INTRODUCTION
When a person (Testator) signs a Will, he/she anticipate the persons named to receive a portion of their estate (Beneficiaries) will outlive them. So what happens if one or more Beneficiaries predecease the Testator? Or survives the Testator, but then passes before the bequest can be passed to him/her? The former issue is common as there is typically a considerable amount of time between the execution of a Will and the death of a Testator. The latter can also happen as estate administration may take many months, sometimes many years, if the estate is contested.
In the absence of specific guidance in the Will, the named beneficiary, or rather the Beneficiary’s estate or heirs, would not receive the bequest. For example, if Testator X left a bequest to his sister of $100,000, and his sister passed before him, she would be disinherited and instead, that $100,000 would be divided among the Beneficiaries of his estate designed to receive the remainder of his assets.
ANTI-LAPSE STATUTES
To remedy this, most states, including California (Cal Prob Code § 21109) and Hawai’i (HRS § 560:2-603), have passed anti-lapse statutes. The purpose of anti-lapse statutes is to accomplish what the Testator may have wanted given the unforeseen death of the Beneficiary. Rather than becoming disinherited, the bequest to a deceased beneficiary passes to his/her heirs.
EXCEPTIONS
The use of anti-lapse statues is limited. The deceased beneficiary must be a blood relative of the Testator, or the Testator’s spouse or domestic partner. Bequests to a friend would not survive.
A second exception is that the Will itself may contain language that indicates the anti-lapse statue should not be used. For example, if the Will contained a condition to the gift, such as, “…if he is living” or “if she shall survive me,” the deceased person’s heirs would not automatically receive the gift under the anti-lapse statute.
Also, the Will or state law may require the deceased beneficiary to survive for a certain period of time. This is commonly referred to as a “survivorship period.” For example, the Will may state that the deceased Beneficiary must survive the Testator for 30 days. Or state law might dictate that if it cannot be proven by clear and convincing evidence that the deceased Beneficiary outlived the Testator, the anti-lapse statue would not apply.
Finally, if the Will provides for a specific inheritance (or the entire estate) to pass to a group or “class” of people as a whole, the anti-lapse statute would not apply. For example, if the Will provided that the estate would pass to the Testator’s grandchildren, and one of the grandchildren predeceased the Testator, the estate would be apportioned among those who are still alive.
For example, each beneficiary would receive 25% if the decedent left his estate to his four children as class beneficiaries. The surviving beneficiaries would each receive 33.33% in the event that one of them died during probate.
PASSING DURING PROBATE ADMINISTATION
Unless provided otherwise in the Will, if a beneficiary survives the Testator but then dies before the estate can complete administration of the Will and disbursement of the property, the deceased beneficiary’s share of the estate typically becomes part of the deceased beneficiary’s estate. Note how this result is different if the deceased beneficiary has an estate plan. The anti-lapse statute provides that the bequest made for the deceased beneficiary to be apportioned according to intestate laws. However, if the deceased beneficiary survives the Testator, and has a Will that provided for a different apportionment, that will decide how the bequest is apportioned.
For example, an unmarried daughter has a Will and two children. In the Daughter’s Will, she apportions 75% of her estate to one child and 25% to the other child. The Daughter is designated in her Father’s Will to inherit $100,000. If she passes before her Father, both her children inherit $50,000. If the Daughter survives her Father, but passes before her Father’s estate can distribute his property, one child receives $25,000 and the other $75,000 of the inheritance from their grandfather.
Takeaway
Hopefully this article provides you with an appreciation of the complexity of drafting an estate plan. If you have not done so recently, consider reviewing your estate plan and make sure it complies with your legacy goals. Poorly drafted documents or changed conditions can result in unintended results. Contact CASHMAN LAW today for a free consultation to see how we might help you understand or execute an estate plan.
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