Probate & Trust Law Section Conference Manual ... - Minnesota CLE

“ (a) Property a testator, while living, gave to a person is
treated as a satisfaction of a devise in whole or in part, only
if (i) the will provides for deduction of the gift, (ii) the
testator declared in a contemporaneous writing that the gift
is in satisfaction of the devise or that its value is to be
deducted from the devise, or (iii) the devisee acknowledged
in writing that the gift is in satisfaction of the devise or that
its value is to be deducted from the value of the devise.”
c. A specific gift of securities in a will includes additional securities
acquired by reason of a corporate reorganization, securities of
another corporation resulting from a merger or other distribution
and securities of the same entity acquired through a plan of
reinvestment. Minn. Stat. §524.2-605.
d. Nonexoneration is the concept, codified in Minn. Stat. §524.2-607,
that a specific devise in a will passes subject to any mortgage or
security interest. See In re Stisser, 818 N.W. 2d 495 (Minn.
2012) for the issues that can arise when a decedent leaves property
passing separately under a will, a trust and through joint ownership
all subject to encumbrances. While keeping a will or trust current
so that it is reflective of the testator’s desires and the nature of
hie/her assets is always sound advice, it becomes critical if the
testamentary document provides for significant specific gifts.
While problems most commonly arise in situations where the
estate decreases in value, a will or trust providing specific gifts to
the preferred devisees which would at the time consume the bulk
of the estate may lead to an unintended result if the estate grows
significantly in value after the date the document is executed. The
more common problem arises when the estate declines in value and
then Minn. Stat. §524.3-902 provides for the order in which gifts
abate in such a situation.
(1) Even with a statute in place specifying the order of abatement,
problems can still arise. In In re Akerlund, 280 Neb. 89, 784
N.W.2d 110 (2010) a trust direction to create a separate trust
for one of the grantor’s two children to be funded with ½ of a
former trust and to fund this share first with specifically
identified real property with the remaining assets of the former
trust funding a trust for grantor’s other child resulted in
litigation when the specifically identified real property
exceeded half of the value of the former trust. The court here
found that it was the grantor’s intent to create two equal shares
for his children and the language specifying the funding of the
one share with the real property was only applicable if there
were sufficient assets to permit the funding of equal shares.
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