Problems That Arise Because The Beneficiaries Change Between Execution of the

Problems that arise because the beneficiaries change

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Problems That Arise Because The Beneficiaries Change Between Execution of the Will and Death of The Testator – Lapse What happens if I leave X $5,000…but X dies before me? Do X’s will beneficiaries get the money? X’s heirs? Does the money come back to my estate? 1. Common Law Rule Regarding a Predeceased Will Beneficiary – The Devise Lapses The common law rule was that devises to an individual who dies before the testator lapse back into the testator’s estate barb2right the beneficiary’s estate and issue get nothing. So the $5,000 would lapse back into my estate. 2.Effect of Lapse (I.e. What Happens When the Bequest is NOT Protected by the Anti-Lapse Statute, so it Does Lapse?) (a) Specific and General Devises lapse into the testator’s residuary.
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38 (b) Residuary devises pass by intestate succession. BUT… Under the Modern Rule (as embodied in UPC §2-604 and the NY statute), if there are some surviving residuary devisees, residuary devises pass to those other residuary beneficiaries, not through intestate succession as under common law rule. square4 Lapse of a life-interest would simply fail (pass to remaindermen) b/c it is tied to the life of the B who is no longer alive. – T.D . 3. Modern Anti-Lapse Statutes Preserve Devises to Certain Dead Relatives (a) Reason: We assume that the testator would want issue of sufficiently close relations to take the money. (Question if this is true…) (b) Which Bequests (i.e. Bequests to Whom) Are Preserved By Anti-Lapse Statutes? Different states’ statutes protect different devises… i. All Anti-Lapse Statutes Protect Devises to Children ii. NY’s Statute § 3-3.3 (Page 288) only protects bequests to the testator’s issue and siblings who die leaving issue. iii. Other States (like New Hampshire) have much broader statutes that preserve bequests to many other people. (c) Who Takes When an Anti-Lapse Statute Preserves a Devise In all states but Maryland, the dead beneficiary’s issue , not will beneficiaries get the property. octastar2 You can change this default rule in your will instead of leaving it up to the statute. E.g. “If X predeceases me, I direct that the money should pass according to X’s will.” 4. NY Statue in Action Testator’s will includes the following dispositve provisions: (1) $30,000 to my sister, Samantha. (2) $40,000 to my husband’s brother, Bernie. (3) $50,000 to my uncle, Jim. (4) $5 to my brother, Carl. (5) The remainder of my estate to my sister’s daughter, Nancy, and my husband’s daughter, Debbie, in equal shares. At testator’s death, her estate was valued at $200,005. T’s husband had predeceased her and she died childless. Samantha and Carl were her only siblings. Samantha, Bernie and Jim all predeceased her. Samantha was survived by her daughter, Nancy, and her husband, Tom – her will left all her property to Tom. Bernie was survived by
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39 his daughter Esther, to whom he left his entire estate; Jim was survived by his son, Kurt, to whom he left his entire estate.
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