Comprising and Construing the Will: Post-Execution Changes to People & Property

Question 1

Classification of Testamentary Distributions

Answer 1

Include:

• specific
• general
• demonstrative
• residuary

Question 2

Specific

Answer 2

A bequest or devise of something that can be identified and distinguished from all other things of the same kind, and is satisfied only by delivery of the particular thing.

Question 3

General

Answer 3

One that is payable out of the general assets of the decedent’s estate and not separated or distinguished from other things of like kind.

Question 4

Demonstrative

Answer 4

When a bequest or devise is a sum certain to be paid out of a particular fund. If the fund is not in existence at the testator’s death or if it is insufficient the devisee/legatee will be entitled to satisfaction out of the general estate.

Question 5

Distinguishing Specific v. General Devises/Bequests

Answer 5

Watch out for possessive pronouns (e.g. “my”), this will often indicate that something is a specific devise/bequest.

Question 6

Ademption

Answer 6

When a gift under a will fails for whatever reason.

Question 7

Ademption by Extinction

Answer 7

When property specifically bequethed or devised is no longer in the testator’s estate at death. The reason for property’s absence does not matter. Does not apply to general gifts.

Question 8

Do Specific Devisees/Legatees Have Any Rights When Ademption by Extinction is Found?

Answer 8

• If specifically devised/bequested property is sold or mortgaged by one with durable power of attorney for an incapacitated principal, the devisee/legatee has the right to a general devise equal to the sale price, the unpaid loan amount, or the recovery.
• a specific devisee/legatee also has a right to the non-ademption balance

Question 9

Non-Ademption Balance

Answer 9

A specific devisee/legacy has a right to all specifically devised/bequested property that remains in the testator’s estate at the testator’s death, and to:

• any balance of the purchase $, together with any security agreement, owed by a purchaser at the testator’s death by reason of a sale of the specific property;
• any amount due but as yet unpaid at testator’s death for the condemnation of the specific property
• any proceeds unpaid at testator’s death on fire or casualty insurance on or other recovery for injury to the specific property
• (substitute rule) any RP or tangible PP owned by testator at death which was acquired as a replacement for the specifically devised RP or PP.

Question 10

Ademption by Satisfaction

Answer 10

When a testator makes an inter vivos gift of property to a beneficiary of a general or residuary (thus non-specific) disposition with the intent that the provision of the will be thereby satisfied in whole or in part.

Question 11

When Ademption by Satisfaction Will Occur

Answer 11

When:

• the will provides for deduction of the gift; or
• the testator declared in a contemporaneous writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise; or
• the devisee acknowledged in any writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise.

Question 12

Encumbered Property (No-Exoneration Rule)

Answer 12

Property that is subject to a lien will go to the designated beneficiary with that lien intact (the debt is not exonerated).

Question 13

Directions to an Executor to Discharge Encumbrance

Answer 13

If a testator’s will specifies for the executor to pay the debt on the property, the executor will do so and the devisee will take the property free and clear of the mortgage or other lien. However, a direction to pay “all debts and expenses” is considered boilerplate and will not cover mortgages.

Question 14

Abatement

Answer 14

When the assets of the testator’s estate are insufficient after payment of all claims against the estate to satisfy all the bequests or devises to the beneficiaries.

Question 15

Abatement: Distribution of Estate

Answer 15

Specific devisees get first and get their full bequests. Then general devisees will take, and if necessary, their shares will be reduced proportionally under abatement (by the amount of debt).

Question 16

Order of Abatement (Order in Which Property Will be Charged with Debt)

Answer 16

1) Property that would pass intestacy
2) Residuary bequests
3) General bequests
4) Demonstrative bequests
5) Specific bequests

Question 17

Class Gifts: Maximum Membership

Answer 17

As a general rule, class gift closes when any person is entitled to call for a share (rule of convenience)

Question 18

Lapse

Answer 18

Under CL –> a lapse occurs whenever a beneficiary predeceases the testator. The gift to that beneficiary will fail. But many stated have anti-lapse statutes.

Question 19

If There Is No Anti-Lapse Statute

Answer 19

• a lapse in the body of the will – falls into the residuary, but if there is no residuary –> it falls into intestacy
• a total lapse in the residuary of the will falls to intestacy
• a partial lapse in the residuary falls to other residuary takers
• a lapse in a class gift falls to the other class members

Question 20

Anti-Lapse Statute

Answer 20

Will save a bequest/devise if:

• the predeceasing beneficiary was closely enough related to the testator; and
• the predeceasing beneficiary was survived by descendants who also survived the testator; then those descendants will take by anti-lapse unless the will clearly expresses a contrary intent

Question 21

What is a “Closely Enough Relationship”?

Answer 21

Will depend on the jurisdiction’s anti-lapse statute, examples include:

• any relative
• any relative but a spouse
• any relative who is a descendant of testator’s grandparents

Question 22

When a Will Possesses an Expressed Contrary Intent to an Anti-Lapse Statute

Answer 22

• When the will states that the anti-lapse statute shall not apply
• Will specifies survival as a requirement or states that predeceasing triggers lapse, or
• Will implies requirement of survival by naming a contingent beneficiary

Question 23

Anti-Lapse for Class Gifts

Answer 23

The UPC requires that words of survivorship for class gifts must be explicit in stating that anti-lapse statutes should not apply.

Question 24

Special Rules for Stocks & Dividends

Answer 24

• Under CL, a devisee of common stock was entitled to additional shares of that stock obtained by the testator through a stock split, but not to additional shares acquired as a stock dividend.
• Today, virtually all jurisdictions treat stock splits and dividends the same way; in each case, additional shares obtained by the testator go to the specific devisee.