Estates and Trusts FNBSLW 442

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Estates and TrustsFNBSLW 442

• Wills
• Changed Circumstances - Property

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Classification of Testamentary Gifts

• Specific Gifts identified in the will in
  sufficient detail to make it clear which exact
  asset a beneficiary is entitled to receive.
• General Gifts a gift that is insufficiently
  described to be specific.
• Demonstrative Gifts shares characteristics of
  specific and general gifts.
• Residuary Gifts property remaining after all
  specific, general, and demonstrative gifts are
  satisfied.

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Examples of Gifts

• Specific I leave my Sony notebook computer
  Model PGC-FX290 serial number 472957443 to
  name.
• General I leave a computer to name.
• Demonstrative I leave 50,000 from my account
  60983200 at Arvest National Bank to name.
• Residuary and everything else to name.

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Type of Beneficiary

• Testamentary gifts may also be classified based
  on the recipient of the property rather than the
  type of property.
• Private Gifts to an individual for that
  persons enjoyment.
• Charitable Gifts benefits society, e.g.,
  property for a park or museum.

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Ademption by Extinction

• The failure of a specific gift because the
  property is not in the testators estate when he
  dies.
• E.g., sold, given away, consumed, stolen, or
  destroyed.
• Most states apply a rigid rule if the exact
  gift is no longer in the estate, the gift adeems
  and the beneficiary receives nothing identity
  view
• Other states allow tracing and may permit the
  beneficiary to receive a substitute gift intent
  view
• E.g., the stolen Gremlin.

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Ademption in Wisconsin

• Generally rigid identity rule is applicable.
• W.S.A. 854.08 - Nonademption of specific gifts
  in certain cases The common law doctrine of
  ademption by extinction, as it might otherwise
  apply to the situations governed by this section,
  is abolished.
• Proceeds of Sale
• Proceeds of Insurance on Property
• Condemnation Award
• Sale or Loss of Property of Incompetent

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Ademption by Satisfaction

• Satisfaction is the failure of a testamentary
  gift because the testator has already transferred
  the property to the beneficiary between the time
  of execution of the will and the testators
  death.
• Specific gift example Brenda and the watch.
• General gift example College tuition for
  grandchild.

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Ademption by SatisfactionProof

• Common Law Courts rebuttable presumption of
  satisfaction.
• Modern Courts extrinsic evidence must prove
  that the testator intended for the inter vivos
  transfer to be satisfaction.
• Modern Trend separate specific writing
  declaring gift to be satisfaction or express
  provision in the will providing for deduction of
  inter vivos gifts from testamentary gifts.

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Ademption by Satisfactionin Wisconsin

• W.S.A. 854.09
• Inter vivos gift is considered satisfaction only
  if
• (a) the will provides such
• (b) an extrinsic document provides such or
• (c) transferee acknowledged such in writing
  either before or after death of testator.

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Changes in Value

• Change in value (appreciation or depreciation)
  between execution of the will and time of death
  is not considered when distributing testators
  property.
• E.g., real property.

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Exoneration

• Under common law, the rule was a person received
  encumbered property free of liens.
• Under modern law, the presumption is reversed.
  Exoneration occurs only if there is express
  language requiring it in the will.
• Wisconsin W.S.A. 854.05 No exoneration of
  encumbered property unless otherwise provided.

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Abatement

• The reduction or elimination of a testamentary
  gift to pay an obligation of the estate or a
  testamentary gift of higher priority.
• Usual abatement order
• Property passing via intestate succession.
• Residuary gifts.
• General gifts.
• Specific gifts.

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Abatement in Wisconsin

• W.S.A. 854.18 unless otherwise provided,
  shares of distributees abate, without any
  preference or priority as between real and
  personal property, in the following order
• Property passing via intestate succession.
• Residuary gifts.
• General gifts.
• Specific gifts.

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Tax Apportionment

• A number of states have enacted tax apportionment
  statutes so that the amount of each gift is
  reduced by the amount of estate tax attributable
  to the transfer.
• In effect, each transfer is reduced by its fair
  share of the tax rather than being subsidized by
  lower ranking gifts.