Wills Ii

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Simultaneous death

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oRevised Uniform Simultaneous death act (RUSDA): absent a will provision to the contrary, if a person dies under circumstances where there is insufficient clear and convincing evidence to prove that such person is to have survived the other 120 hours (days), the property of that person is distributed as though he or she predeceased the other person.
Plain meaning: 2 people die within 120 days of each other (even simultaneously), if there is no proof 1 survived the other for more than 120 hours, presume each outlived the other when figuring out how to distribute their property.
•Look at the estate you are distributing.
RUSDA and jointly-held property: jointly held property passes as tough each co-owner survived the other. (theoretically severs the right of survivorship in cases of jointly held property). Thus, property passes as a tenancy in common, not as survivorship property.
•Same distribution results for tenants by the entirely and joint bank accounts, life insurance, totten trusts etc.
Key to RUSDA- identify whose estate you are distributing, act as though they survived.

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Changes to testators family after will is executed--

testator marries

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Marriage after the execution of a will has no effect on the validity of the will, but it may affect gifts and the dispositions under the will.
•Right of election under NY law

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Changes to testators family after will is executed--

testator un-marries

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If the court renders a final decree of divorce, annulment or separation after the execution of a will, all gifts and fiduciary appoints in favor of the former spouse are revoked by operation of law. Read the will as if the spouse predeceased testator.
•EXCLUSIONS- (a) all gifts and fiduciaries in favor of the issue of the former spouse are not revoked as an operation of law, (b) an appointment of the former spouse as guardian of the couple’s children is not affect, (c) if the couple reconcile and remarry, all provisions in favor of the former spouse are restored.

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changes to testators family after will is executed

testators child is born or adotped after the will is executed.

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EPTL does not protect children who are alive when the will is executed.
Pretermitted children- children born or adopted after the will is executed- EPTL only protects pretermitted child who are (a) not previously provided for by any other settlement, and (b) neither provided for nor mentioned in the will.
•If testator had one or more children when will was executed and no provision is made for any children, the pretermitted child is given nothing.
•The will made gifts to other children, the pretermitted child shares in amount to other kids as though class gift was made.
•It appears that the testator intention was to only make a limited provision to the children living at the time the will was executed, the pretermitted child takes their intestate child.
•If testator has no children when the will is executed, pretermitted as intended by statute.
oThey are pretermitted: (a) is the child born or adopted after the will is executed- if yes- (b) is the child not provided for in any settlement- if yes, (c) is the child neither provided for no mentioned in the will, if yes- child is pretermitted.

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Negative bequests

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oCL: when a will does not make a complete distribution of the estate (resulting in partial intestacy), words of disinheritance in the will are ineffective with respect to property passing by intestacy.
oNY Negative bequest rule: words of disinheritance are given full effect in partial intestacy. Treat that person as they predeceased.

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variations to testate distribution

Lifetime gift to beneficiary-satisfaction of legacies

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CL: A lifetime gift (made after the wills execution) to a beneficiary named in the testators will was presumptive made in partial or total satisfaction of the legacy, to be taken into account when distributing the testators estate at death.
NY: There is no satisfaction of legacy unless provided by (a) contemporaneous writing made at the time of gift, and (b) signed by donor/donee.

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Reference to facts and events outside the will--

incorporation by reference

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extrinsic document (a document that is not part of the will itself).
In almost all states- it can be incorporated by reference, if it existed when drafting, intent to incorporate, and document clearly identified in will.
 NY: does not recognized incorporation by reference, everything must be formally executed.

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Reference to facts and events oustide the will--

Acts of indepedent significance

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Acts performed by the testator after the will is executed which has a purpose or motive independent of any testamentary purpose are given full effect when distributions are made. Except- title documents can only be transferred as mandated by law.

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changes in distribution of tesatementary gifts.

classification of gifts.

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Specific gift - I devise blueacre (my computer) to my son, Seth”
Demonstrative legacy - A general amount, but the testator designates a specific source from which the amount is to be paid from.
General legacy- a general amount
Residuary disposition- I give all the rest, residue, and remainder of my estate to my son, Seth.
Intestate property- where partial intestacy results and the will has no residuary clause.

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changes in distribution of testamentary gifts

abatement

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Reduction of legacies. If there are more claims against the estate than there are assets to cover all gifts made under the will, will abates. Abatement- not giving effect to gifts so that creditors claims can be satisfied.
Order of abatement- absent a provision in the will, the order in which a testators property abates is- (a) intestate and residuary property, (b) general gifts*, (c) demonstrative legacy*, (d) specific gifts, (e) items that qualify for estate and marital tax deduction.
•*abate pro rata.

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changes in distribution of testamentary gifts.

ademption

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If a testator makes a specific gift of property, and the property cannot be found or is no longer owned by the testator at the time of her death, the gift fails under the doctrine of Ademption.
•If a person getting a specific gift does not exist, person getting it loses. (must specific gift).
•A demonstrative legacy will turn into a general legacy if there is no cash available from source designated.
Three statutory exclusions:
•(1) insurance proceeds for lost, damaged, or destroyed property, the beneficiary takes proceeds to the extent they were paid after death.
•(2) proceeds received under an executory k: beneficiary gets proceeds that are paid after death.
•(3) proceeds from a guardian or conservators sale of specifically bequeathed property: beneficiary is entitled to receive money/property into which proceeds from sale/transfer can be traced. If you cant trace, its adeemed.

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changes in distribution of testamentary gifts.

specific gifts of emcumbered property.

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No exoneration of lines. If a testator makes a specific gift of property that is subject to a mortgage or other lien on which the testator is personally liable, the beneficiary is entitled to have the lien exonerated.
•Exoneration- the discharge of any encumbrances on specifically bequeathed property using the residuary estate.
NY’s rule- liens on specifically devised property are not exonerated unless will directs exoneration. A general provision for payment of debts does not work to exonerate liens, must refer to the specific lien.

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changes in distribution of testatamentary gifts.

bequests of shares of stock and other securities.

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Gifts of shares of stock in publically traded corporations are general gifts, they don’t deem. Except, gifts of shares of stock in publically-traded corporations are specific gifts if the testator bequeaths “my…. Stock”
Gifts of shares of stock in closely-held company are specific gifts and they adeem if they don’t exist.
Gifts of shares of stock where a stock split occurs are: treated as a specific bequest for purposes of the split. Doesn’t matter if publically traded, or if “my…stock” language is used.

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Non-probate assets-

defintions/categories.

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oProbate estate: property that a testator owned solely in his name at the time of his death, which is disposed of pursuant to the terms of his will or passes by intestacy.
oNon-probate estate: interests in property that are not subject to disposition under the will or via intestacy.
oCategories of non-probate assets:
Property passing by right of survivorship (joint bank account, joint stock, pod accounts).
Property passing by k- including life insurance or employee benefits payable to a beneficiary other the decedent or decedents estate.
•If to testators executor or estate, they become probate assets
Property held in trust- terms of trust will govern the disposition of the trust assets.
Property over which decedent had a power of appointment.

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Elective share statute

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oTo protect the surviving spouse against disinheritance by giving him or her a minimum share of the testators probate estate.
oElective share- the greater of $50k or 1/3 of the estate.

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Elective share statute

payment of the elective share

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In theory, the elective share is only applies to the testators net probate assets. The value of the estate after payment of debts, but before payment of estate taxes.
Rule: if the elective share is not satisfied for surviving spouse, other sources just contribute pro-rata.
•Beneficiaries, and testamentary substitutes, and intestate distributees.
Surviving spouse elective v. intestate share: under intestacy, the surviving spouse takes there entire estate (if not survived by issue), or $50k plus ½ of the balance of the estate.

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elective share statute

testamentary substitutes

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Since the elective share applies only to the testators probate estate, a testator intent on disinheriting his spouse could defeat the protection of elective share by transferring non-probate assets to other persons. To prevent a testator from defeating the elective share statute, the elective share includes the probate estate and testament substitutes.
“Testament Substitutes need a LEG UP”
•Totten trusts- including bank accounts in the testators name, and pay on death securities.
•Survivorship estates- including joint tenancies, tenancy by the entirety, joint bank accounts, and survivor bank accounts. Watch for pre and post marriage scenarios.
•Lifetime transfer with strings attached- transfers where the testator retains the power to revoke, invade, consume, or dispose of principal, AND transfers (irrevocable) made during the \ marriage, where testator retained a life estate.
•Employee pension, profit-sharing, and deferred compensation plans.
•Gifts made within 1 year of death- gifts in excess of 13k AND gifts causa mortis.
•Us government bonds and other POD arrangements.
• Power of appointment- Property over which the testator held in a presently exercisable power of appointment.
oIf T has interest in it, is probably a T-Sub (except gifts).

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elective share statute

non-testamentary substitutes

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LOGPIT
•Life insurance- whether payable to the surviving spouse or third party.
•One half of a qualified pension and profit sharing benefits
•Gifts of less than $13k made within one year of death
•Pre-marriage irrevocable transfer.
•Irrevocable transfer made more than one year before death: transfers where the testator did not retain the power to revoke, invade, consume etc.
•Transfers (irrevocable) made during the marriage, where the testator retains a life estate.
oGenerally, if T doesn’t have an interest, its not a T-sub. Except life insurance.

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elective share statute

calculating the elective share

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•Generally, the full value of a testamentary substitute is included, except
o(1) survivorship estate involving the testator and a third party: consideration furnished test applies- surviving spouse has burden of proving amount of dead spouses contribution to the asset.
o(2) survivorship estates involving the testator and the surviving spouse: ½ is a T-sub.

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elective share estate

Survivorship estates created before marriage involving the testator and a third party

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the consideration furnished test applies, but only to ½ of the property’s value as a T-sub. Same rule applies to joint bank accounts, involving the testator and third parties, to the extent that deposits were made before the marriage.