Will - Beneficiary Issues Flashcards
What is the purpose of NY’s anti-lapse statute?
General rule = If a benefiicary DIES during the testator’s lifetime, the gift to the beneficiary LAPSES (i.e. fails), UNLESS the gift is SAVED by an anti-lapse statute
What are the 2 reqs for the application of NY’s anti-lapse statute?
In NY, a gift does NOT lapse, but VESTS in the deceased beneficiary’s ISSUE IF: 1) the predeceased beneficiary was the testator’s ISSUE or NATURAL SIBLING (i.e. brother/sister); AND 2) the predeceased beneficiary LEAVES an ISSUE that survives the testator NOTE: Does NOT apply if condition precedent(i.e. “if he survives me”) is used If “adopted-out” childis SPECIFICALLY listed as beneficiary in Will →adopted-out child’s issue can take under anti-lapse statute REMEMBER: normally adopted out children have NO inheritance rights from the birth parents OR family DOES NOT APPLY TO SPOUSE (even if the predeceased beneficiary leaves a will giving everything to that spouse!)
What is the effect if a beneficiary “disclaims” a gift?
Same as w/ intestacy→ a disclaimant is CONSIDERED to have PREDECEASED the testator NY’s anti-lapse statute applies IF (i) the disclaimant is an ISSUE or SIBLING of the testator; AND(ii) the disclaimer leaves a surviving ISSUE→ gift goes to issue
What is the Surviving Residuary Beneficiary Rule?
Absent CONTRARY provision in the Will… When RESIDUARY is devised to 2 or more persons & gift to 1 fails/lapses (& anti-lapse does NOT apply) → then OTHER residuary beneficiaries take the entire residuary estate, in proportion to their interest in the residue NOTE: if anti-lapse statute APPLIES, then the gift passes to the ISSUE
What is the rule re: gifts to a “generic class”, which has a predeceased member?
Absent a contrary prvn in the Will…. If the Will makes a gift to a group of persons as a “generic” class (i.e. gift to “children”, “siblings”, etc) AND some members of that group PREDECEASE the testator → the SURVIVING class members TAKE in equal share BUT, IF NY’s anti-lapse statute applies (i.e. member is ISSUE or SIBLING of testator AND leaves a surviving issue) → the share GOES to the predeceased member’s ISSUE NOTE: if the gift was “INDIVIDUALLY” named (i.e. not as a class), then the lapsing share will go to the RESIDUARY (unless anti-lapse applies)
What 2 groups CANNOT take part of a class gift?
The 2 groups are… 1) “Adopted-out” children: if a class gift is to “children”, ANY adopted out children DO NOT take as part of the “class” (REMEMBER: adopted out children have NO inhereitance rights from birth parents OR birth family) BUT, the adopted-out child WOULD take as a class member in the adopting family 2) Later-born class members (after testator OR life tenant dies) are NOT a part of the “class” (i.e. the Rule of Convenience) BUT, children in GESTATION at time of testator’s or life tenant’s death ARE class members (Womb Rule)
What is the rule when a testator AND a beneficiary die simultaneously?
Revised Uniform Simultaneous Death Act (RUSDA) Absent a Will prvn to the contrary… If a BENEFICIARY and testator die simulatenously (or almost simultaneously) AND there is insufficient CLEAR AND CONVICING evidence to prove the beneficiary has SURVIVED the testator by MORE THAN 120 HRS (5 DAYS)→ PRESUME that the BENEFICIARY has PREDECEASED the testator IF (assumed) predeceased beneficiary is an ISSUE or SIBLING of the testator, then NY’s anti-lapse statute applies (assuming the predeceased beneficiary has left a surviving issue)
What is the rule for distributing jointly-held property when both joint tenants die simultaneously?
Revised Uniform Simultaneous Death Act (RUSDA) Assuming both dies w/in 120hrs (5 days)… STEP 1: RUSDA theoretically SEVERS the right of survivorship in the joint property, rendering it a tenancy in common STEP 2: Property of a SPECIFIC co-owner passes as though HE survived the OTHER co-owner, so the property would go to HIS issue NOTE: the distribution would be the SAME for tenants by the entirety and joint bank accounts E.g.H & W die simultaneously & JT w/ right of survivorship. H has 2 children, A & B, from a previous marriage, & a child w/ W. TIC - A, B, & C each take 1/3 of H’s half and then C takes W’s half.
What is the effect on a Will if the testator marries after Will is executed?
Marriage AFTER the execution of a Will has NO effect on the validity of the Will, BUT it MAY affect gifts and dispositions under the Will NY law provides for a “right of election” so that a testator CANNOT disinherit his spouse
What is the effect on a Will if the testator “unmarries” after Will is executed?
If a ct renders a FINAL decree (i.e. NOT in process) of divorce, annulment or separation (i.e. NOT an agmt) AFTER the execution of a Will, ALL gifts and fiduciary appointments in favor of the former spouse are REVOKED by operation of law EFFECT = read the Will as if the former spouse has PREDECEASED the testator property that WOULD have passed by operation of law are OVERRULED (i.e. a former spouse couldn’t take an insurance benefit EVEN IF named on the docs) NOTE: NY’s anti-laspe statute does NOT apply b/c a spouse is NOT an issue or a sibling EXCLUSIONS: All gifts and fiduciary appointments in favor of the ISSUE of the former spouse are NOT revoked An appointment of the former spouse as GUARDIAN of the couple’s children is NOT affected If the couple RECONCILES and REMARRY, ALL prvns in favor of the “former” spouse are RESTORED
What is the effect of pretermitted children (birth or adoption of a child AFTER execution of will) on a Will?
The birth or adoption of a child after execution of a will DOES NOT invalidate a will - - a presumption is created that the omission of the child was accidental and apply NY statute
NY Statute (4 applications)
- if the testator has no children living at the time the will executed - - > the omitted pretermitted children (after born/adopted) take as if Intestacy (assume w/out will) (which will come from other beneficiaries proportionately)
- if the testator had living children - - > then pretermitted children WILL SHARE in the disposition w/ other children (act as if a CLASS GIFT) … the pretermitted child will take the same quality or type of interest as the bequest of other children
- if the testator had living children AND there were A SMALL PROVISION for the living child (disinheriting them) - - > then pretermitted children WILL GET INTESTACY (which will come from other beneficiaries proportionately)
- if the testator had living children AND there were NO PROVISION for the living child - - > then pretermitted children WILL GET NOTHING (ex WILL SHARE in the disposition w/ other children which is nothing)
NY statute does APPLY when
(i) the omission of the child was/appears intentional
(ii) testator PROVIDED FOR CHILD OUTSIDE THE WILL (life insurance, totten trust) AND it was intended this to be in lieu of a provision of the will
(iii) the child was otherwise provided for or mentioned the child in the will
1) If the testator has ONE OR MORE children when the Will was executed; AND… there is NO provision made for ANY child → the pretermitted child INHERITS NOTHING the Will made gifts to the other children→ the pretrmitted child SHARES the amt w/ the other children AS IF a CLASS gift was made The pretermitted child takes from “the other children proportionately, not equally” it appears that the testator’s INTENTION was to ONLY make a “ltd provision” to the children living at the time the Will was executed→ the pretermitted child takes his INTESTATE share (which will come from other beneficiaries proportionately) 2) If the testator had NO CHILDREN when the Will was executed→ the afterborn child takes his INTESTATE share
When does the EPTL protect pretermitted children?
“Pretermitted children” = children born OR adopted AFTER the Will is executed Rule = the EPTL ONLY protected pretermitted children who are… NOT provided for by any settlement; AND NEITHER provided for NOR mentioned in the Will
What are the rules for Right to Surviving Spouse?
Surviving Spouse gets the following things
- Spouse support
- Social security
- Pension plan (can waive but subject to strict scrutiny)
- Homestead exemption (certain acrage or real property exempt from creditor claims) - Personal property and Elective Shares - Under New York law, a surviving spouse is entitled by operation of law to take the greater of $50,000 or 1/3 of the decedent’s net estate, along with certain exempt personal property such as
(i) family photos,computer DVD/CD not exceeding 2,500
(ii) a motor vehicle not exceeding $25,000 in value
(iii) farm equipment, domestic animals with 60 day of food not exceeding 20,000
(iv) household furnishings and appliance and jewelry (unless disposed of in the will) not exceeding 20,000
(v) money or cash equivalent no exceed $25,000 but when assets are insufficient to satisfy reasonable funeral expense the personal rep msut first apply such money to defray any deficiency in such expenses
This are exempt items not included in Net estate (which will be times by 1/3)
The net estate is after debt, administration expense, and funeral expense (but not taxes) .This is irrespective of what is left to the spouse under the will - so can take what is left in will or elective share
Gross estate includes any property that decedent had reasonable control over in life and transfer made by decedent with one yr of life without spouse consent except
- life insurance
- irrevocable transfers including trust PRIOR to the marriage of decedent and surving spouse
(not included in gross estate)
The elective share is satisfied first from property received by the surviving spouse under the will, and if that amount is less than the 1/3 or $50,000 required under the law, then the remainder comes from PRO RAT contributions derived from ALL other beneficiaries under the will and recipients of testamentary substitutes.
