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Lapse

Lapse. Lapse defined. Gift fails (lapses) because beneficiary dies before testator. Distribution of Lapsed Gifts -- Overview. 1. Under express terms of will. Distribution of Lapsed Gifts -- Overview. 1. Under express terms of will. § 68(e). 2. Saved by legal rule.

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Lapse

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  1. Lapse

  2. Lapse defined • Gift fails (lapses) because beneficiary dies before testator.

  3. Distribution of Lapsed Gifts -- Overview • 1. Under express terms of will.

  4. Distribution of Lapsed Gifts -- Overview • 1. Under express terms of will. § 68(e). • 2. Saved by legal rule. • Private Gift – Anti-lapse statute • Charitable Gift – Cy pres doctrine

  5. Distribution of Lapsed Gifts -- Overview • 1. Under express terms of will. • 2. Saved by legal rule. • 3. Via residuary clause. § 68(b).

  6. Distribution of Lapsed Gifts -- Overview • 1. Under express terms of will. • 2. Saved by legal rule. • 3. Via residuary clause. • 4. Via intestacy. § 68(d).

  7. Anti-Lapse Statutes -- Generally • 1. Save gift for descendants of deceased beneficiary.

  8. Anti-Lapse Statutes -- Generally • 2. Jurisdictions vary regarding relationship needed between testator and beneficiary to trigger anti-lapse statute.

  9. Texas Anti-Lapse -- § 68 • 1. Beneficiary is descendant of • Testator, or • Testator’s parent.

  10. Texas Anti-Lapse -- § 68 • 2. Beneficiary physically or legally dies before testator. • Biological death first. • Biological death within 120 hours. • Disclaims within 9 months of death.

  11. Texas Anti-Lapse -- § 68 • 3. Beneficiary left a surviving descendant.

  12. Texas Anti-Lapse -- § 68 • 4. Beneficiary’s descendant outlives testator by 120 hours.

  13. Texas Anti-Lapse -- § 68 • 5. Gift then passes to beneficiary’s descendants per capita with representation.

  14. Texas Anti-Lapse -- § 68 • 6. Ways to avoid: • Provide alternate gift in will. • Require survival in will.

  15. Partial Lapse in Residuary Clause • Fact Pattern: • “I leave remainder of my estate to A, B, and C.” • A dies before Testator. • Anti-lapse statute is inapplicable. • Issue: • Who gets A’s share?

  16. Partial Lapse in Residuary Clause • Orthodox View • Swearingen v. Giles – p. 168 • Passes by intestacy.

  17. Partial Lapse in Residuary Clause • Modern View • § 68(c). • Imply survivorship language.

  18. Problem 4, p. 170 • “I leave $10,000 to A and B.” • “I leave remainder to C and D.” • A and C predecease testator. • Assume A and C are not related to testator.

  19. Cy Pres • Method of saving lapsed charitable gifts. • Testator must have general charitable intent. • Gift saved for equitably equivalent charity.

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