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What happens to legacies in cases of estate insolvency?
What happens to legacies in cases of estate insolvency?
A suspensive time clause allows beneficiaries to receive their benefit immediately.
A suspensive time clause allows beneficiaries to receive their benefit immediately.
False
What is a resolutive condition?
What is a resolutive condition?
A condition that causes a bequest to end upon the occurrence of a specified uncertain event.
A bequest that depends on an uncertain future event is known as a ________ bequest.
A bequest that depends on an uncertain future event is known as a ________ bequest.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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Which of the following is true about a modus?
Which of the following is true about a modus?
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A valid prohibition must contain a substitute beneficiary's name.
A valid prohibition must contain a substitute beneficiary's name.
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What is the difference between a suspensive and a resolutive time clause?
What is the difference between a suspensive and a resolutive time clause?
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What is the primary effect of a suspensive condition in estate distribution?
What is the primary effect of a suspensive condition in estate distribution?
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Estate massing can only be created by married couples.
Estate massing can only be created by married couples.
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Name one method of implementing estate massing.
Name one method of implementing estate massing.
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Under section 37 of the Administration of Estates Act, estate massing requires a mutual will with ______ or more testators.
Under section 37 of the Administration of Estates Act, estate massing requires a mutual will with ______ or more testators.
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Match the following methods of estate massing with their descriptions.
Match the following methods of estate massing with their descriptions.
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What must the survivor do for estate massing to take effect?
What must the survivor do for estate massing to take effect?
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If a beneficiary with a modus dies without fulfilling the conditions, the benefit goes to their heirs.
If a beneficiary with a modus dies without fulfilling the conditions, the benefit goes to their heirs.
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What does repudiation mean in the context of estate massing?
What does repudiation mean in the context of estate massing?
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What occurs when a benefit is left to a beneficiary after the testator's death?
What occurs when a benefit is left to a beneficiary after the testator's death?
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An absolute bequest has conditions attached to it.
An absolute bequest has conditions attached to it.
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What do we call a specific asset or amount of money left to a beneficiary?
What do we call a specific asset or amount of money left to a beneficiary?
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A bequest of the entire estate or a portion thereof is called an ______.
A bequest of the entire estate or a portion thereof is called an ______.
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Which term refers to the remaining estate after debts and legacies have been settled?
Which term refers to the remaining estate after debts and legacies have been settled?
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Match the following terms with their definitions:
Match the following terms with their definitions:
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If a legatee dies before the legacy vests, they can still inherit.
If a legatee dies before the legacy vests, they can still inherit.
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What happens if the debts of the estate exceed the available funds?
What happens if the debts of the estate exceed the available funds?
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Study Notes
Vesting
- Vesting occurs when a beneficiary acquires certain rights to an inheritance after the testator's death.
- Vesting applies to both wills (testate) and intestacy (intestate succession).
- Dies Cedit: The right to claim delivery of the benefit.
- Dies Venit: The right to actually enforce the benefit.
- Conditions imposed by the testator may delay Dies Cedit until the condition is fulfilled.
- Accrual does not apply once a beneficiary's rights have vested.
- Vesting helps determine how surplus capital or income is distributed among trust beneficiaries.
- Vesting also determines whether a beneficiary's interest accelerates if they renounce or repudiate their rights.
Bequests
- Absolute Bequest: A bequest without conditions, vesting occurs immediately upon the testator's death.
- Conditional Bequest: Vesting occurs only upon the fulfillment of a specified condition.
- Legacy: A gift of a specific asset or amount of money left to a beneficiary (legatee).
- Inheritance: A bequest of the entire estate or a portion of it, received by an heir.
- Pre-legacy: A legacy that must be paid before any other bequests.
- Residue: The remaining estate after debts, legacies, and administration costs are deducted.
- Insufficient Funds: If estate debts exceed available funds, legacies are proportionately reduced.
- Collation: Heirs might have to account for benefits received during the testator's lifetime, but legatees do not.
Lapse of Legacies
- A legacy can fail if the testator's intent cannot be carried out.
- Ademption: A legacy fails if the testator voluntarily disposes of the legacy object.
- If alienation is involuntary, the legatee may receive the value of the asset instead.
- If a legatee dies before the legacy vests, they must be alive to inherit, unless Section 2C of the Wills Act applies (substitution).
- If a legatee repudiates the legacy and no substitute is named, the legacy falls into the estate residue.
- If the bequeathed object is destroyed, it's assumed the testator revoked the legacy.
- In estate insolvency, legacies cannot be transferred to legatees as assets must go to creditors.
Time Clauses
- Time Clause: A provision in a will subjecting a bequest to a future event, certain or uncertain.
- Suspensive Time Clause: The beneficiary receives the benefit at a specific future time, but their rights are postponed. The benefit is certain, but the recipient must wait until the specified time.
- Resolutive (Terminating) Time Clause: A clause that ends the beneficiary's rights at a specific future time.
Conditional Bequests
- Depend on an uncertain future event.
- A valid condition must be clear, possible, and not illegal or immoral.
- Failure of the condition may render the bequest unconditional.
- Resolutive Condition: The bequest ends upon the occurrence of a specified uncertain event.
- Suspensive Condition: The beneficiary only obtains rights after a particular event occurs. The condition delays vesting until the event occurs.
- Fideicommissum: A conditional arrangement where the fiduciary's rights are subject to a resolutive condition, and the fideicommissary's rights are subject to a suspensive condition.
Nudum Praeceptum
- A prohibition that is not legally binding.
- If a testator restricts how a beneficiary can deal with property, but does not nominate a substitute to inherit if the restriction is violated, the prohibition is invalid.
- A valid prohibition requires a substitute beneficiary for the event of the initial beneficiary violating the condition.
Modus
- A qualification added to a testamentary bequest that requires the beneficiary to use the property or its value for a specific purpose.
- Does not make the bequest conditional or postpone the vesting of the beneficiary's rights.
- If the beneficiary does not comply with the modus, their rights are not affected, but they may be held liable through a personal action.
- Modus in the Interest of the Beneficiary
- Modus in the Interest of a Third Person
- Modus for the Furtherance of an Impersonal Object
- Key Difference from Suspensive Condition: A modus does not affect a beneficiary's vested rights, whereas a suspensive condition postpones vesting. For example, if a beneficiary with a modus dies before fulfilling it, the benefit still devolves to their heirs. However, if a suspensive condition isn't fulfilled, the vested rights are lost.
Massing of Estates
- The combination of two or more estates into a single unit for distribution after the death of the first spouse.
- Aims to maintain the surviving spouse's standard of living and provide for children.
- Not limited to married couples. Siblings, for example, can create estate massing.
Requirements for Estate Massing
- Intent to consolidate estates: Both testators must express their desire to combine their estates.
- Disposal of both the deceased and survivor's shares: The first-dying testator must clearly outline how both their own and the surviving testator's shares will be distributed.
- Acceptance by the surviving testator (adiation): The surviving testator must agree to the massing arrangement.
Aims of Estate Massing
- Protecting children.
- Providing for the surviving spouse to maintain their standard of living and ensure their support and education.
Methods of Implementing Estate Massing
- Usufruct: The surviving spouse receives a lifelong usufruct (right to use and enjoy the property), with the massed estate going to children after the survivor's death.
- Fideicommissum: The massed estate goes to the survivor and then to the children in equal shares after the survivor's death.
- Trust: The estate is held in trust for the survivor's benefit, with capital passing to children after the survivor's death.
- Unlimited Rights: The survivor receives outright ownership of the family home, while other estate assets are divided among children.
Section 37 of the Administration of Estates Act
- Estate massing requires a mutual will from two or more testators, the consolidation of property into a mass for distribution, limited interest for the survivor in the massed estate, and acceptance by the survivor (adiation) for it to be effective.
Consequences of Adiation
- The survivor loses the power to revoke the will.
- The survivor's estate becomes part of the massed estate.
Repudiation of Estate Massing
- The survivor receives no benefit from the deceased's estate.
- They retain their own estate and can dispose of it freely.
Customary Law of Succession and Estate Massing
- Allows for estate massing in wills to keep family property within the family.
- The surviving spouse may repudiate the arrangement.
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Description
This quiz covers important concepts related to vesting in inheritance law. Understand the principles of dying conditions, absolute and conditional bequests, and how heirs acquire rights upon the testator's death. Test your knowledge on these critical legal terms and their implications in estate planning.
