Decedents' Estates February 2007 Flashcards
(5 cards)
Summary
Sister’s disclaimer effectively deletes her bequest from the will. The treatment of the remaining bequests turns on their classification. The specific bequest to Brother entitles him to 100 shares under the common law view and 106 shares under the Uniform Probate Code and like statutes. The general bequest to Uncle is not satisfied by the inter vivos gift. The general bequest to Uncle and the general bequest to Cousin will be abated pro rata. There are insufficient assets to satisfy the residuary bequest to Polytech. If Brother is not entitled to the six additional shares, two of them go to Uncle and four of them to Cousin in payment of their general legacies.
Whether Brother is entitled to 100 or 106 shares of XYZ stock depends on whether state law allocates stock dividends to a specific legatee.
The bequest to Brother of “my 100 shares” is a specific bequest. Many states hold that astock dividend, like a cash dividend, is a property interest distinct from stock given by specific bequest. In these states, Brother is entitled only to 100 shares of XYZ stock. See Note, Rights to Stock Accretions Which Occur Prior to Testator’s Death, 36ALB.L.REV. 182, 188-192 (1971); Annotation, Change in Stock or Corporate Structure, or Split or Substitution of Stock of Corporation, as Affecting Bequest of Stock, 46 A.L.R.3d 7 §§ 8, 9 (1972).
In states that have adopted Uniform Probate Code § 2-605 or a like statute, a stock dividend is treated like a stock split instead of a cash dividend. Under this approach, which aims to maintain the legatee’s percentage of ownership in the corporation, Brother is entitled to all 106 shares.
The effect of Sister’s disclaimer is that the property passes as if Sister had failed to survive Testator.
At common law and under the Uniform Probate Code, Sister’s disclaimer causes Testator’s property to pass as if Sister had failed to survive Testator. See UNIF. PROBATE CODE § 2-1106 (current version, incorporating the 1999 Uniform Disclaimer of Property Interests Act); UNIF. PROBATE CODE § 2-801 (earlier versions). Because Sister has no descendants who survive Testator, the state’s anti-lapse statute will not be applicable to the bequest to Sister. The $3,000 bequest to Sister lapses.
The inter vivos gift of $5,000 does not satisfy the bequest to Uncle.
The bequest of $5,000 to Uncle is a general pecuniary bequest. Under the common law, an inter vivos gift made after a will’s execution can satisfy a general bequest, but only if the testator so intends. Here, there is no evidence of such intention. Moreover, no presumption of such intention exists where, as here, the testator does not stand in loco parentis to the legatee. See THOMAS E. ATKINSON, HANDBOOK OF THE LAW OF WILLS § 133 (2d ed. 1953). Uniform Probate Code § 2-609 produces the same result because none of the statutory bases for satisfaction of a bequest by inter vivos gift have been met: the will does not provide for deduction of the gift, and neither the testator nor the legatee has declared in a contemporaneous writing that the gift is in satisfaction of the bequest.
The bequests abate according to their classifications, hence in the following order: first the residuary gift to Polytech, then the general gifts to Uncle and Cousin, pro rata, and last, the specific gift to Brother.
Under both the common law and the Uniform Probate Code, the shares of distributees abate in the following order: (1) property not disposed of in the will, (2) residuary gifts, (3) general gifts, and (4) specific gifts. Abatement within each category is pro rata. See UNIF. PROBATE CODE § 3-902; WILLIAM M. MCGOVERN JR. & SHELDON F. KURTZ, WILLS, TRUSTS, AND ESTATES § 8.2 (3d ed. 2004). Thus, the residuary gift to Polytech abates first; Polytech receives nothing. The general gifts to Uncle and Cousin abate next and pro rata, meaning that the 1-to-2 ratio of Uncle-to-Cousin is maintained. Thus, Uncle and Cousin receive $3,000 and $6,000, respectively, plus (under the majority view but not under the Uniform Probate Code) two and four shares, respectively, of XYZ Company stock. Finally, Brother receives the XYZ Company stock to which he is entitled: 100 shares under the common law view and 106 shares under the Uniform Probate Code and like statutes.
