Schwartz F03 Trusts & Estate Outline part 2

Schwartz F03 Trusts & Estate Outline part 2 - LAPSING...

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LAPSING Overview Implied condition of law that beneficiary is living at time of execution of will. If beneficiary is dead at time of execution, he cannot recover – null and void If devisee does not survive T, devise lapses (i.e. failed) All gifts made by will are subject to requirement that devisee survive T, unless otherwise provided Specific or general devise : If either lapse, devise falls into residue EXAMPLE: T’s will bequeaths watch to A (specific bequest) and 1K to B (general bequest). Residuary devise is C. A and B predecease T. Watch and 1 K to C. Residuary devise : If devise of residue lapses, predeceases T, then heirs of T take by intestacy. If share of residue lapses, this share passed by intestacy, does not go to other residuary devisees. (No Residue of a Residue Rule) EXAMPLE: T devises residue of estate ½ to B and ½ to C. B predeceases T. B’s ½ share goes to T’s heirs, not to C. Problem of Lapse Implied condition by operation of law that B survive T. EXAMPLE: T says, “I give all my real estate to X.” X dies before T. Gift to X lapsed. Partial Lapse EXAMPLE: “I give half my residue to X and balance to Y.” o Since gift to X, if it fails, that passes by intestacy o More modern approach (Statutory Approach) – Can have a residue w/in residue so total residue passes to Y Anti-Lapsing Statute Anti-lapse statutes operate on condition of manifest intent and saves gifts that would otherwise lapse Misnomer: Do not prevent lapse; merely substitute other beneficiaries (usually issue) for dead beneficiary if certain requirements met If devisee is not of a specified relationship to T and is survived by issue, who survive T, issue are substituted for predeceased devisee. An anti lapse statute applies to lapsed devise ONLY if devisee bears particular relationship to T specified in statute Default rule – applies unless T says otherwise. If T says statute does not apply, and does not include alternative gift, then common law default rules apply Class Gifts If devise is to a class of persons, and one member predeceases T, surviving members of class divide gift What is a class? T is group-minded – uses class label to describe beneficiaries (i.e. to A’s children or to my nieces) Label is not necessary – Bs described by individual names, but form natural class, can be deemed class if T’s intention Must determine whether class was intended – Did T intend legal effects of class gift Can have a member of group that does not have common ancestor (i.e. I give property to A and children of B) EXAMPLE: T b Brothers and Sisters. B1 dies before T, but leaves issue surviving. Will B’s share be passed over to his issue? Yes, in absence of contrary intent, it will pass to B’s issue.
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Schwartz F03 Trusts & Estate Outline part 2 - LAPSING...

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