Post-Execution Changes in Beneficiaries in Property Flashcards
What happens if a will beneficiary predeceases the testator?
The gift lapses
What is the effect of state anti-lapse statutes?
These save the gift if the predeceasing beneficiary was in a specified degree of relationship to the testator (e.g, descendant, grandparent, etc) and left descendants who survive the testator. These descendants will take by substitution unless a contrary will provision exists.
Are words of survivorship in a will sufficient to defeat application of an anti-lapse statute?
Yes, in most states, but not under the UPC.
What happens when there are multiple beneficiaries of the residuary state and one predeceases the testator and the devise cannot be revived by an anti-lapse statute?
Common law: The surviving residuary beneficiaries, absent a contrary will provision, may not divide the deceased beneficiary’s share among them. Rather, the share passes by intestacy.
“No residue of a residue” rule: Most states. The surviving residuary beneficiaries may divide the share in proportion to their interest in the residue.
Note: If the anti-lapse statute does apply, the deceased beneficiary’s descendants take their residue share.
What are the survival rules for class gifts?
If a will makes a gift to a class, only the class members surviving the testator may take a share unless the will provides otherwise or the anti-lapse statute applies.
What if a will makes a gift to a beneficiary who was already dead when the will is executed?
The gift is void and the same rules usually apply that apply to lapsed gifts.
What is a specific devise or legacy?
A gift of a particular item of property distinct from all other objects in a testator’s estate
What is a general legacy?
A gift of a general economic benefit payable out of the general assets of the estate without requiring any particular source of payment.
What is a demonstrative legacy?
A gift of a general amount that is to be paid from a particular source of fund. It is a hybrid and treated as a specific legacy to the extent the source of the payment is available and as a general to the extent of any shortfall of that source of payment.
What is a residuary estate?
The balance of the testator’s property after paying debts, expenses, and taxes and the specific, general and demonstrative gifts.
What is ademption?
The failure of a gift because the property is no longer in the testator’s estate at the time of death.
To what does ademption apply?
It applies only to specific devises and bequests. If specifically bequeathed property is not in the testator’s estate at death, the bequest is deemed and the beneficiary takes nothing. Courts usually do not inquire into the testator’s intent or the reason the property is no longer in the estate.
A general or demonstrative legacy cannot be adeemed by the absence of cash or specific funds from the estate and will be satisfied with the sale or gift of other assets. (A gift of stock will be interpreted as general unless it says “my XX shares of XYZ”)
May a gift be partially adeemed?
Yes (e.g., a gift of a tract of land that the testator partially conveys) and the beneficiary takes the remaining part.
What are common statutory exceptions to the ademption doctrine?
A specific devisee or property no longer in the estate may be entitled to: proceeds from the sale if the contract was executory at the time of the testator’s death, casualty insurance proceeds if paid after the testator’s death, a condemnation award paid after death, securities in another entity that were the result of an unction on the part of the entity whose stock was bequeathed, and the remaining proceeds paid to a guardian of an incompetent testator.
What is an accession?
An increase to property after the execution of a will
