REVOCATION BY CHANGE IN PROPERTY HOLDINGS (ADEMPTION) Flashcards
Classification of 4 types of gifts:
- Specific devise
- General devise
- Demonstrative devise
- Residuary devise
Specific devise
A specific devise is a gift of a particular item.
Testator must have the intent the beneficiary take this particular thing, and nothing else. Because testator is dead, we must look to objective manifestations of testator’s intent.
General devise:
A general devise is payable out of the general assets of the estate.
Demonstrative devise:
This is a hybrid between a general and specific gift
Residuary devise:
All other property not expressly disposed of in the will. It is
easy to recognize.
Why classify gifts? Three reasons:
[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: (You can have a specific gift adeem by satisfaction, too, but this is not common.
[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.
Note: It is easy to classify a residuary gift or demonstrative gift. Thus, on the bar exam, the fight is always about whether the gift is specific or general.
Ademption by Extinction
Ademption by extinction is when a specific gift
fails because testator did not own the property at testator’s death.
Ademption by Extinction CL Test:
- If the testator did not own the specific property at his death, the gift failed, or adeemed by extinction.
- Thus, intent was important only for determining whether gift was general or specific.
Ademption by Extinction - CA:
Intent is important not just for determining whether a gift
is general or specific, but a second time in determining whether testator intended the gift to fail.
[1] There may be situations where testator does not own the property at death, but testator did not intend the gift to fail.
[2] Thus, in California, we do not use a simple mechanical test.
There is no ademption by extinction in California in the following situations. The common thread is that testator did not intend the gift to fail:
- Securities changing form
- Conservator sells off the assets
- Eminent domain award, casualty award, or an installment sale of property in which testator holds the deed of trust as security for the sale.
Ademption by Satisfaction
T gives the beneficiary an intervivos down payment on a devise
How to establish a satisfaction: 4 alternative ways:
- the will itself provides for a deduction of the intervivos 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.
What if beneficiary receives a satisfaction but predeceases the testator?
Where the issue of the predeceased beneficiary takes the
devise under the anti-lapse statute (see below), 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.
How to value the satisfaction if not made in cash?
[1] 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
conclusive.
[2] In all other cases, the property is valued at its fair market value, measured at time the transferee came into possession of the property.
Advancements
an intervivos down-payment made by an intestate to an heir apparent
