Construction of Wills (Death of Beneficiary before Death of Testator - Lapse, Anti-Lapse, Void Gifts, Ademption)
Void Devise
if a devisee is already dead at the time the will is executed or the devisee is a dog or cat or some other inteligible taker, the devise it void. (Lapse rules apply)
Traditional Identity Theory of Ademption
if a specifically devised item is not in the testator's estate, the gift is extinguished
Characteristics of UPC 2-606
if the gift is transferred but there is an outstanding balance due to the testator, including the balance of any purchase price of the sale of the property, fire or casualty insurance proceeds, or property acquired by foreclosure or obtained in lieu of foreclosure, or property that was acquired as a replacement for specifically devised real property or tangible personal property because of a transfer, then the balance should go to the beneficiary of the adeemed gift UPC 2-606(a)(6) places the burden on the party opposing ademption - that is the party seeking the pecuniary value of specifically devised property not in the estate.
UPC 2-603(b)(3)
provides that "words of survivorship, such as in a devise to an individual 'if he survives me,' or in a devise to 'my surviving children,' are not, in the absence of additional evidence, a sufficient indication of an intent contrary to the application of this section" EX: T devises BA to son, S, if he survives me and devises the residue of his estate to wife, W. S dies in his father's lifetime, leaving daughter D. T is survived by W and D. who takes BA? MAJ: an express requirement of survivorship, such as if he survives me, precludes as the anti-lapse statute. UPC: if he survives me is not enough to impose a condition of survivorship, and the AS spplies nonetheless, substituting D for her father S.
UPC 2-606(1990-1997) Non-ademption of Specific Devises; Unpaid Proceeds of Sale, Condemnation, or Insurance; Sale by Conservator or Agent
(a) specific devisee has a right to specifically devised property in the testator's estate at the testator's death and to: (1) any balance of the purchase price, together with any security agreement, owed by a purchaser at the testator's death by reason of sale of the property (2) any amount of a condemnation award for the taking of the property unpaid at death (3) any proceeds unpaid at death on fire or casualty insurance or on other recovery for injury to the property (4) any property owned by the testator at death and acquired as a result of foreclosure, or obtained in lieu of foreclosure, of the security interest for a specifically devised obligation (5) any real property or tangible personal property owned by the testator acquired as a replacement for specifically devised real or tangible perosnal property (6) and if not covered in above; a pecuniary devise equal to the value of its date of disposition of other specifically devised proeprty disposed of during testator's lifetime but only to the extent it is establisehd that adeptmtion would be inconsistent with the testator's manifested plan of distribution or that at the time the will was made, the date of disposition or otherwise, the testator did not intent ademption of the devise. (b) if specifically devised property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal, the specific devisee has the right to a general pecuniary devise equal to the net sale price, the amount of the unpaid loan, the condemnation award ,the insurance proceeds, or the recovery. (c) the right of a specific devisee under those section is reduced by any right the devisee has under (a)
General Devises
A devise is general if the testator intends to confer a general benefit and not give a particular asset - a devise of $100k to A. if there is not 100k in cash in the testator's estate at death, the legacy is not adeemed. Other property must be sold to satisfy A's general legacy.
Demonstrative Devise
A general devise, yet payable from a specific source. T's will gives B "the sum of 100k to be paid from the proceeds of sale of my apple stock. MOST COURTS: would hold this to be a demonstrative devise. If T owns sufficient apple stock at death, in raising the 100k, the executor must comply with the direction to sell the stock - if T does not own 100k worth in apple stock, the devise ins not adeemed - other property must be sold in order to raise the full 100k
Gift Over Clause
A gift over clause specifies who would get the gift if the beneficiary predeceased the testator.
Residuary Devise
A residuary devise conveys that portion of the T's estate not otherwise effectively devised by other parts of the will, such as a devise to A of "all the rest, residue, and remainder of my property and estate"
Specific Gift or General Devise
A specific gift goes to the residue of the estate. If there is no will, then it is distributed under intestacy.
Ademption by Extinction - Specific Gift
A will that includes a specific devise of an item of property but the testator sells or gives it away before death, it is subject to the doctrine of ademption by extinction. If a specific gift was not part of the probate estate because it was given to someone else or because it was destroyed, then it is known as ademption by extinction T's will devises BA to her son, J, and the residuary estate to her daughter, M. Some years later, the testator sells BA and uses the sale proceeds to purchase WA, then dies without having changed her will. under traditional law: the gift of BA is adeemed - to take away. because T does not own BA at her death, the devise fails. J has no claim to WA as the will does not devise WA to him. APPLIES ONLY TO SPECIFIC DEVISES. DOES NOT APPLY TO GENERAL, DEMONSTRATIVE, OR RESIDUARY DEVISES
Class Gifts and Application of Antilapse Statutes
Almost all states apply their anti-lapse statutes to single-generation class gifts to "children" or "siblings". Most statutes so provide, as does UPC 2-605 (1969). In states where the statute is unclear, courts reason that the antilapse statutes are designed to carry out the typical testator's intent and that the typical testator would prefer for a deceased class member's share to go to the beneficiary's descendants rather than to the surviving members of the class T dies leaving a will devising BA to "my sisters" and devising residuary estate to her stepson S. When T executed the will, T had two sisters A and B. C died before the will was executed., leaving child F. A died during T's lifetime leaving D and E. T is survived by B, D, E, F, and S. who takes BA? antilapse statute applies to devises to sisters: Most states - B takes 1/3 - D and E split 1/3 F takes 1/3 Minority - F does not share because C was dead when the will was executed and BA goes 1/2 to B and 1/2 split between D and E. If the antilapse statute did not apply, B, as the sole surviving member of the class would take BA.
Scope
An anti-lapse statute applies to a lapsed devise ONLY if the devisee bears the particular relationship to the testator specified in the statute. UPC extends to a devise to a grandparent or a lineal descendant of a grandparent. (1990 adds step children) T devises her home to her niece, B, and the residue of her estate to A. B predeceases T, leaving child C who survives T. under UPC, C takes T's home because B is a descendant of T's grandparent. If the statute applies only to T's descendants, C does not take T's home - fails and falls into the residue to A.
Default Rules
Because the antilapse statutes are designed to implement presumed intent, they are default rules that yield to an expression of the testator's actual intent that is contrary to the statue. T devises entire estate - 1/2 to and 1/2 to B but if or B or both do not survive me, then share goes to F B predeceased T leaving child C. at T's death, estate will pass 1/2 to A and 1//2 to F. the anti lapse statute does not apply to B's share because T has provided expressly for the possibility of B predeceasing T. If a will is not clear, courts determine whether it imposes a condition of survival that precludes application of the statute.
UPC 2-609 compared to advancements 2-109: writing requirement for satisfaction
Because the intent of the testator is difficult to ascertain, some states have enacted statutes requiring that the intention of a testator to adeem by satisfaction be shown in writing.
Common law rule default
Common law is the default rule - See specific gift, residuary devise and class gift.
Anti-Lapse Statute v. Common Law Default Rule
Common law: a gift made by will is subject to a condition that the devisee survive the testator, unless the testator specifies otherwise. Anti-Lapse Statute: under certain circumstances, substitute another beneficiary for the predeceased devisee. NOTE: Common law is the default rule, it will apply if the will does not provide otherwise and an ant-lapse statute is inapplicable - thus, the beneficiary is required to survive the donor under the UPC 120 hour rule.
Exoneration of Liens Doctrine
Common law: if a will makes a specific disposition of real or personal property that is subject to a mortgage to secure a note on which the testator is personally liable, it is presumed that the testator wanted the debt, like all other debts, to be paid out of the residuary estate. UPC 2-607 (1990): Reversed the common law.
Death of a Beneficiary before Death of a Testator
Even if a will is unambiguous and its terms are unaffected by mistake, the gap in time between its execution and the testator's death may cause difficulties. The will can turn stale and obsolete: (1) if a named beneficiary predeceases the testator (2) changes in the testator's property
Presumed Intent
For certain predeceasing devisees, the testator would prefer a substitute gift to the devisee's descendant's rather than for the gift to pass in accordance with the common law of lapse. T - entire estate - 1/2 to A and 1/2 to B. B predeceased T, leaving a child C. At T's death, under common law, it would lapse and being a residuary devise, would pass by intestacy - 1/2 to A and 1/2 to C. so A would take 3/4 and C would take 1/4. If no residue of a residue rule does not apply, B 's share would go to A, leaving A with the entire estate and C with nothing. If an anti-lapse statute applies, B's share would pass to C, leaving A with 1/2 and C with 1/2 - T would prefer a substitute gift to C rather than intestacy or all to A.
Class Gift
If a devise is to a class of persons, and one member of the class predeceases the testator, the surviving members of the class divide the gift.
UPC 2-605 Anti-Lapse; Deceased Devisee; Class Gift
If a devisee who is a grandparent or a lineal descendant of a grandparent of the testator, or is treated as if he predeceased the testator, the issue of the deceased devisee who survive the testator by 120 hours take in place of the deceased devisee and if they are all of the same degree of kinship to the devisee they take equally, but if of unequal degree, then those of more remote degree take by representation. One who would have been a devisee under a class gift if he had survived the testator is treated as a devisee for purposes of this section whether his death occurred before or after the execution of the will.
Ademption (1) Ademption by extinction (2) Ademption by satisfaction (3) Abatement
If a gift is bequeathed in a will that is not part of the probate estate or if the value of the gift has changed since it was written in the will, then the doctrine of ademption applies, which determines how the absence of the gift or its reduction in value will be treated
Lapse and Void Devices
If the devisee does not survive the testator, the devise fails and is said to have lapsed. There is a presumption the testator gave the gift to the beneficiary for her own use and not for her descendants. If the beneficiary dies before the will is executed, then the gift is void. But if the beneficiary was alive when the will was executed but died before the testator, then the gift lapses.
Ademption by Satisfaction
If the gift was given to the beneficiary while the testator was still alive, then it is referred to as ademption by satisfaction
Abatement
If the probate estate has a reduced value from what is bequethed in the will, then the process of abatement will determine how the reduced value will be apportioned among the beneficiaries.
Residuary Devise "NO RESIDUE OF A RESIDUE"
If the residuary devise lapses, the heirs of the testator take by intestacy. If only a share of the residue lapses, still goes to the heirs rather than the other taker in the residue clause that remains.
New Intent Theory
If the specifically devised item is not in the testator's estate, the beneficiary may nonetheless be entitled to the replacement or cash value of the original item, if the beneficiary can show that this is what the testator would have wanted.
Changes in Property after execution of Will
If the testator's actual intent is not evident , the court will apply rules of construction that are meant to implement the probable intent of the typical testator.
Exceptions to Ademption by Extinction (Identity Theory) In re estate of Anton
The identity theory rule will not be applied to cases where specifically devised property is removed from the estate through an act that is involuntary as to the testator. A specific devise fails if property is not in estate unless failure of devise would be inconsistent with testator's intent. If the testator was incompetent at the time of the sale of the property, the act would be involuntary to them and not adeemed by extinction. An expression of intent in the indefinite future to sell assets for support is not sufficient to cause ademption under the modified intention theory where the testator is not awware that the specific action has taken place. whether the testator had the opportunity to change the will once they knew that the property was no longer a part of the estate. Some courts hold that where ademption does not occur, the devisee is entitled to the entire value notwithstanding the fact the proceeds may been used for the care of the testator. Others hold that in cases where specific devises are removed from the estate as a result of an involuntary act, the devisee is entitled only to the proceeds which have not been expended on the support of the testator.
Satisfaction of General Pecuniary Bequests
The doctrine of satisfaction may be applicable if a testator makes an inter vivos transfer to a devisee after executing the will. If the testator is a parent of the beneficiary and sometime after executing the will transfers to the beneficiary property of a similar nature to that devised by the will, there is a rebuttable presumption that the gift is sin satisfaction of the devise made by the will. The doctrine is akin to that of advancements under intestacy law. HYPO: T devises 50 k to son, S and residuary to daughter D. After executing the will, T gives S 30k. there is presumption that the gift was in partial satisfaction of the legacy, so that S will take only 20k at T's death. Doctrine of satisfaction applies to generally pecuniary bequests but not to specific bequests. When specific property is devised to a beneficiary, but then is given to that beneficiary during the testator's life, the gift is adeemed by extinction, not by satisfaction
Abatement Procedure
The problem of abatement arises if an estate lacks sufficient assets to pay the decedent's debts as well as all devises. Some devises must be abated or reduced. By dividing up a limited pie among claimants of different priorities, abatement functions like bankruptcy. In the absence of indication in the will of how devises should abate, devises ordinarily abate in the following order: (1) residuary devises are reduced first (2) general devises (3) specific and demonstrative devises are reduced pro rata. This plan is believed to follow the testator's intent that specific devises be given effect before general devises, and both be given effect before a residuary devise. HYPO: T devises 300k to charity B, 100k to charity C and the residue of her estate to son, A. At the time of the will's execution, T has 800k in assets. T becomes ill and undergoes an experimental treatment costing 500k. the treatment fails, and T dies with an estate of 300k under traditional abatement rules, A takes nothing, B takes 225k and C takes 75k. UPC 3-902: if the testamentary plan would be defeated by the usual order of abatement, the shares of the distributes abate as may be necessary to give effect to the intention of the testator.
ANTILAPSE STATUTE
They do not prevent a lapse, they substitute other beneficiaries, usually the dead beneficiary's descendants, if certain requirements are met. They provide that if a predeceased devisee is related to the testator in a prescribed way and is survived by one or more descendants who also survive the testator, those descendants are substituted for the predeceased devisee. If the beneficiary is closely related to the testator, there is a presumption that the testator would have wanted the property distributed to the beneficiary's descendants - requires that gifts to a deceased beneficiary's heirs. MUST BE IN A CERTAIN DEGREE OF RELATIONSHIP WITH THE TESTATOR AND THE BENEFICIARY HAS DESCENDANTS THAT SURVIVED AND THERE IS NO GIFT-OVER CLAUSE. Common law only applied to anti-lapse statutes only to lapsed gifts, not void. UPC applies to both.
Words of survivorship
UPC 2-603 - the majority for words of survivor ship is that attaching words of such indicates that the testator thought about the matter and intentionally did not provide a substitute gift to the devisee's descendants. UPC and Restatement reject this - the anti-lapse statute applies
Escape Hatches to Avoid Ademption where the property is not found in the estate because of the action of someone other than the testator or in which the facts indicate the testator did not intend for ademption
UPC 2-608(a) (1969-1987) give the devisee any unpaid amount of a condemnation award for property or any unpaid casualty insurance proceeds after the property has been destroyed. Courts will classify a devise as general or demonstrative rather than specific. Courts will classify the inter vivos disposition as a mere change in form, not substance.
UPC 2-604 May Reject No Residue of a Residue Rule
Where there is clear and convincing evidence to show that the testator would prefer for a person to receive the entire residuary, then the other residue shall pass to that person.