Lapse and Anti-lapse Statutes

Terms:

Lapse:
Failure of a bequest or devise to vest in the beneficiary due to the death of the devisee or legatee prior to the death of the testator.

Anti-lapse statutes:
Legislation enacted in most jurisdictions to provide for the testamentary passing of property to heirs and relatives of the designated beneficiary if that person dies before the testator. (It is a mechanism to prevent these gifts from lapsing.)

Lapse

When a beneficiary dies before the testator, the gift fails, or “lapses.” Once again we look to the category of bequest to ascertain what happens to a gift that has lapsed. When a residuary legacy or devise lapses, the property passes pursuant to the intestacy statutes. The lapse of a specific, demonstrative or general bequest results in the property usually ending up in the residuary of the estate, absent a contrary provision in the will. See, e.g., UPC § 2-604(a); Mo. Rev. Stat. § 474.465; Tex. Prob. Code § 68.

Example: In Billie Jean’s will, she devised her home in Denver, CO to her brother, Billy Bob; left $5,000 to her nephew, Jed; and the residuary of her estate to her sister, Betsy. Billy Bob and Jed predecease Billie Jean. Neither one had any other lineal descendents. Afterwards, the home in Denver and the $5,000 move to the residuary estate, since those gifts lapsed. As a result, Betsy will receive the home and the $5,000, plus anything else left in the residuary estate.

Anti-lapse statutes

To avoid the predeceased beneficiary’s gift from lapsing, all states have anti-lapse statutes. Specifically, if the predeceased beneficiary was a relative and had issue, the anti-lapse statutes provide for substitution of the deceased beneficiary’s issue to take the gift instead of the beneficiary himself. Yet, states have various definitions for what type of relative qualifies under their respective anti-lapse statutes.

For instance, some states take a narrow view as to who is a qualifying beneficiary, such as limiting the category of predeceased beneficiaries to a child or other descendent of the testator. See, e.g., Ark. Code § 28-26-104. In other cases, the gift simply lapses.

Example: In Bobbi Jean’s will, she devised her home in Denver, CO to her nephew, Jed (her brother, Billy Bob’s son) and her residuary estate to her sister, Betsy. Jed predeceases Bobbi Jean, leaving a daughter, Renata, who survives Bobbi Jean. The anti-lapse statute is inapplicable to save the gift for Renata because Billy Bob was not Bobbi Jean’s descendent.

In a more expanded view of the anti-lapse statute, some states extend the predeceasing beneficiaries to descendents of the testator’s parents, thereby capturing brothers and sisters and their offspring. See, e.g., La. Civ. Code art. 1593; Tex. Prob. Code § 68. However, in Connecticut and New York, the line stops at the siblings, thereby excluding their offspring or nieces and nephews. See, e.g., Conn. Gen. Stat. § 45a-441; N.Y. Est. Powers & Trusts Law § 3-3.3.

Example: In Bobbi Jean’s will, she devised her home in Denver, CO to her brother, Billy Bob and her residuary estate to her sister, Betsy. Billy Bob predeceases Bobbi Jean, leaving a son, Jed, who survives Bobbi Jean. The anti-lapse statute applies to save the gift for Jed because he is a descendent of an included predeceased beneficiary—Bobbi Jean’s brother. However, if Bobbi Jean lived in either Connecticut or New York, the gift would fail because a nephew is not included in their anti-lapse statutes.

In the broadest view of the anti-lapse statutes, some states apply their statute if the predeceasing beneficiary was a child or other relative of the testator. See, e.g., Mass. Gen. Laws ch. 191 § 22; Mo. Rev. Stat. § 474.460; Neb. Rev. Stat. § 30-2343. The only restriction in these cases is if the predeceasing beneficiary is not related to the testator by blood or adoption, thereby excluding relatives by marriage. See, e.g., Estate of McReynolds, 800 S.W.2d 798 (Mo. 1990); In re Dodge’s Estate, 84 N.W.2d 66 (Wis. 1957).

Example: In Bobbi Jean’s will, she devised her home in Denver, CO to her stepson, Tad and her residuary estate to her sister, Betsy. She had never adopted Tad. Tad predeceases Bobbi Jean, leaving a son, Tad, Jr., who survives Bobbi Jean. The anti-lapse statute does not apply to save the gift for Tad, Jr. because Bobbi Jean was not related to Tad by blood or adoption.

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