Flashcards in Lapse, Ademption, Exoneration of Liens Deck (17):
When a beneficiary named in the will dies before the testator, the gift ______
lapses - the gift fails, falls to the residue and passes as part of residuary estate. UNLESS, it is saved by the state's anti-lapse statute.
UPC anti-lapse statute
UPC statute applies when the predeceasing beneficiary is T's grandparent or a lineal descendant of T's grandparent who leaves issue that survives T.
Class Gift Rule
When there is a gift by will to a group of persons generically described as a class ("children," "nephews," etc) and some class member predeceases the testator and the lapse statute does not apply, the surviving class members take
Gift to two or more people under UPC majority rule
If the residuary estate is devised to two or more persons and the gift to one of them fails for any reason, the surviving residuary devises take the entire residuary estate in proportion to their interests in the residue
Specific Devise or Bequest
Identifies the specific property to be devised: "Blackacre," "my car", "all of my bank accounts"
Hybrid between general legacy with funding instructions" "I give the sum of $5,000, to be paid out of the proceeds of sale of my Acme stock, to my sister, Sarah."
Specified pecuniary amount: "I give the sum of $10,000 to my daughter Donna."
"I give all the rest, residue, and remainder of my property to my wife."
When there is a partial intestacy for some reason (when all the residuary beneficiaries predecease the testator, and the case is not covered by the anti-lapse statute)
The process of reducing testamentary gifts in cases where the estate assets are not sufficient to pay all claims against the estate and satisfy all bequests and devises.
In what order are gifts sacrificed to satisfy claims against the estate?
1) intestate property
2) residuary bequest
3) general legacy
4) demonstrative legacy
5) specific devise or bequest
the failure of a gift because the property is no longer in the testator's estate at the time of her death. Ademption is restricted to specific gifts only
Ademption: when the will is executed before T declared incompetent
If specifically devised property is sold by conservator, or if condemnation award or insurance proceeds relating to the property are paid to the conservator, the specific devisee has a right to a general legacy equal to the net sale price, condemnation award, or insurance proceeds unless testator's disability has been adjudicated to have ceased and testator survives the adjudication by one year.
A specific devisee has the right to the remaining specifically devised property and:
1) any balance of purchase price owing from purchaser when contract is still executory at T's death.
2) any amount of condemnation award for taking of the property, to the extent unpaid at T's death
3) any amount of fire or casualty insurance proceeds unpaid at death.
4) any real or tangible personal property acquired as a replacement for other similar property
5) property acquired as a result of a foreclosure of a security interest on specifically devised note
Increase in stocks: common law
Stock splits: devisee gets all shares
Sotck dividends: devisee gets only original shares
Increase in stocks: UPC
A specific devisee takes any additional or other securities of the same entity owned by the testator because of action initiated by the entity, excluding any acquired by exercise of purchase options