Testamentary Gifts

Question 1

Devise

Answer 1

Gift of real property

Question 2

Bequest

Answer 2

Gift of personal property; two types: (1) a specific bequest and (2) a specific bequest of a general nature

Question 3

Specific Bequest

Answer 3

A gift of a particular item of property distinct from all other objects in the testator’s estate.

Question 4

Specific Bequest of a General Nature

Answer 4

A gift of an item of personal property that is not distinguishable from the rest of the testator’s estate until the testator dies.

Question 5

Legacy

Answer 5

A gift of personal property not sufficiently described to be specific. (usually money)

Two types: (1) general legacy and (2) demonstrative legacy.

Question 6

General Legacy

Answer 6

A gift of a general economic benefit payable out of the general assets of the state without requiring any particular source of payment.

Question 7

Demonstrative Legacy

Answer 7

A gift of a general amount to be paid from a particular source or fund.

It is treated as a specific legacy to the extent that the source of payment is available AND a general legacy to the extent of any shortfall of that source of payment.

Question 8

Residuary Estate

Answer 8

Gift of remainder of estate after all debts and other gifts are paid.

Question 9

Private Gift

Answer 9

A gift for private beneficiaries.

Question 10

Public Gift

Answer 10

A gift for public beneficiaries.

Question 11

Ademption

Answer 11

When a gift fails because the property is no longer in the testator’s estate.

ONLY applies to specific devises and bequests.

Question 12

Ademption: “Identity” Approach

Answer 12

If a specifically bequeathed property is not in the testator’s estate at death, the bequest is adeemed and the beneficiary takes nothing.

Beneficiary is NOT given a substitute gift or the value of the gift.

Question 13

Partial Ademption

Answer 13

Where testator devises a large gift and then conveys a portion of the gift during their life.

The beneficiary takes the remaining portion.

Question 14

Common Statutory Exceptions to Ademption Doctrine

Answer 14

(1) Replacement Property - The beneficiary may receive replacement property if the testator replaced the gifted item with another similar item.

(2) Balance of Purchase Price - If testator sold the gift item and the purchaser still owes money to testator, some states allow the beneficiary to receive the remaining money.

(3) Proceeds of Condemnation Award or Insurance - The beneficiary receives a condemnation award paid after the testator’s death or casualty insurance proceeds for the loss of the property if they are paid after testator’s death.

(4) Proceeds from Sale by Guardian or Conservator - The beneficiary may be entitled to a general pecuniary legacy equal to the amount of the proceeds if the testator became incompetent and the specifically devised property was sold by a guardian.

Question 15

Ademption by Satisfaction

Answer 15

When the beneficiary receives gifted property before testator’s death.

Most states require a writing.

UPC States -> this doctrine does not apply unless the testator provides for satisfaction in the will or a contemporaneous writing, or the devisee acknowledges, in writing, the gift as one in satisfaction.

Question 16

Increases in Property After Execution of Will

Answer 16

IRRELEVANT!

Appreciation and depreciation of specifically gifted property between will execution and death is normally irrelevant.

Question 17

Securities Acquired After Will Execution

Answer 17

Common Law: A specific bequest of stock includes any additional shares produced by a stock split but does not include shares produced by a stock divided.

UPC: A specific bequest of stock includes additional shares from stock split, and stock dividends.

Question 18

Newly Purchased Securities

Answer 18

The beneficiary DOES NOT take new securities that have been purchased or acquired by the reinvestment of dividends.

Because here there is the option to get cash.

Question 19

Exoneration of Liens

Answer 19

Common Law (and other states): liens are exonerated.

UPC and (other states): Liens on specifically devised property are NOT exonerated UNLESS the will specifically directs it.

The beneficiary takes the property subject to the debt.

Question 20

Abatement

Answer 20

Process of reducing testamentary gifts in cases where the estate assets are not sufficient to pay all claims against the estate and satisfy all bequests and devises.

Question 21

Order of Abatement for Testamentary Gifts

Answer 21

(1) Property that passes by intestacy
(2) Residuary estate
(3) General legacies
(4) Demonstrative legacies
(5) specific bequests and devises

This means that (5) is the strongest and the beneficiary is most likely to get it whereas with (1) if the testator’s estate is insufficient, the beneficiary will lose it first.

Question 22

Lapse

Answer 22

When the gift fails because the beneficiary has predeceased the testator or if the beneficiary is not treated as surviving the testator because of disclaimer or another legal reason.

Question 23

Distribution of Lapsed Gifts

Answer 23

Controlled by:
(1) the express terms of the will
(2) Rule of Law – such as anti-lapse statute
(3) Residuary clause
(4) Intestacy

Question 24

Anti-Lapse Statutes

Answer 24

Statutes that operate to save the gift from lapsing by substituting the descendants of the dead beneficiary in place of the dead beneficiary. (In these cases, the dead beneficiary has predeceased the testator.)

The statute applies unless a contrary provision appears in the will.

In most states, words of survivorship are contrary to will provision.

Under the UPC, mere words of survivorship are NOT sufficient to negate application of the statute.

Question 25

Lapse in Residuary Gift

Answer 25

Common Law: Deceased beneficiary’s share passes by intestacy.

Modern Rule: Surviving residuary beneficiaries divide the deceased beneficiary’s share.

Question 26

Class Gift

Answer 26

If a will makes a gift to a class, only the class members who survive the testator take a share of the gift.

Exception:
- If the will says otherwise; or
- if the anti-lapse statute’s requirements are met.

Question 27

Gifting a Dead Beneficiary

Answer 27

A gift to a beneficiary who was dead at the time the will was executed is VOID.

In many states, the lapsed rules apply to the void gifts.