The Supreme Court of Pennsylvania first the issue in In re Braman's Est., 35 Pa. 573, 258 A.2d 492 (1969). In that case, Mary Goddard passed away and left the residue of her estate to her sister Ruth or Ruth’s estate if she had predeceased. Ruth did pass away first, and upon Mary’s passing, the court had to figure out whether Mary’s assets would follow Ruth’s will or pass by intestacy through Ruth’s estate. The trial court allowed this gift and believed Mary’s assets would pass by Ruth’s residuary clause. Ruth’s intention did not restrict her will to only the parts she owned at the moment of her death.
The Supreme Court disagreed. They reasoned that at the time of Ruth’s execution of her will and death, Ruth had no interest in any of Mary’s assets. A will allows a person to dispose of their property while still alive but can not make a post-mortem disposition of property they did not own (or have any right to) at the time of their death. The testator must have had an interest in the property at the time of death, not at the time of distribution. This difference allows Social Security Benefits, recoveries in death actions, and stock dividends to go to an estate: the decedent had an interest in these payments prior to their death. In contrast, Ruth had no interest in Mary’s property during her life, and thus could not dispose of them in her own will. The lower judgment was quashed and the assets would follow the laws of intestacy within Ruth’s estate.
Largely in reaction to the Re Braman result, Section 2-602 of the Uniform Probate Code was passed to specifically address such scenarios, stating:
“A will may provide for the passage of all property the testator owns at death and all property acquired by the estate after the testator's death.”
However, some jurisdictions (most notably New York) have refused to incorporate a similar provision in their Probate legislation. This has given rise to unique case law over post-death acquisition of assets by an estate.
Shaw Fam. Archives Ltd. v. CMG Worldwide, Inc., 486 F. Supp. 2d 309, 310 (S.D.N.Y. 2007) was a famous 2007 case that revisited the rare issue again. The ownership over Marilyn Monroe’s right of publicity after her death was disputed. At her death, there was no law recognizing post-mortem publicity rights in New York or California, but later Publicity Acts in both states would allow such transfer of publicity rights to heirs and beneficiaries. The administratrix of Marilyn Monroe’s estate claimed that Marilyn’s image rights should pass to her beneficiaries through her will’s residuary clause, and thus they could sue Shaw for infringing on these image rights.
However, the court ruled Marilyn did not have a property right to transfer these image rights at the time of her death. The court stated that California and New York testators (since Marilyn resided in both) could not dispose of property they did not own at the time of their death.
In its decision, the court also referred to s. 2-602 of the Uniform Probate Code, but ultimately determined that this statute had nothing to do with New York or California law. Neither N.Y. nor California adopted 2-602 in full or in part. Despite attempts in the rest of the country to change the law, these changes did not affect New York cases.
Seven years later, Crosby v. HLC Properties, Ltd., 223 Cal. App. 4th (2014) examined a similar postmortem right to publicity in California. In this case, the celebrity Bing Crosby was predeceased by his first wife Wilma. When Wilma passed away, she left her community property in trust to be distributed to her four sons. Bing remarried to Kathryn, and upon his death, left the residue of his estate in a marital trust for her. In 1996, Wilma’s Trust sued Kathryn’s trust for the trust’s interest in community property of Bing and Wilma. This issue was settled out of court in 1999 for $1.5 million.
In January 2008, the California legislature amended the publicity section of their Civil Code to allow a decedent’s right of publicity to descend by both will and intestacy. The new section 3344.1 allowed publicity rights to be transferred by will or intestacy without regard for when the decedent passed away. This created a retroactive interest, allowing the disposition of publicity rights even if the decedent had died prior to the enactment of the law. Wilma’s Estate filed a petition for an order that it held a community property interest in Bing’s right to publicity, and that this interest passed to Wilma’s heirs through her will.
The trial court agreed with Wilma’s argument that the community property interest in the publicity rights was passed to her heirs. However, the California Court of Appeal reversed based on res judicata grounds, since the parties had settled the community property issues in 1999.
Ultimately however, this case demonstrated that a state legislature could create exceptions to the rule governing property acquired by an estate after a decedent’s death. The retroactive nature of the amended section 3344.1 would have allowed Wilma’s Estate to dispose of her share of the publicity rights to her children.
The question of after-acquired property was again brought to the New York Supreme Court in In re Estate of Keough, No. 2021-03948 (N.Y. App. Div. 2021). Unlike publicity rights cases, this issue demonstrates a more likely scenario for most Americans: a post-mortem compensation scheme.
William Keough, husband of Katherine Keough, was held captive for over a year during the 1979 - 1981 Iran hostage crisis. William passed away in 1985, while his wife Katherine passed away in 2004. Katherine was testate at the time of her death and left the residuary of her estate to her unadopted stepson Steven. However, Katherine also had a brother Fred. Fred would be the sole distributee under New York laws of intestacy due to Steven’s unadopted status. Fred passed away in 2018, the administrator of his estate brought forward the issue on its and his heirs' behalf.
In 2015, Congress passed the Justice for United States Victims of State Sponsored Terrorism Act which granted compensation to former Iranian hostages and their family members. Under this new Act, Katherine was entitled to $600 000. If the person entitled to compensation was deceased, the payment would be made to the "personal representative of their estate".
Fred’s administrator petitioned the court for declaratory relief, asserting that since the $600 000 passes to the decedent’s personal representative, it was never the decedent’s property. Thus the petitioner asserted that Katherine was not entitled to dispose the award at the time of her death, and thus the $600 000 falls must be distributed through New York’s intestacy laws. The petitioner claimed that the amount is an after-acquired asset that should pass to Fred’s estate rather than to Steven through Katherine’s residuary clause.
The New York Supreme Court started its analysis by looking into the history of the treatment of property in the common law. Originally, under the common law, the acquisition of real property after the will was executed but before the testator’s death would not pass by the will. This problem would be changed by statutes such as EPTL 3-3.1 which states:
“Unless the will provides otherwise, a disposition by the testator of all his property passes all of the property he was entitled to dispose of at the time of his death.”
However, this statutory change was explicitly limited and never extended to property acquired by the estate after death. The court reiterated and agreed with the reasoning in Shaw, echoing that “the New York rule is grounded in the testator’s lack of capacity to devise property he or she does not own at the time of death”. Since Katherine could not have known about the future passing of the victim’s compensation legislation, she could not have disposed of its proceeds in her will. The $600 000 would pass by the laws of intestacy to Fred’s estate.
Ultimately, this series of cases demonstrates that American State Legislatures should be careful in dealing with property acquired by an estate after a person’s death. Despite increasing movement in passing laws to allow the disposition of property unowned at death, improper wording of legislation can lead to the intestate distribution of a testator’s property. In the future, legislators should include clear and unambiguous language in all post-death rights and payments. Like California’s s. 3344.1 for publicity rights, future legislation should specify the right of testators to include the after-acquired property or right in their wills while also clarifying the law’s retroactive effect on those who died before the law’s enactment.
Estate planners should know whether their state have incorporated section 2-602 of the UPC in their laws. This information can help in planning one’s estate for the long-term, since intestate succession for some assets may impact the distribution one foresees in their will.