ELEVENTH CONCEPT: REVOCATION BY CHANGE IN PROPERTY HOLDINGS (ADEMPTION)

Question 1

What is a specific devise?

Answer 1

A gift of a particular item that is unique.

Question 2

For a specific devise, Testator must have the ______ the beneficiary take this particular thing, and nothing else.

Answer 2

intent

Question 3

What type of property is always specific?

Answer 3

1. Real property is always specific and
2. An antique is specific.
3. Saying “my” before something makes it specific like “my stock”
4. stock in a closely held corporation (even wothout saying “my”) is specific.

Question 4

What is a genral devise?

Answer 4

A gift of something that is not unique.

Question 5

What is a general devise payable out of?

Answer 5

A general devise is payable out of the general assets of the estate.

Question 6

If someone gives someone “100 shares of Microsoft stock” what are the forms of payment out of the estate?

Answer 6

the executor can make good the gift to the
beneficiary by giving beneficiary either the 100 shares of Microsoft or the fair market value of 100 shares of Microsoft as measured by its value at the time of testator’s death.

Question 7

“To John I leave $1000 from my account at Bank of
America.” If there is only $900 in the account at the Bank of America, how does the executor pay John?
What kind of devise must happen?

Answer 7

[a] First from the account at the Bank of America ($900)
[b] Then the balance ($100) comes from general assets if necessary.

This is a demonstrative devise

Question 8

What is a residuary devise?

Answer 8

All other property not expressly disposed of in the will

Question 9

What are the 3 reasons to classify gifts?

Answer 9

[1] For ademption by extinction problems: Only specific gifts adeem by extinction. Thus, if a gift is classified as general, there is no issue of ademption by extinction.
[2] For ademption by satisfaction problems: Typically, only general gifts adeem by satisfaction
[3] For abatement problems: There is a priority whereby gifts to beneficiaries have to be cut back or abated to come up with the statutory share for the omitted child or omitted spouse or omitted domestic partner.

Question 10

What is ademption by extinction?

Answer 10

Ademption by extinction is when a specific gift

fails because testator did not own the property at testator’s death.

Question 11

There is no ademption by extinction in California in the following situations:

Answer 11

[1] Securities changing form
[2] Conservator sells off the assets.
[3] Eminent domain award, casualty award, or an installment sale of property in which testator holds the deed of trust as security for the sale.

Question 12

There is no ademption by extinction in California in the generally when

Answer 12

testator did not intend the gift to fail

Question 13

What about for gifts that are made extinct during the testator’s lifetime?

Answer 13

Try to classify the gifts as general or try to trace.

Question 14

What is ademption by satisfaction?

Answer 14

Testator gives the beneficiary an inter vivos down payment on a devise

Question 15

Testator executes his will leaving a $1,000 devise to
beneficiary. Testator later goes to beneficiary and says, “I’ve left you a $1,000 devise in my will. But why should you have to wait for me to die? Here is $100 on account.” What result?

Answer 15

beneficiary will take only $900

Question 16

What are the 4 ways you establish a satisfaction?

Answer 16

1. The will itself provides for a reduction in the inter vivos gift
2. Testator declares in a contemporaneous writing that the gift is a satisfaction.
3. Beneficiary acknowledges in a writing (at any time) the satisfaction.
4. The property given in the satisfaction is the same property that is the subject of a specific gift to the beneficiary. This is an ademption by satisfaction and also by extinction, because the property no longer exists in testator’s estate.

Question 17

What if beneficiary receives a satisfaction but predeceases the testator?

Answer 17

Where the issue of the predeceased beneficiary takes the devise under the anti-lapse statute, the issue of the predeceased beneficiary is treated as if he or she had received the satisfaction, unless testator’s will or contemporaneous writing states otherwise

Question 18

How to value the satisfaction if not made in cash? If the value of the satisfaction is expressed in the
contemporaneous writing of the testator or in a
contemporaneous writing of the beneficiary, that value is what?

Answer 18

conclusive.

Question 19

How to value the satisfaction if not made in cash? when there is no value given in a contemporaneous writing?

Answer 19

the property is valued at its fair market value, measured at time the transferee came into possession of the property.

Question 20

What is an advancement?

Answer 20

It is an inter vivos down payment made by an intestate to an heir apparent.

Question 21

How do you establish an advancement?

Answer 21

[1] Intestate declares in a contemporaneous writing that the gift is an advancement.
[2] Heir acknowledges in a writing (at any time) that the gift is an advancement.

Question 22

What if heir-apparent receives an advancement but predeceases the Intestate?

Answer 22

The issue of the heir-apparent is not treated as having received an advancement, unless the advancement provides otherwise.