Wills - Changes Between Will Execution and Death Flashcards
Changes to Property Between Will Execution and Testator’s Death
Classifying Types of Testamentary Gifts
Devise: gift of real property. Recipient is devisee.
Bequest: gift of personal property.
-> A SPECIFIC BEQUEST is a gift of particular property distinct from all other objects in the estate.
Legacy: gift of personal property not specifically described that much. Recipient is legatee.
-> Most commonly this is a gift of money. “I leave 10k dollars to Walter”.
-> Demonstrative Legacy = gift of money payable from designated fund. “I leave 10k from my Wells Fargo fund to Walter”.
–» If demonstrative legacy account is insufficient, IT WILL TAKE FROM OTHER ASSETS IN THE ESTATE.
Residual Gift: gift of the remainder of the estate. It could be the main gift or it could be the leftover crap, just depends on how it works.
Private Gift vs. Charitable Purpose: you can also classify gifts based on type of beneficiary. Either for private parties or charities.
Changes in Circumstances: Ademption of Specific Gifts by Extinction
This means the item specifically given is no longer in the estate due to being sold, destroyed, etc.
General Rule: the gift adeems (fails) according to the identity rule. The beneficiary doesn’t get a substitute gift OR the value of the gift.
-> Ex: “I leave my Dell Computer 9350 to John” but then after that he replaces it and buys an upgraded model. The beneficiary receives nothing
Exceptions:
1) “Balance of the Purchase Price”: If the testator sold the gifted item and dies and the purchaser still owes the testator some of the money, that money will go to the beneficiary.
2) Proceeds from:
-> Condemnation
-> Insurance
-> Foreclosure
on gifted tiems
3) Proceeds from sale by guardian or conservator of the specific property (that’s because it’s not the testator who decided to give up that item, so the beneficiary shouldn’t be hurt by that choice by someone else)
Ademption of Corporate Securities
Corporate Securities: it’s a specific gift and subject to ademption IF words of possession or identification are used.
-> Ex: Testator’s will bequeaths “my” 100 shares of Acme stock to Karen and 100 shares of Shark stocks to Lauren. Testator dies with no stock. What happens to these gifts? The gift to Karen adeems because the gift was specific “my shares” but the gift to Lauren will still take effect (she gets the date of death value of 100 shares of Shark stock because the gift was GENERAL and lacked indicators of possession or identification.
-> Ex 2: Testator’s will bequeaths “my 100 shares of Acme to Karen and my 100 shares of Shark stock to Lauren”. Acme declared a 2 for 1 stock dividend and Shark merged with Wayne incorporated and testator receives 50 shares in the new corp, Wayne-Shark. What will Karen and Lauren receive? Answer: Karen receives 150 shares of Acme stock and Lauren receives 50 shares of Wayne-Shark stock.
Ademption by Satisfaction (equivalent of Advancements under Intestacy)
Satisfaction: gift in will given to beneficiary between execution and death. In other words, a gift before the testator dies. Can be total or partial satisfaction.
INTENT for the gift to be a satisfaction must be expressed at the time of the gift and it must be in writing.
Proven by:
1) Language in will
2) instrument of gift or contemporaneous writing
3) Donee acknowledges in writing any time
Monetary gifts create the most issues.
Change in Value of Gifted Items: Appreciation and Depreciation
Appreciation and Depreciation of specifically gifted property between will execution and death is IRRELEVANT.
Exoneration
Exoneration (paying off debt) is not automatic. It doesn’t happen by default.
What if gift is made but there’s debt against it?
Ex: testator leaves house to Harold and car to Carol each with a mortgage/lien. Are those donees entitled to have those debts paid off by estate assets assuming the will is silent? NO. They only receive the EQUITY in the item unless the will EXPRESSLY provides for EXONERATION of debts.
Abatement
This is asking: what gifts fail when estate property is inadequate to satisfy all testamentary gifts or there are debts on the estate? What gets used up first assuming will is silent:
Use up (order of abatement):
1) Intestate property
2) Residuary property
3) General gifts to non-relatives
4) General gifts to relatives
5) Specific gifts to non-relatives
6) Specific gifts to relatives
Disclaimers (same as intestacy)
Just as heirs may disclaim, so too can beneficiaries.
The property passes as if the beneficiary died first. So look to the terms of the will and see what the will says to do if the beneficiary had already died.
Changes to People between Will Execution and the Testator’s Death
Just as intestate heirs must survive decedent by 120 hours…
Will beneficiaries must survive testator by any amount of time. Could be a mere instant. Only if survival cannot be established by clear and convincing evidence is a beneficiary deemed to have died first.
But that isn’t normally the case because most wills impose a survival period of 30, 60, 90 days etc. Those are effective
Lapse
This is where the beneficiary predeceases the testator or is treated as not surviving (because of disclaimer for example). The gift fails.
Lapse and the operation of the anti-lapse statute are COMMONLY TESTED.
Assume beneficiary died first: where does property go? Look to express terms of the will. If the will indicates where the property is to go, that is where it goes. It’s common for a will to say I leave this property to A, and if A dies first, it goes to B. If that doesn’t happen, and there’s no express provision in the will, then the gift could be saved by the anti-lapse statute.
If the anti-lapse statute is inapplicable, then it will pass by the residual clause. And if the residual clause is lapsing, we could end up with a partial intestacy.
Anti-Lapse Statute
This prevents lapse in some circumstances by substituting the descendants (the children usually) of the predeceased beneficiary instead of that beneficiary.
It applies in CA if the descendants of predeceased beneficiaries who are:
1) Testator’s kindred OR
2) Kindred of surviving, deceased, or former spouse
Ex 1: Testator’s will says I leave 20k to brother Bruce and the rest to my friend Perry. Bruce dies first survived by his 2 kids and wife. What happens to Bruce’s gift? Bruce’s kids each receive 10k because of the anti-lapse statute.
Ex 2: Will says I leave 20k to brother Bruce IF HE SURVIVES ME and the rest to my friend Perry. Bruce dies first survived by 2 kids and wife. What happens? Anti-lapse statute will not apply because the will required Bruce to survive, so Bruce’s kids get nothing.
Ex 3: Will says I leave 20k to brother Bruce and the rest to friend Perry. Perry died first survived by 2 kids and wife. What happens? The residual of the estate passes by intestacy because Perry is just a friend, not a kindred, so the anti-lapse statute does NOT apply.
Partial Lapse in the Residual Clause
Ex: Testator’s will says “I leave the residual of my estate to my FRIENDS, A, B, and C. A dies first. how is estate distributed? CA law implies survivorship language even though it was lacking. B and C split A’s lapsed gift. The 1/3 that A was supposed to get does not pass by intestacy.
How does this work involving class gifts? The anti-lapse statute applies to class gifts whether the class member’s death occurred before or after the testator executed the will.
-> Ex: Testator’s will says I leave all my property to my 3 kids. 1 child James predeceases survived by his 2 kids. What happens to James’ share? Even though it’s a class gift, the anti lapse statute still applies and each of James kids get 1/6 of testator’s property.
