Most people usually include friends and family who are younger than they are in their will, with the expectation that they will outlive them and inherit a share of their money and property. In some cases, however, one or more of these beneficiaries (known as a “predeceased beneficiary”) might pass away before the individual who made the will (known as the “testator”). This can complicate matters after you’re gone, so you should make sure you address this possibility with your estate lawyer when drafting and certifying your will.
Keep reading to learn what a predeceased beneficiary is and what happens to their share of an estate when they die before the person who made the will.
What Is a Predeceased Beneficiary?
A predeceased beneficiary is an individual named in a will who dies before the person who created the will. This situation occurs much more often than most people realize and can lead to a lot of stress and confusion for those loved ones and beneficiaries who are left behind — especially if this possibility isn’t explicitly addressed in the will.
Possible Outcomes in the Event of a Predeceased Beneficiary
In most cases, assuming the testator has named more than one beneficiary, the funds or assets that were supposed to go to the predeceased beneficiary will be distributed to the other surviving beneficiaries according to the terms of the will or trust. If this person was the sole beneficiary or if none of the beneficiaries outlive the testator, the executor of the will is responsible for distributing the testator’s finances, properties, and assets according to the terms of the will.
This is where things can sometimes get tricky, so we’ve outlined the most common possible outcomes in the event of a predeceased beneficiary.
Bequest Lapse
When a beneficiary dies before a testator, a bequest lapse can occur. Essentially, a bequest lapse simply states that the predeceased beneficiary’s share of the estate ceases to exist in the event of their death. However, every state (including Michigan) has some form of anti-lapse statutes that could allow the predeceased beneficiary’s close family member(s) to take possession of their share of the estate. Be sure to ask your estate lawyer about anti-lapse statutes when drafting your will.
Residual Clause
If there are multiple beneficiaries who outlive the predeceased beneficiary, they are likely eligible to receive his or her portion of the estate that is reabsorbed into the residuary estate. Residuary estates also include anything that the testator forgot to leave in their will or that the testator acquired prior to their death without updating their will.
Per Stirpes Provision
Testators who are concerned about the possibility of predeceased beneficiaries can include a stipulation in their will called a “per stirpes” (Latin for “by roots”) provision. This allows them to stipulate that if their beneficiary dies before they do, the predeceased beneficiary’s share of the estate passes to relatives of theirs explicitly named in the will. If the testator wishes, he or she can also name relatives of the per stirpes beneficiaries to receive his or her shares in the event that these beneficiaries also die before the testator.
Interstate Succession
Finally, we commonly see instances where a testator names a lone beneficiary. If this individual passes away and becomes a predeceased beneficiary, the will becomes null and void and the estate passes on to the testator’s closest family member(s). Often, this means that the entirety of the estate is passed on to a surviving spouse, regardless of how long the two were married. Obviously, this can cause a serious rift with surviving friends and family members, which is another reason why thorough and deliberate estate planning is so crucial to a seamless transfer of finances, assets, and property after the testator passes away.
Related: The Michigander’s Complete Estate Planning Checklist
Contact the Law Office of Kari Santana for Help With All Your Estate Planning Needs
When crafting an estate plan, you need to consider every possibility, no matter how remote. And when life-altering events occur while you’re still living, you should update your will accordingly to ensure your true final wishes are met to the letter.
Therefore, you likely need the help of a skilled West Michigan estate lawyer like those as Law Offices of Kari Santana. Our knowledgeable staff has years of experience assisting people just like you in creating comprehensive estate plans that are tailored for your unique needs and ensure the seamless transition of your finances, assets, and properties after you’re gone.
To schedule your free consultation, please call (616) 717-5759 today or complete the brief form below.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.