate are greater than the assets, absent an alternative indicator of testamentary intent, the gifts will abate and satisfy the debts of the estate in the following order: intestate property, residuary gifts, general bequests, demonstrative bequests, then specific bequests. Intestate property is that which does not pass by will. General bequests are money amounts that may satisfied from any source. Demonstrative bequests are bequests to be satisfied from a specific source (such as a particular bank account). Specific bequests are bequests of identifiable objects to a beneficiary.
Application
Here, the testator does not have a residuary clause, so a part of her estate will pass through intestacy since it is not otherwise disposed of by will. This includes the $200,000 in cash, as this seems to be the only bequest not otherwise devised of in the will. If the court applies the UPC’s presumption against ademption, the proceeds from the insurer are a demonstrative bequest, as it is funds to be
paid out from a specific source. The home and stocks would be considered specific bequests, as both are identifiable pieces of property. Thus, if the estate debts are greater than its assets, and property must be abated, the proper order would be to satisfy testator’s debts from her $200,000, then from the $10,000 demonstrative bequest, then the specific bequests of
the home and stock
