Discussion of lapse and antilapse statutes. Unless a will quite explicitly states that a gift is to go to the beneficiary’s estate, when the beneficiary does not survive the testator, the gift will automatically lapse. This is analogous to intestate succession, where an heir apparent must survive the decedent to actually end up being an intestate heir. The purpose of these principles is to prevent property from going through multiple probates and through multiple taxable events.
One of the confusing things about the doctrine of lapse is the way that it intersects with typical dispositive language in a will. We are used to seeing gifts in wills that include explicit conditions of survivorship—e.g., “to my wife Lois, if she survives me.” With language of this type it is obvious that if Lois does not survive and if no alternative beneficiary is named, the gift must fail. However, lapse applies without explicit conditions of survivorship being imposed, so that if the will simply says “to my wife Lois” and Lois predeceases the testator, the gift would also fail or “lapse.” We do not presume that the testator intended Lois’ estate to be the beneficiary in her place.
In a well-drafted will, the chances of lapse should be very low, because the testator should anticipate that a beneficiary might predecease her and provide for it. For instance we don’t have to worry about lapse if a wills says something like, “ to my wife Lois, if she survives me, but if she does not survive me, then to the American Cancer Society.”
As you can see, mastering this area first requires determining what the will says and then applying the legal rules to that language.
LAPSE IN LAST WILL AND TESTAMENT
Lapse is a common law concept with a set of rules that tells us how a lapsed gift is distributed based on the kind of gift that it is. The types of gifts are “specific,” “general,” “class” and “residual.” A specific gift is a gift of a particularly identified item, e.g., “my 1998 VW Beetle, vehicle identification number 000001234.” A general gift is more generic, but is still not a gift of the residue of an estate. The most typical example is the gift of an amount of money, e.g., $50,000—this is known as a legacy. Class gifts can actually also be specific, general, or residual in form, but give the gift to a group. For example a gift that says, “I give all the rest and residue of my estate to my children in equal shares,” is a class residuary gift. What are the common law lapse rules that apply to these gifts?
Specific and general gifts that lapse go into the residue and the beneficiaries of the residuary estate take them. If one of the members of a class predeceases the testator, that member’s proportionate share of the gift goes to surviving class members. In contrast, if a residuary gift lapses, it is distributed to the intestate heirs. Under traditional rules, if there were two beneficiaries of the residue and it was not a class gift (for instance if the will said, “I give all the rest and residue of my estate to Bruce Berner and Laura Dooley”--not a class gift), then if one of the beneficiaries died, that beneficiary’s portion of the residue went by intestate succession. The old maxim was that there is “no residue of a residue”. Most states and UPC sec. 2-604(b) change this result so that the other residuary beneficiary would take the share, not intestate heirs.
As time progressed, many came to think that the common law rules of lapse were too far removed from what the testator’s actual intent might be. In response, most states have passed “antilapse” statutes. These laws substitute alternative beneficiaries for those who would otherwise receive lapsed gifts. They commonly specify the substitutes as the descendants of original beneficiaries who are in a special relationship to the testator. The policy assumption behind antilapse laws is that the testator would prefer the substitute beneficiaries identified by the statute to take in place of those who would get the gift if the common law rules of lapse applied. As stated above, they assume that testators would prefer descendants to others, for instance, to the testator’s siblings, who might take if the gift went by way of intestate succession.
There are several things to consider in determining if an antilapse statute applies: First, has the gift really lapsed? Second, is the original beneficiary in the right relationship with the testator for the statute to apply? Usually that means the beneficiary must be the testator’s child or parent—amazingly, it does NOT typically cover a spouse! Third, does the predeceased original beneficiary have issue who can be alternative beneficiaries? Finally, did the will contain any language that indicates the testator did not want the antilapse statute to apply? If so, then the common law rules reappear and determine the result. Here the big issue is whether words of survivorship, e.g., “to my wife Lois, if she survives me,” express an intent that the antilapse statute not be used. Most states treat words of survivorship as stating an express intent that the antilapse statute not be applied. The 1990 version of UPC 2-605 reverses this so that general words of survivorship without more do not prevent an antilapse statute from applying.
The material is difficult to understand the first time through, so let’s look at some examples. We will use the Texas antilapse statute referenced in Allen v. Talley
1. Grumpy’s will specifies: “I give $50,000 to my daughter, Martha, and the rest and residue of my estate to my best friend, John.” Martha predeceases Grumpy. Who takes? The gift to Martha is a general gift that has lapsed. Under the common law of lapse, it goes to the residuary beneficiary, John. The result might be different under the Texas antilapse statute. It applies to a predeceased devisee who is a “descendant of the testator or a descendant of a testator’s parent.” Martha is a descendant of Grumpy, so the statute might apply. However, does she have issue? The Texas statute will substitute “descendants of the devisee [described above; here Martha] who survived the testator by 120 hours”. Assume that Martha has a child, Roy, who is still alive. The Texas statute would substitute Roy in place of Martha and he would receive the $50,000, not John.
2. Now assume the same facts, but the will states: “I give $50,000 to my daughter, Martha, if she survives me, but if she does not survive me, then I give $50,000 to the American Cancer Society; I give all the rest and residue of my estate to my friend, John.”
Martha predeceases Grumpy. There is no lapse, as Grumpy has specified an alternative beneficiary, the American Cancer Society, that is still in existence.
3. Now assume the will says: “I give $50,000 to my daughter, Martha, if she survives me; I give the rest and residue of my estate to my best friend, John.” Martha predeceases Grumpy. Who takes? Here there is lapse, but the words of survivorship might be interpreted to express Grumpy’s intent that the Texas antilapse statute not apply. In that case the common law of lapse controls and John takes. Under the UPC, the words of survivorship are ignored and the UPC antilapse statute applies. Thus, Martha’s child, Roy, would take the legacy.
4. Assume that the will says: “I give my estate to my wife, Laura, and to my friend, John.” Laura predeceases Grumpy. Martha is the child of Grumpy and Laura. The will was executed after Martha’s birth. Who takes? This is not a class gift, as Laura and John are named individually and do not make up a natural class. Under traditional rules, the gift to Laura lapses. Would the Texas antilapse statute apply? No, Laura is not a descendant of Grumpy or of Grumpy’s parent. Martha, Laura’s issue, will not be substituted for Laura. Martha is also not a pretermitted heir because she is not born after the will. Depending on how Texas treats the problem of the residue of the residue, Laura’s share will go by way of intestacy (so Martha might get it anyway) or will go to John.
Allen v. Talley—did the words “I give, devise and bequeath unto my living brothers and sisters . . . all of my property. . . .” include words of survivorship that prevented application of the Texas antilapse statute where only two siblings survived the testator. Held: “living brothers and sisters” required survival. Only the siblings who were alive on the testator’s death were eligible to take the estate. Thus, no lapse occurs and the antilapse statute is inapplicable.
Jackson v. Schultz—did the words “I give … unto my beloved wife Bessie … all my property … and to her heirs and assigns . . . .” name Bessie’s heirs as alternative beneficiaries or only constitute words of limitation? If the latter, since Bessie predeceased the testator, the gift would lapse. Bessie is the wife of the testator so the antilapse statute of Delaware would not apply. The common law would cause the lapsed gift to go by way of intestate succession. However, Bessie has children of her own; nonetheless, because they are stepchildren of the testator, they would not be intestate heirs. On the other hand, if the words “and her heirs and assigns” designates an alternative beneficiary, there is no lapse at all, and the property would go to Bessie’s children, her “heirs and assigns”. The court holds that the phrase “or her heirs and assigns” would be a beneficiary designation and that the word “and” can be treated like the word “or,” given that there is no intestate heir and the estate would escheat to the state. In addition the “material circumstances” of the will showed that the testator did not intend for his blood relatives to take.
Dawson v. Yucus—did the testator intend to make a specific gift of land in class form or a specific gift of land to two different individuals? Once again, the antilapse statute of the jurisdiction does not apply because the beneficiary who predeceased the testator did not stand in the kind of special relationship to her that triggers the statute—he was one of her nephews by marriage, not a blood relative. This means that the common law rules of lapse apply. If the gift is a class gift, then the surviving class member gets the deceased beneficiary’s share. If not, then as a specific gift, the ½ interest in the land that lapsed goes to the residuary devisees. Even though the will stated, “believing as I do that those farm lands should go back to my late husband’s side of the house,” and that refusing to construe this as a class gift would violate this wish, the court still held this gift to be individual. This is because the nephews were designated by name, not group, and their shares were designated by amount, not as a pro rata portion. Also, they were not members of a natural class vis-à-vis the testator. Thus, the gift lapsed when one of the nephews predeceased the testator and went to the residuary beneficiaries.
In re Moss—again this raised the issue of whether a devise is a class gift or not, in the context of lapse. The gift is specific as well, because it is a designated number of shares in the Daily Telegraph newspaper. We ignore the trust form for purposes of the analysis. The will stated in essence, “to E. J. Fowler and to the children of my sister, Emily Walter, who shall attain the age of 21 years equally to be divided between them as tenants in common.” E.J. Fowler predeceased the testator. If the gift were individual, Fowler’s share would pass to the residuary beneficiary, the testator’s wife. If the gift is a class gift, the children of Emily Walter who survive and attain 21 get Fowler’s share. The court held this to be a class gift because E.J. Fowler was of the same degree of kinship as the other beneficiaries (she was a niece) and it was clear from the face of the will that the testator did not intend for his wife to control the shares of stock. Moss states a rule that is contrary to the weight of American authority. Gifts in the form “to A and the children of B” are typically treated as individual gifts in most states. However the Restatement of Property sec. 284 treats this form as a class gift. On this fact pattern, there really is no clear rule.
Antilapse Case Law from West Virginia
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