Wills - Construction Problems Flashcards
If a beneficiary named in a will predeceases the testator, absent an alternate disposition of the devise specified by the testator,
the devise lapses into the estate’s residue UNLESS the jurisdiction’s anti-lapse statute preserves the devise for the beneficiary’s descendants.
Under an anti-lapse statute, devises will vest in the descendants of the predeceased beneficiary if the predeceased beneficiary:
Is a blood relative of the testator;
AND
Has descendant(s) who survive the testator.
Residue of a Residue. CL v. modern view.
At common law, an invalidated residuary devise passed to the testator’s heirs through intestate succession.
Under the modern view, if the residue is devised to two or more persons, an invalidated residuary devise will pass to the other residuary beneficiaries rather than the testator’s heirs.
Under the doctrine of ademption,
if the subject matter of a specific devise is NOT in the estate at the time of the testator’s death, the devise to the beneficiary adeems or fails (e.g., the testator leaves her diamond ring to her daughter in her will; however, before the testator dies she sells the ring to a pawn shop – the specific devise to her daughter adeems upon the testator’s death).
At common law concerning ademption, the testator’s intentions were
irrelevant.
In contract to CL, in most jurisdictions today, a specific devise will adeem
ONLY IF the testator intended the devise to fail.
If the testator did not intend for a specific devise to fail, the beneficiary is entitled to:
Any property in the testator’s estate, which the testator acquired as a replacement for the specific devise;
OR
A monetary devise equal to the value of the specific devise.
Generic Descriptions, how are they interpreted?
Any property described in generic terms is interpreted under the circumstances existing at the time of the testator’s death, rather than when the will is executed (e.g., a devise of “my car” is interpreted as a devise of the testator’s car at the time of death, not the testator’s car at the time of will execution).
What are slayer statutes?
A person who feloniously and intentionally kills the decedent is barred from claiming a share of the decedent’s estate as either an heir or a beneficiary under the decedent’s will.
Generally, the decedent’s estate is distributed as if the killer had predeceased the decedent.
A beneficiary under a will can
disclaim or renounce his interest under a testator’s will causing the disclaimed property to pass as if the disclaiming party predeceased the testator.
A valid disclaimer must:
Be in writing and signed by the person making the disclaimer;
Describe the interest being disclaimed sufficiently;
AND
Be delivered or filed.
Timing of disclaimers, CL v. some states v. UPC
Under the common law, a disclaimer must be made within a reasonable amount of time.
Some states require a disclaimer to be made within 9 months after the testator’s death.
Under the UPC, a disclaimer may be made at any time.
Specific Devises.
A devise is specific if the subject matter of the devise is specific personal or real property (e.g., a devise of a specific diamond ring or parcel of land).
General Devises.
A devise is general if it can be satisfied with any of the estate’s assets (e.g., a devise of a specific dollar amount is general, because it can be funded with cash or other property of equal value).
Demonstrative Devises.
A devise is demonstrative if the testator makes a general devise AND specifies a specific source that the general devise should come from (e.g., a devise of a specific dollar amount that is payable from a designated bank account).
What is abatement
Beneficiaries under wills are entitled only to the net value of estate assets.
The net value represents what remains of the decedent’s assets at death after the payments of debts, expenses, and taxes.
If there are more claims against an estate from creditors than there are assets to cover all of the devises made under the will, the devises abate.
Who has priority to estate, creditors or benefic’s?
Creditors of the estate ALWAYS have priority to assets of the estate over beneficiaries.
Absent provisions in the will, the testator’s property abates
…on a pro-rata basis in the following order to pay for debts, expenses, and taxes:
Property not disposed of by will (passing by intestacy)
Residuary devises
General devises
Specific devises
Exoneration, CL v. today
At common law, a specific devise of encumbered real property was entitled to have the mortgage on the property paid from the estate as a debt of the decedent.
Today, a beneficiary of real property assumes the mortgage, regardless of a general directive in the will to pay debts.
Most publicly traded corporations issue quarterly dividends to shareholders through cash payments. Shareholders may participate in dividend reinvestment programs that automatically reinvest the quarterly dividends into buying more shares of the corporation’s stock. Consequently, a testator can
accumulate a large amount of additional stock through dividends from the time of execution of the will until death.
Under the common law (still followed in some states), a stock dividend constitutes
a property interest that is separate from shares of stock received through a specific devise.
Under this rule, the beneficiary of the underlying shares of stock does NOT receive the additional shares that were obtained through stock dividends.
Under the majority view of stock dividends,
beneficiaries are entitled to additional shares owned by the testator that were acquired as a result of stock splits or dividends.
A testator may devise property to
a class of individuals (e.g., “I leave $20,000 to be divided equally among all my children.”).
A class may increase or decrease in number until the testator’s death.
If a member of the class predeceases the testator, her share is
split evenly among the remaining members of the class (i.e., it does NOT lapse into the residue).
