Presentation Transcript

1. Construction of wills If a primary goal of trusts and estates law is to carry out donor intent, we need principles for situations in which donor intent is not obvious Mistaken or ambiguous language (previous class) Death of beneficiary before death of testator Changes in property after execution of a will
2. Construction of a will:The stale will Events may occur after the execution of a will that make a will “stale.” A beneficiary might die between the execution of the will and the death of the testator. What happens to the beneficiary’s bequest? After execution of the will, the testator might dispose of a piece of property that was part of a bequest. What does the intended beneficiary of that piece of property receive? (a topic for next class)
3. Avoiding default rules Just as wills are drafted to avoid the default rules of intestacy, specific provisions of wills are designed to avoid other default rules The matter of stale wills involves a number of default rules that well-drafted wills will anticipate Common law default rules Statutory default rules that supersede the common law rules
4. Death of beneficiary before death of testator Recall that when someone dies intestate, the share of a predeceased heir apparent either Falls to the heir apparent’s descendants or If the heir apparent left no descendants, then the share is divided by the remaining heirs Today, we consider what happens when a beneficiary of a will devise predeceases the testator
5. Common law rules* Prior death of beneficiary=>lapse of gift Beneficiary’s specific (my car) or general ($10,000) gift falls to the residue Lapsed residue or share of the residue passes by intestacy (no-residue-of-a-residue rule) Lapsed share of a class gift ($10,000 to the children of A) is divided among surviving members of the class Voided gifts are treated as lapsed gifts E.g., beneficiary dies before will is executed *Antilapse statutes override common law
6. Estate of Russell (1) Illustrating the default rules: Russell, p.359 What were the facts in Russell?
7. Estate of Russell (2) Estate of Russell Russell Petition for Probate Slide Chester H. Quinn Thelma Russell Georgia Hembree VOID ?? Roxy
8. Estate of Russell The court identified two potential ambiguities. What were they, and how did the court resolve them?
9. Is there any way to get the lapsed gift to Chester? Prior death of beneficiary=>lapse of gift Beneficiary’s specific (my car) or general ($10,000) gift falls to the residue Lapsed residue or share of the residue passes by intestacy (no-residue-of-a-residue rule) Lapsed share of a class gift ($10,000 to the children of A) is divided among surviving members of the class Voided gifts are treated as lapsed gifts E.g., beneficiary dies before will is executed
10. Lapsed shares of the residue in Indiana “Consequently, when a will does not specifically provide for an alternate recipient in case of failure of a residuary devise, the testator's intent as expressed in the will (e.g., case 7, p. 365) determines whether the failed devise is inherited under the rules of intestacy or goes to an alternate residuary devisee. In the absence of an expression of the testator's intent, the failed residuary devise passes as intestate property.” 642 N.E.2d 548, 552 (Ind. Ct. App. 1994) (emphasis added) Most states have eliminated the no-residue-of-a-residue rule—lapsed share either falls to the residue or to the intended beneficiary’s heirs (under an anti-lapse statute)
11. Antilapse: Case 4 (p. 364) T T devises entire estate: one-half to B, one-half to A. B dies before T, leaving a child, C. Tdies. What happens to B’s share? Common Law: B’s share lapses and passes by intestacy. A and Cshare B’s lapsed share, so A gets ¾ of the estate, C gets ¼ of the estate. B A State has eliminated the “no-residue-of the-residue” rule: B’s share, as a residuary devise to A and B, goes to A, so A gets the entire estate. ¾ Estate C Entire Estate State has adopted an applicable antilapse statute: C takes B’s share, so A gets ½ of the estate, Cgets ½ of the estate. ½ Estate ¼ Estate ½ Estate
12. Antilapse: Case 5, p. 364 T devises home to niece, A, and residue to B. A dies before T, leaving a child, C. Tdies. What happens to A’s share? T Sibling UPC: As a descendant of T’s grandparents, Afalls within the required relationship of the antilapse rule. Therefore, C takes the home. Home Residue A B Some antilapse statutes: If the statute only applies to T’s descendants, then the antilapse statute is not applicable, the devise lapses, and the house falls into the residue, to go to B. C Home to B Home to C
13. Indiana’s anti-lapse statute If a devise of real or personal property, not included in the residuary clause of the will, is void, is revoked, or lapses, it shall become a part of the residue, and shall pass to the residuary devisee (note the implied no-residue-of-a-residue rule). Whenever any estate . . . shall be devised to any descendant of the testator, and such devisee shall die during the lifetime of the testator . . . leaving a descendant who shall survive such testator, such devise shall not lapse, but the property so devised shall vest in the surviving descendant of the devisee as if such devisee had survived the testator and died intestate. Ind. Code 29-1-6-1(g)
14. Antilapse: Case 6, p.365(Case 4 with a twist) T devises entire estate: one-half to B, one-half to A, “but if A or B or both do not survive me, then I give such predeceasing child’s share to my friend F.” B dies before T, leaving a child, C. T dies. What happens to B’s share? T F ½ Estate B A Antilapse statute states a default rule: Because T has provided expressly for the possibility of B predeceasing T, the antilapse statute does not apply. F receives one-half of the estate. ½ Estate C
15. Antilapse: Case 7, p. 365 T A B C D E ½ Estate ½ Estate T devises entire estate: “to my living brothers and sisters, A, B, C, D, and E, to share and share alike.” A, B, andC die before T, leaving descendants. Tdies. What happens to A, B, and C ’s shares? Issue: Do the terms “living” and “share and share alike” express a condition of survival, precluding application of the antilapse statute? Allen v. Talley (1997):Terms indicate requirement of survival, antilapse statute does not apply, Dand E take the entire estate.
16. Antilapse: Case 8, p. 365 T A B C D E 1/5 Estate 1/5 Estate T devises entire estate: “to my brothers and sisters, A, B, C, D, and E, to share and share alike.” A, B, andC die before T, leaving descendants. Tdies. What happens to A, B, and C ’s shares? Issue: Does the term “share and share alike”, by itself, express a condition of survival, precluding application of an antilapse statute? 1/5 Estate 1/5 Estate 1/5 Estate Estate of Kuruzovich (2002):“Share and share alike” does not express contrary intention, antilapse statute applies. D and E, and descendants of A, B, and C each take 1/5 of the estate.
17. Antilapse: Case 9, p. 366 Wilma T devises Blackacre “to my son Sidney if he survives me,” residue to his wife Wilma. Sidney dies before T, leaving a child, C. Tdies. Who takes Blackacre? T Issue: Do the words “if he survives me” evidence an intention that Sidney’s descendants should not be substituted for Sidney? Blackacre Sidney Majority Rule: An express requirement of survivorship, such as “if he survives me,” evidences an intention that Sidney’s descendants should not be substituted for Sidney. Wilma takes Blackacre. Debby UPC §2-603(b)(3): The term “if he survives me” is not a sufficient expression of contrary intent. Antilapse statute applies. Debby takes Blackacre. Blackacre
18. What were the facts in Ruotolo v. Tietjen, p. 367
19. Ruotolo v. Tietjen Ruotolo v. Tietjenp. 367 Wife First Husband John Hazel Kathleen
20. What did the court conclude in Ruotolo? Why?
21. Lessons fromRuotolo v. Tietjen If you don’t provide a well-drafted will, your clients’ wishes may be thwarted by a bad court decision And this was a bad decision—The testator conditioned the gift to his step-daughter on her having survived him, and the other half of the residue was to be divided among four persons, including the step-daughter’s child Rather than ignoring the conditional words (“if she survives me”), the court should have ignored CT’s no-residue-of-a-residue rule to avoid the gift passing through intestacy (note 3, p. 373)
22. Drafting for lack of survival “to A if A survives me, but if A does not survive me, to B if B survives me, and if both A and B do not survive me, to be added to the residue of my estate.” Page 373, note 4
23. Class gifts (Restatement) Testator leaves a gift and uses a class label (e.g., to my nieces and nephews)—it’s a class gift Unless the language or the circumstances indicate that the beneficiaries are to take as individuals. Testator leaves a gift and names beneficiaries individually without reference to a class label—it’s not a class gift. Testator leaves a gift and names beneficiaries individually, but also uses a class label—it’s presumed not to be a class gift. The presumption can be overcome if the language or circumstances indicate that a class gift is intended.
24. What were the facts inDawson v. Yucus?, p. 376
25. Dawson v. Yucus Dawson v. Yucus p. 376 Nelle Stewart Frank’s Brothers and Sisters Frank Stewart Other Cousins Stewart Wilson Gene Burtle “One-half (1/2) of my interest…to Stewart Wilson…and One-half (1/2) of my interest to Gene Burtle….”
26. Did Nelle create a class gift?
27. Antilapse and Class Gifts: Case 10, p. 379 T A B C Residue Blackacre S T’s Husband and Sister C die. T executes a will – Blackacre “to my sisters”; residue to Stepson, S. Sister A dies. T dies.
28. Changes in property after execution of will:Ademption by extinction What happens if I leave my house in Indianapolis to one of my children in my will, but I sell the house before I die and move to a new home in Florida? Under the traditional rule, my child would be out of luck because the bequest was a specific one—this is the “identity” theory of ademption by extinction. Under the modern “intent” theory of ademption, my child might still take if the child could show that I intended my home in Florida to replace the one in Indianapolis in the will. Or my child might take the cash value of the Indianapolis home if the child could show that such was my intent.
29. What were the facts in Anton?
30. In re Estate of Anton In re Estate of Anton,p. 381 Mary First Wife First Husband Herbert Residue Duplex Gretchen Nancy Robert Aug. 2003 Dec. 2003 1976 1981 1998-2003 1986
31. What should happen to the $104,317? What are the options? What happens under the identity theory of ademption? What about the fact that Mary’s attorney-in-fact was responsible for the sale?
32. Anton and ademption, p.385 What rule for ademption by extinction did the court come up with? What about the fact that Mary knew her duplex might be sold to cover her expenses? Wouldn’t she have approved of the sale had she been competent?
33. Anton and abatement, pp.391-392 What result? Is that what Mary likely would have wanted? Who is left out?
34. Problems, pp. 388-389