Transfers at death and by operation of law: wills, intestacy, ademption, exoneration, and lapse

Black-letter propositions

1. 01

   A will must be in writing, signed by the testator or in the testator's name at the testator's direction, and signed by at least two witnesses present at the same time who understand that it is the testator's will, though California treats a defectively executed will as valid if the proponent proves by clear and convincing evidence that the testator intended it to be the will.

2. 02

   If there is no will, or the will fails, land passes by intestacy to the statutory heirs, in California first to the surviving spouse's share and then to the issue, then parents, then issue of parents, then grandparents and their issue, and if there is no taker the estate escheats.

3. 03

   Ademption by extinction defeats a specific gift when the property no longer belongs to the testator at death because it was sold, destroyed, given away, or otherwise ceased to exist; a phrase like 'if owned by me at my death' is sometimes used to avoid confusion.

4. 04

   Ademption by satisfaction is different: it occurs when the testator gives the beneficiary property during life in lieu of the testamentary gift.

5. 05

   Modern statutes soften ademption: California gives the specific devisee the unpaid balance of the purchase price if the property was sold, an unpaid eminent domain award, unpaid fire or casualty insurance proceeds, and property acquired through foreclosure of a security interest on a specifically given obligation.

6. 06

   Exoneration is the right to have a lien on specifically devised property paid from the estate; in California a specific gift passes subject to any mortgage or lien existing at death, without a right of exoneration, regardless of a general directive to pay debts.

7. 07

   A devise lapses when the devisee dies before the testator, and the gift then falls into the rest of the estate unless an anti-lapse statute lets the devisee's relatives take; anti-lapse statutes in every state apply to some relatives, differ on which relatives, do not apply to non-relatives, and can be excluded by language in the will.

Use this attack sequence under time

Common wrong turns

• A general instruction to pay debts does not, under California's statute, entitle a specific devisee to have the mortgage on the gifted house paid.
• Ademption by extinction concerns the property's absence at death, and ademption by satisfaction concerns lifetime gifts in lieu of the bequest.
• An anti-lapse statute rescues a gift only for the relatives the statute covers, so a bequest to a friend who dies first lapses.

Worked example

A testator's will leaves 'my farm to my niece.' Before her death, the testator sells the farm and takes a note for $200,000 from the buyer, which is still unpaid when she dies.

Practice this topic

Wills and intestacy

California Probate Code section 6110 requires a will to be in writing and signed by the testator, or in the testator's name by another in the testator's presence and by the testator's direction, and witnessed by at least two persons who, being present at the same time, witnessed the signing or the testator's acknowledgment and who understand that the instrument is the testator's will. If the will was not executed in compliance, it is treated as valid if the proponent establishes by clear and convincing evidence that the testator intended it to constitute the will.

Section 6402 passes the part of an intestate estate not going to a surviving spouse to the decedent's issue, then to the parents, then to the issue of the parents, then to grandparents or their issue, and section 6404 applies the escheat provisions if there is no taker. The escheat provisions of Part 4 of the code apply only when the intestacy rules produce no taker.

Ademption and exoneration

Cornell's Wex entry says ademption refers to the destruction or extinction of a testamentary gift because the bequeathed assets no longer belong to the testator at death. It occurs when the property that was the subject of a specific bequest is sold, destroyed, given away, or no longer exists at death. The entry distinguishes ademption by satisfaction, which occurs when the testator gave property to the beneficiary during life in lieu of a testamentary gift, and mentions the phrase 'if owned by me at my death.'

California Probate Code section 21133 gives the recipient of a specific gift the right to the property to the extent the testator owned it and also any balance of the purchase price owing from a purchaser, any unpaid eminent domain award for the taking, any unpaid proceeds on fire or casualty insurance on the property, and property acquired through foreclosure of a security interest for a specifically given obligation. Section 21131 says a specific gift passes the property subject to any mortgage, deed of trust or lien existing at the date of death, without right of exoneration, regardless of a general directive to pay debts in the instrument.

Lapse and anti-lapse

Wex describes lapse in wills: if a specific devise is written into a will and the devisee dies before the testator, the devise lapses, and many jurisdictions have an anti-lapse statute. Its entry on anti-lapse statutes says such statutes exist in every state, prevent bequests from lapsing when the beneficiary has relatives covered by the statute, do not apply to non-relatives, and differ greatly on which family members they cover. It gives New York, which limits the anti-lapse rule to the testator's issue and siblings, and Missouri, which applies the rule to blood or adopted relatives, as examples.

Wex adds that the anti-lapse statute can be excluded by stating in the will that it does not apply. California's Probate Code section 21110, discussed in the survivorship module, is an example of a broad statute that substitutes the deceased transferee's issue unless the instrument shows a contrary intention.

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