When Beneficiaries Predecease: an Empirical Analysis

• Publication year: 2022

When Beneficiaries Predecease: An Empirical Analysis

Adam J. Hirsch

WHEN BENEFICIARIES PREDECEASE: AN EMPIRICAL ANALYSIS

Adam J. Hirsch^*

Abstract

Under current law, bequests to beneficiaries who predecease the testator "lapse" to the beneficiary of the residuary, unless they are preserved for the descendants of predeceased beneficiaries under an "antilapse" statute. The beneficiaries covered by antilapse statutes vary from state to state, but in most states today the statutes apply only to blood relatives of the testator as distant as first cousins. This Article examines the public policy of antilapse statutes, assessing them by undertaking the first-ever survey of popular preferences concerning the matter. Harvesting evidence for five types of beneficiaries, the study finds that the prevailing structure of antilapse statutes is both over- and under-inclusive. On one hand, among beneficiaries who comprise blood relatives, most respondents prefer to create substitute bequests only for descendants of predeceased children. Lawmakers should strike other relatives from the statutes' coverage. On the other hand, most respondents would create substitute bequests for their descendants if their spouse predeceased them. Lawmakers should extend the range of the statutes accordingly. Finally, this Article advocates enhancing courts 'power to deviate from mechanical rules of lapse in situations where testamentary intent is less predictable.

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Table of contents

Introduction..........................................................................................308

I. History........................................................................................310
II. Modern Doctrine.......................................................................322

A. Wills.......................................................................................322

1. The States ......................................................................... 322
2. The Code ..........................................................................324

B. Construction ........................................................................... 334

1. "To A and his heirs"......................................................... 335
2. "Residue, including all lapsed bequests, to A" .................. 337
3. "To A if A survives me" .................................................... 339

C. Will-Substitutes....................................................................... 342

III. Policy...........................................................................................350
IV. Empirical Evidence.....................................................................356

A. Spouse ....................................................................................358
B. Children .................................................................................360
C. Siblings................................................................................... 362
D. Distant Relatives..................................................................... 363
E. Friends and Employees........................................................... 365

V. Analysis.......................................................................................366

Conclusion.............................................................................................378

Appendix.................................................................................................381

Introduction

"The intention of the testator is the first and great object of inquiry; and to this object technical rules are, to a certain extent, made subservient."

Chancellor Kent¹

In the nature of things, testators execute their wills at times distinct from when they mature. Historically, the hiatus separating those two events was rarely prolonged. From the medieval age until the late nineteenth century, most testators dictated their wills on the deathbed.² However hastily conceived, estate

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plans rarely grew out of date. Nowadays, testators more commonly formulate their estate plans in the prime of life.³ Unless testators update their wills periodically, changing circumstances can render estate plans anachronistic—or can thwart them altogether.⁴

Consider the case of a will naming a beneficiary who, as matters unfold, predeceases the testator—a common occurrence today.⁵ The estate plan can no longer take effect literally. A decedent cannot accept a bequest because doing so is "impossible."⁶ Testators might, of course, foresee the possibility of impossibility. Contingency clauses can specify who is to receive a bequest in lieu of a deceased beneficiary. Many wills include such provisions. Many others do not. Homemade wills, making up around a third of the total, are notoriously inattentive to the risk that beneficiaries "of tender age" will fail to survive the testator.⁷ Faced with failures of anticipation, lawmakers must step in to reformulate foiled estate plans.

Lawmakers have done so by enacting paired doctrines of lapse and antilapse. The first establishes general rules, and the second carves out exceptions from those rules. Among American states, statutes of this sort feature notable diversity. Although lawmakers generally agree—as Chancellor Kent maintained⁸ —that testamentary intent should guide them in crafting rules that

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fill gaps in wills, lawmakers in different states appear hopelessly at odds over how to accomplish this end. Kent himself hedged in his assessment of the "extent" of lawmakers' subservience to intent.⁹ He may have been alluding to other policies setting limits on freedom of testation.¹⁰ The main impediment to consensus, though, is uncertainty. If lawmakers have only an inkling of what the throng intends, they can scarcely respect intent substantively. The scattershot quality of rules of lapse reflects lawmakers' ignorance of testators' preferences.

To take better aim, lawmakers need data. No prior study has undertaken surveys of testamentary intent regarding the treatment of bequests to predeceasing beneficiaries. This Article presents hard evidence on the question for the first time.

The analysis will unfold in stages. Part I examines the problem of lapse through the lens of history. Part II leaps to the present, surveying the current state of the law in this area. Part III reviews the public policies applicable to the problem, underscoring the importance of empirical analysis of testators' intent regarding lapsed bequests. Part IV presents the first-ever empirical study of intent, laying out evidence from five surveys of popular attitudes to the problem. These surveys (graphed in the Appendix) indicate that testators prefer to substitute their children for predeceased spouses, and grandchildren for predeceased children, but otherwise wish to redirect lapsed bequests to the residuary taker of the estate. Part V proposes legislative reforms grounded in the data, together with other reforms based on inferences drawn from the data. Part V also identifies areas where data cannot clarify intent and suggests that lawmakers grant discretion to courts to deviate from mechanical rules in those areas. Finally, the Conclusion weighs in on the larger significance of empirical evidence for inheritance law.

I. History

The problem of predeceasing beneficiaries generated legal doctrine in England from a remote period.¹¹ Historically under English law, different courts shared jurisdiction over wills. Whereas inheritance of real property came within the province of the common-law courts, inheritance of personal property—of relatively small value prior to the industrial revolution—lay in the hands of the

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ecclesiastical courts, whose judges drew on Roman civil law.¹² Inevitably, this dual system led to duels over doctrine. In a myriad of ways, English courts disagreed over rules of inheritance—and because they held sway over separate subject matters, different courts could resolve litigation over a "mixed will," disposing of both real and personal property, inconsistently.¹³ Eventually, English reformers simplified this system. Subject-matter unification of the English law of inheritance occurred in increments over the course of the eighteenth, nineteenth, and early twentieth centuries.¹⁴

So it was with the law of lapse. Testators could anticipate lapse by naming contingent beneficiaries in the event a primary beneficiary predeceased. Clauses providing for this contingency appeared in wills as early as the fourteenth century.¹⁵ In the absence of such a clause, however, English courts needed a rule

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of law, and at first they went their separate ways. In the ecclesiastical courts, lapsed bequests of personal property fell into the residue and accrued to the residuary legatee—that is, the taker named to receive any part of the estate left over after satisfying particular bequests under the will; contrarily, in the common-law courts, lapsed devises of real property flowed to the heirs of the testator, bypassing the residue.¹⁶ The distinction blurred when testators left demonstrative devises that provided legacies of money from the sale of land. Most courts treated lapsed demonstrative devises under the common-law rule "because the real estate was land at the devisor's death."¹⁷ Still, the decisions were not unanimous. One high court characterized a lapsed demonstrative devise as "factitious personalty" and allowed it to flow into the residue.¹⁸

The dichotomy between lapsed bequests and devises emerged out of competing conceptions of testation itself. Following civil law, ecclesiastical courts viewed bequests of personal property as expectancies. In the eyes of the civilians, a residuary clause could therefore be all-encompassing.¹⁹ Its net extended broadly enough to capture lapsed bequests.

Common-law courts took a different view. They conceived devises of real property as conveyances, although "not . . . subject to the...