Wills (Part 2) Flashcards
CA: Reformation of an Otherwise Unambiguous Will (missing language and blank spaces in wills)
In CA, courts can reform or fill in the blanks of an otherwise unambiguous will if we can establish:
(1) There was an error in the expression of the will.
(2) Clear and convincing evidence of T’s intent
Lapse
A gift to a beneficiary who predeceases you is lapsed (failed).
That failed gift goes into the residuary (specific or general). if there is no residuary clause, then it goes into intestacy.
What happens when a failed residuary gift fails in whole?
When there is only one beneficiary for the residuary gift, and that beneficiary dies, then the failed gift goes into intestacy.
When there are multiple beneficiaries for the residuary gift, and one of them dies, then the failed gift goes to the remaining beneficiaries.
Anti-Lapse
A failed (lapsed) gift can be saved by anti-lapse.
We presume that T wanted the gift to be saved for the surviving issue of the predeceased beneficiary. Rebuttable presumption.
What are the 4 requirements for anti-lapse to apply?
- Must have a lapse
- Beneficiary must meet the appropriate degree of relationship to the testator
(i) CA: have to be related to either the T or the T’s current, former, or predeceased spouse - Beneficiary has surviving issue who survive the T
- There is no expression of contrary intent in the will
When does anti-lapse not apply?
Does not apply to the current spouse of the transferor.
If a gift fails, what are the 2 ways to save it?
- Anti-Lapse
- Class Gifts
What is a class gift?
When the gift is to a class of people who are identifiable as a class.
The class is open until T dies.
What happens when one member of the class dies before the testator?
The surviving members of the class divide the gift.
What are the factors for a class gift?
- Describe the beneficiaries
- Describe the gift
- Common characteristic
- Overall testamentary scheme
Can anti-lapse apply within a class gift?
Yes, if they. meet the appropriate degree of relationship.
What is a void gift?
If a beneficiary of a gift is already dead at the time the will is executed, then the gift is void and cannot be saved.
Can we save a void gift within a class?
No.
What is the Doctrine of Ademption?
A failure of a specific gift because the property is not in the T’s estate at the time of death.
What happens when the property is not in T’s estate at the time of death? (2 Views)
- Identity Theory
(i) If gift is not there, the beneficiary gets nothing - Intent View
(ii) There is potential for the beneficiary to get some value in place of the missing item
What happens when there is a change in form but not substance of the gift under the will?
The courts will give the changed item.
Not subject to ademption.
Ex: Change bank account to another bank is a change in form, not substance.
What is the CA rule for Stock Splits?
If T owned securities at the time the will was executed, then the beneficiary will get any additional stocks resulting from T’s ownership of securities AND additional shares if it resulted from corporate action.
Treat a a specific bequest if owned at the time the will was executed.
Treat as a general bequest if not owned by T at the time the will was executed. (meaning the executor goes out and gets those shares)
What about stocks of privately held corporations?
Will be presumed to be a specific bequest because, because the executor cannot just go out and get those shares. Thus, the gift would be considered adeemed.
What is the Doctrine of Satisfaction?
When T makes an inter vivos gift to a beneficiary under the will, should the inter vivos transfer count against the beneficiary’s testamentary share of the estate.
How to apply the doctrine of Satisfaction in CA
We presume that it is not a satisfaction UNLESS one of these exceptions apply:
(1) The will expresses that it was a satisfaction
(2) The transferor declares, in a contemporaneous writing, that the gift is a satisfaction.
(3) The transferee acknowledges in writing that the gift is a satisfaction.
(4) The property given is the same property that is subject of specific bequest to that person.
What is the distinction between satisfaction and advancement?
The partial or complete satisfaction of that gift during lifetime counts against anyone (kids, etc.)
What happens when you’re gifted stock and it appreciates in value?
We value the stock at the time of the transfer.
Exoneration of Liens
Refers to debts or encumbrances of the property that’s given away under the terms of the will.
In CA: A specific gift passes the property subject to any mortgage, deed of trust, or other lien, without the right of exoneration. However, T can put in a provision in the will for the executor to pay off this express debt.
Abatement
When the will purports to give away more than the T has.
