Lapse, Ademption, & Exoneration of Liens*** Flashcards
T executes a will in 06. It provides “I give the sum of $6k to my sister Paula and leave the residue to my brother, X.” Paula dies in 07. She survived by H and two kids. Paula has a will which leaves all of her estate to H.
T dies in 12. Who takes the $6k in a state without an anti-lapse statute? In a state with an anti-lapse statuteWhy?
W/o an ALS, Brother takes all because the gift will have lapse
W/ an ALS, Paula’s kids split the $6,000
Under an ALS, when the beneficiary named in the will dies before T (and the beneficiary is T’s descendant, sibling, or niece/nephew), the gift lapses and the issue of the deceased beneficiary take in the beneficiary’s place.
When does PA’s anti-lapse statute apply?
When the predeceasing beneficiary is T’s descendant, sibling, or child of sibling who leaves issue who survive T.
How can lapse not apply?
Anti-lapse statute.
If the case of a gift to T’s sibling or to child of a sibling, the gift will lapse to the extent it would pass as a result to T’s _____ or ______.
Own spouse or issue.
T executes a will in 06. It provides “I give the sum of $6k to my sister Paula and leave the residue to my wife, W.” Paula dies in 07. She survived by H and two kids. Paula has a will which leaves all of her estate to H.
T dies in 12. Who takes the $6k? Why?
The gift would lapse and would pass to W, as a gift to T’s sibling or to child of a sibling, the gift will lapse to the extent it would pass as a result to T’s spouse or issue.
“I devise Blackacre to the children of my friend, John. I leave the residue to my sister X.” At the time T executes, John has 3 kids: A, B, and C. Thereafter and during T’s lifetime, Bates has another child, D and his son A dies, leaving A Jr.
T dies. He is survived by John Bates, B, C, D, A Jr. AND by his sister, X. Who takes Blackacre? Why?
B, C, and D take Blackacre equally. Not A Jr.
When there is a CLASS GIFT to a group of persons generically described as a class and some class member predeceases T and the lapse statute does not apply, the surviving class members take.
“I devise Blackacre to the children of my brother, John. I leave the residue to my sister X.” At the time T executes, John has 3 kids: A, B, and C. Thereafter and during T’s lifetime, Bates has another child, D and his son A dies, leaving A Jr.
T dies. He is survived by his brother John, B, C, D, A Jr. AND by his sister, X. Who takes Blackacre? Why?
B, C, D, and A Jr.
Because the class involved family, the anti-lapse statute applies and A Jr. is qualified to take. PA’s lapse statute applies when the predeceasing beneficiary is T’s dependent, sibling, or CHILD OF A SIBLING who leaves issue who survive T.
“I devise all the rest, residue, and remainder of my estate in equal shares to my good friend Alan, my business partner Betty, and my daughter Carla.” Alan predeceases T, leaving a child (Alan Jr.) who survives T. T, a widower, is also survived by Betty, Carla, and by his only son (Stephen). Who takes the residuary estate? Why?
1/2 to Betty, 1/2 to Carla.
If the residuary estate is devised to two or more persons AND the gift to one of them fails for any reason, the surviving residuary divisees take the entire residuary estate in proportion to their interests in the residue.
“I devise all the rest, residue, and remainder of my estate in equal shares to my good friend Alan, my business partner Betty, and my daughter Carla.”
Carla predeceases T, leaving a child (Carla Jr) who survived T. Alan and Betty also survive T.
T, a widower, is survived by Alan, Betty, Carla Jr, and by his only son (Stephen). Who takes the residuary estate? Why?
1/2 to each Alan, Betty, and Carla Jr.
This reverts back to lapse. Carla was T’s decedent and she left issue. Thus, Carla Jr. steps in for Carla.
Money needed to pay expenses and claims is raised by selling . . . place in order of first sold to last. Also, what is this called?
General gifts, residuary estate, subject matter of demonstrative and specific gifts, intestate property
Abatement
Intestate Property
Residuary Estate
General gifts
Subject matter of demonstrative and specific gifts.
Type of bequest: I devise Blackacre to my son John.”
Specific bequest
Type of bequest: I devise my car to my son John”
Specific bequest
Type of bequest: I give the sum of $5k, to be paid out of the proceeds of my sale of my Acme stock, to my sister Sarah.
Demonstrative legacy
Type of bequest: I give al the rest, residue, and remainder of my property to my wife.
Residuary bequest
What is a general legacy?
A gift of a general pecuniary amount.
What is a demonstrative legacy?
A gift of a pecuniary amount with instructions as to funding.
When do specific gifts to T’s spouse or issue abate?
Last
What happens when a specific gift no longer exists when T dies?
The gift is adeemed.
T bequested a demonstrative legacy of $5,000, to be paid out of proceeds from the sale of Acme stock, to her son. T sold her Acme stock in 2010. T dies in 2012. Does ademption apply to this gift? Why or why not?
No.
Ademption does not apply to demonstrative legacies. The gift will be funded with available property.
Assume a will is executed before T is declared incompetent. If specifically devised property is sold by the conservator OR if condemnation award or insurance proceeds relating to the property are paid to the conservator, what does the specific devisee get? When will the devisee get nothing?
A general legacy equal to the net sales price, condemnation award, or insurance proceeds.
Nothing if the testator’s disability has been adjudicated to have ceased and the testator survives the adjudication by one year.
In the ademption context, a specific devisee has the right to the remaining property specifically devised AND (3)
Any balance of purchase price owing from purchaser when K is still executory at T’s death;
Any amount of condemnation award for the taking of property, to the extent unpaid at T’s death; AND
Any amount of fire or casualty insurance proceeds unpaid at death.
“I give and bequeath my Rembrandt painting to my daughter Dora.” The painting was destroyed by fire in 2014. The painting was insured and the ins. co. duly paid its full value of $150k to T. T dies. Is Dora entitled to the insurance proceeds? Why or why not?
No. The gift is deemed. Insurance was already paid.
“I bequeath my 100 shares of stock is XYZ to my son, Simon.” At his death, T owned 200 shares of stock in XYZ, with the extra 100 resulting from a stock split 6 months after execution. How many shares does Simon take? Why?
All 200.
A specific devisee takes “any additional or other securities of the same entity owned by the testator because of action INITIATED BY the entity, including any acquired by exercise of purchase options.
“I bequeath my 100 shares of stock is XYZ to my son, Simon.” XYZ was subsequently bought by ABC. As part of the buy out, ABC gives all XYZ shareholders 1 shares of ABC for every 2 shares of XYZ. When T dies, he owns 50 shares of stock in XYZ. How many shares does Simon take? Why?
All 50.
A specific devisee is entitled to securities of another entity owned by the testator as a result of a merger, consolidation, reorganization, or other similar action initiated by the entity.
