slides 6 Flashcards
What Constitutes the Will?(Which Documents and Terms Did The Testator Actually Intend As The Last Will And Testament?)
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Integration Incorporation by Reference Events of Independent Significance Memorandum at Death Pour-Over Wills
Integration
The document being probated must consist of the pages that were present at the execution ceremony that the testator intended to constitute the will
Best practices. What are ways (procedures) to employ to avoid or mitigate the problem?
UPC §2‑510. Incorporation by Reference
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“A [i] writing
[ii] in existence when a will is executed may be incorporated by reference
[iii] if the language of the will manifests this intent and
[iv] describes the writing sufficiently to permit its identification.”
Republication by Codicil
Under the doctrine of republication by codicil, a will is treated as reexecuted (“republished”) as of the date of the codicil. Republication applies only where the prior instrument was executed with the requisite formalities (as needed).
UPC §2‑512. Events of Independent Significance
A will may dispose of property by reference to acts and events that have significance apart from their effect upon the dispositions made by the will, whether they occur before or after the execution of the will or before or after the testator’s death. The execution or revocation of another individual’s will is such an event.
[No doubt such acts or events have an impact on the testamentary plan. But the question is whether the testator has control over those acts or events and, if she does, whether in exercising that control, the motivating force is to change who gets what.]
Memorandum at Death
UPC §2‑513. Separate Writing Identifying Devise of Certain Types of Tangible Personal Property.
“Whether or not the provisions relating to holographic wills apply, a will may refer to a written statement or list to dispose of items of tangible personal property not otherwise specifically disposed of by the will, other than money [unless will says the memo overrides]. To be admissible under this section as evidence of the intended disposition, the writing must be signed by the testator and must describe the items and the devisees with reasonable certainty. The writing may be referred to as one to be in existence at the time of the testator’s death; it may be prepared before or after the execution of the will; it may be altered by the testator after its preparation; and it may be a writing that has no significance apart from its effect on the dispositions made by the will.”
[A blatant exception to the rule that any changes to one’s testamentary plan must be accompanied by formalities.—- UPC 2-513.]
Memorandum at Death
Limitations
The will may refer to a written statement or list to dispose of items of tangible personal property
not otherwise specifically disposed of by the will, other than money
Though will can also say that memo overrides provision in will
The memo must comply with a few mini-formalities must be in writing signed by the testator and describe the items and the devisees with reasonable certainty.
Drafting – the will needs to make reference to the possibility of a memo at death disposing of personal property and it should state whether the will or memo controls if both speak to the same asset.
Drafting – the will needs to provide who gets the tangible personal property if there is no memo, then who gets it if that person is not alive and so forth.
Pour-Over Wills
A provision in a will that transfers (“pours over”) some (or all) of the estate (usually the residue) into a trust
Trust may be a previously funded and operating trust or a standby trust that is only minimally funded (or, in some states and UTC) not previously funded at all
Trust becomes the dispositive document and since changes to a non-testamentary trust do not require the formalities that changes to a will do, it allows changes more easily
Lets entire estate plan be accomplished with one nonprobate document – the trust
UPC §2‑511. Testamentary Additions to Trusts.
(a) A will may validly devise property to the trustee of a trust established or to be established:
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(i) during the testator’s lifetime by the testator, by the testator and some other person, or by some other person, including a funded or unfunded life insurance trust, although the settlor has reserved any or all rights of ownership of the insurance contracts, or
(ii) at the testator’s death by the testator’s devise to the trustee, if the trust is identified in the testator’s will and its terms are set forth in a written instrument, other than a will, executed before, concurrently with, or after the execution of the testator’s will or in another individual’s will if that other individual has predeceased the testator, regardless of the existence, size, or character of the corpus of the trust. The devise is not invalid because the trust is amendable or revocable, or because the trust was amended after the execution of the will or the testator’s death.
Interpreting the Meaning of a Will Using Extrinsic Evidence
C1. Plain meaning rule
Historically, the rule required courts to only interpret the actual written language of the will to divine the testator’s intent. There were very few exceptions to this rule.
C2. Modern Approaches
Today, the plain meaning rule is viewed more as a starting point for the court. If the testator’s intent cannot be divined from the words in the document itself and is ambiguous either in its wording (patent) or its application (latent), the court is then allowed to consider a wide range of extrinsic evidence.
But most courts hold that there must be an ambiguity before extrinsic evidence is permitted to resolve it. In other words, if the will is clear on its face and in its application, then no extrinsic evidence allowed even if the evidence would show the testator would have preferred a different result.
Resolving Ambiguities with Extrinsic Evidence
In some jurisdictions, if there is an ambiguity, whether one can introduce extrinsic evidence to resolve it depends on whether the ambiguity is latent (yes) or patent (no).
Still true in some jurisdictions but most have moved in the direction of the Restatement (3d) §10.2 and the UPC, which allow extrinsic evidence in all situations regardless of the type of ambiguity as their principal concern is fulfilling T’s intent
Courts have also become more liberal with mistakes, but still don’t count on them to rescue you. Draft with precision.
Mistake- Reformation of Wills
UPC §2-805. Reformation to Correct Mistakes.
The court may reform the terms of a governing instrument, even if unambiguous, to conform the terms to the transferor’s intention if it is proved by clear and convincing evidence what the transferor’s intention was and that the terms of the governing instrument were affected by a mistake of fact or law, whether in expression or inducement.
Note that the UPC is very liberal in allowing for correction of mistakes. Nearly all states are not. The clear majority still require an ambiguity in order to admit extrinsic evidence to controvert the plain meaning of language in a will.
Interpreting the Meaning of a Will Using Rules of Construction
When the will is silent on a matter involving the testator’s intent that needs resolution (and only then), the statute is the default
Therefore, if the will gives clarification and direction, it controls. If it does not, then the statute controls.
Rules we will discuss:
Lapse/Antilapse (what if Beneficiary predeceases Decedent?)
Ademption by Extinction (what if devised property no longer owned by Decedent at death?)
Ademption by Satisfaction (was a transfer an advance or a gift?)
Exoneration/Nonexoneration (are debts paid by estate?)
Abatement (whose bequest is reduced to pay debts and claims?)
Apportionment (who pays taxes?)
Survivorship (what is the deemed order of death when Decedent and Beneficiary die near in time?)
Constructional Preferences
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Rules of construction have been developed based on what are referred to as constructional preferences.
Such constructions:
•Prefer family members over non-family members.
•Prefer close family over distant family members.
•Prefer not to disinherit a line of descent.
•Prefer more favorable tax consequences than other plausible constructions.
•Prefer to honor interpretations that are in accord with the transferor’s contractual obligations.
•Prefer to honor interpretations that are in accord with public policy than other plausible constructions.
Classifications of Devises/Bequests
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Specific – A specific devise is a gift of a particular asset, specifically identified in the will. For example, a gift of “my Volvo,” “my grandmother’s diamond ring,” or “all my books” is each a specific devise. Almost always preceded by “my.”
General – bequest payable from the general assets of the estate, e.g, “1,000 shares (but not shares presently owned by Decedent) of Apple stock.” P.R. must use estate funds (normally from the residuary) to buy Apple stock for named beneficiary. [Somewhat rare unless pecuniary.]
Pecuniary - considered a general bequest, a gift of a certain amount of money that must be satisfied from general assets of estate, normally from the residuary.
Demonstrative – A demonstrative devise is a gift of money or value payable from a specified source, but if that source is insufficient, then from other assets. For example, a gift of “$1,000 from my bank account at Trustworthy Bank” will be made first from any amounts on deposit at the specified bank, but if no account exists or the account has less than $1,000, the devise will be made from other assets.
Residuary (or residue) – the estate left after all other devises. This is frequently what the spouse and kids get, either outright or in trust. Be sure to play it out entirely in case all named beneficiaries predecease testator.
Section 2‑604. Failure of Testamentary Provision.
(a) Except as provided in Section 2‑603, a devise, other than a residuary devise [so a specific, general or pecuniary devise], that fails for any reason becomes a part of the residue.
(b) Except as provided in Section 2‑603, if the residue is devised to two or more persons, the share of a residuary devisee that fails for any reason passes to the other residuary devisee, or to other residuary devisees in proportion to the interest of each in the remaining part of the residue.
Lapse and Antilapse: What Happens to a Bequest When the Beneficiary Predeceases the Testator?
Inheritances can only be given to the living.
The traditional common law rule is that if the beneficiary is dead, her gift lapses or terminates or, in the words of 2-604, fails. However, if the gift is a class gift, traditional common law rule is to give the gift proportionately to remaining members of class. The above rule still applies if the antilapse rules do not apply (such as gift is left to a friend) or if the will specifically says that a gift lapses if the beneficiary predeceases the testator.
Antilapse
Reverses the common law of lapse and class gifts but only in certain situations.
Creates a substitute gift but only if Testator did not provide for an alternative gift/taker.
Consistent with which constructional preferences?
Requirements per UPC §2-603:
Beneficiary predeceased Testator
Beneficiary was a “protected devisee” [“chosen few”] – a family member by blood within the first three parentela or a stepchild [different in other states]
Beneficiary left descendants
Testator did not express a contrary intention, such as providing that:
The devise is to lapse if Beneficiary predeceased Testator,
Gift would go to an alternate taker, or
Beneficiary must survive Testator or survive for a specified period (and not to descendants). Words of survivorship to be read narrowly to allow antilapse to apply.
Gives to descendants of Beneficiary (not into estate of Beneficiary)
Ademption by Extinction and Nonademption
One can only give away what one owns
So, if Decedent wrote a will when she owned certain property but did not own it at death, it “adeems” and the Beneficiary does not get anything unless the Decedent left an alternative devise (which would be rare)
The UPC reverses the common law (identity theory) in very limited situations – generally only when there is a mere change in form to something other than cash (per intent theory). Rule applies if:
Change in ownership in one business to another not as the result of Decedent’s actions
Change from property to a chose in action, such as a note or balance due payable, insurance proceeds payable, condemnation award payable
Property acquired as a replacement for the devised property
A cash devise in lieu of the property where doing so would be consistent with a manifested plan of distribution of testator
Rule does not apply if will states contrary intent, i.e., that if any property devised is not owned at death, no other property shall be substituted for it
Ademption by Satisfaction and Nonadeption - Advancements vs. Gifts vs. Loans?
Similar rules as intestacy as to evidence required (though now we have a will that can specify whether it is a gift or advance) and hotchpot
Different re: predeceasing advancee – now descendants step into shoes of advancee
Gift is the default (reversal of common law)
No impact on amount received in inheritance
Loans are usually well-documented and state repayment terms and interest rates. Sometimes collateral also.
Asset of the estate and must be repaid
Advancement is a prepayment against inheritance
Will reduce inheritance but does not have to be repaid if advance was greater than inheritance
Can be proven only by very specific documentary evidence.
Exoneration/Nonexoneration
Common law required executor to pay mortgages on Decedent’s property before distributing to beneficiaries unless will said otherwise
UPC and modern law is contrary – property and secured debt go together unless will says specifically otherwise
A general directive to “pay all [my] [just] [legal] [valid] debts” does not include mortgages and other secured debt. Secured debt is a lien on the property and goes with the property.
FYI - This is also true for a trust with similar language.
Section 2‑607. Nonexoneration
A specific devise passes subject to any mortgage interest existing at the date of death, without right of exoneration, regardless of a general directive in the will to pay debts.
Simultaneous Death
Inheritances are meant to benefit the intended beneficiary. But if he/she does not survive for a long enough period, this provision precludes beneficiary from receiving property and passing it along to his/her beneficiaries. Instead, decedent’s property goes to his/her own loved ones.
Requirement of survival by will, but if none or silent,120 hours
Simultaneous death per statute or per will
Section 1‑107. Evidence of Death or Status.
- Death occurs when an individual [is determined to be dead under the Uniform Determination of Death Act] [has sustained either(i) irreversible cessation of circulatory and respiratory functions or
(ii) irreversible cessation of all functions of the entire brain, including the brain stem. A determination of death must be made in accordance with accepted medical standards]. - A certified or authenticated copy of a death certificate purporting to be issued by an official or agency of the place where the death purportedly occurred is prima facie evidence of the fact, place, date, and time of death and the identity of the decedent….
- An individual whose death is not established under the preceding paragraphs who is absent for a continuous period of 5 years, during which he [or she] has not been heard from, and whose absence is not satisfactorily explained after diligent search or inquiry, is presumed to be dead. His [or her] death is presumed to have occurred at the end of the period unless there is sufficient evidence for determining that death occurred earlier.
