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What happens if a beneficiary of a will is deceased?

Discover what happens when a beneficiary of a will is deceased.

What happens if someone named in a will dies? The answer depends on when they die – before the person who made the will, after their death or while probate is still in progress. It also depends on any survivorship clauses or substitute beneficiaries in the will. These details decide whether the gift fails, passes to the family or becomes part of the beneficiary’s own estate.

Key takeaways

Timing is key. The rules change if the beneficiary dies before the testator, after death, or during probate.
Clauses can change the outcome. Survivorship clauses and substitute beneficiaries can stop gifts from failing.
Plan ahead to avoid disputes. Naming substitutes and adding clear clauses can prevent confusion and legal challenges later.
Testator: A testator is a person who makes a will. It refers to the individual who sets out how their assets, property, and responsibilities should be handled and distributed after their death.

What happens if a beneficiary dies before the testator?

If a beneficiary dies before the person who made the will (the testator), their gift may fails. This is called the lapse rule. When a gift lapses and there are no substitute clauses, it goes into the residuary estate. If there is no residuary estate , or if the beneficiary who died was one of, or the sole residuary beneficiary, it is shared under intestacy rules.

There is one key exception. Under Section 33 of the Wills Act 1837, if the beneficiary is a child or grandchild and they leave descendants, the gift passes to those descendants instead of lapsing, unless the will says otherwise.

What happens if a beneficiary dies after the deceased?

If a beneficiary dies after receiving their inheritance, the money or property becomes part of their estate. Because it now belongs to them, it will be passed on under their will. If they don’t have a will, the rules of intestacy determine who gets it.

What happens if a beneficiary dies during probate?

If a beneficiary dies before getting their inheritance and while probate is still underway, their share becomes part of their own estate. It will then be passed on under their will. If they don’t have a will, the intestacy rules apply.

Example: A grandfather dies and leaves 50% of his estate to his son. If the son dies during probate, that 50% share goes into the son’s estate.

If the son’s estate needs probate, the person handling it must include the value of the inheritance. This amount is then shown on the inheritance tax forms for the son’s estate.

Explore how to apply for probate in our guide.

What if the will includes a survivorship clause?

Some wills include a survivorship clause. This means a beneficiary must live for a set time after the testator’s death to inherit. The period is usually around 28 days. If the beneficiary dies within this time, the gift fails as if the beneficiary had died before the testator.

People often add this clause to avoid two probate processes in quick succession. It also provides some control over where assets end up, although only slightly, as the period is usually no more than a month.

Signature, insurance or legal black woman with senior planning on documents for contract, loan or agreement. Lawyer, financial advisor and consulting with elderly for retirement deal will review — Image credit: Shutterstock/ PeopleImages.com - Yuri A

Can a will name substitute beneficiaries?

A will can name substitute beneficiaries – and it’s a good idea. This ensures your estate is shared as you want if your main beneficiaries die or cannot inherit.

Here’s how it works:

For specific gifts, like cash lump sums, property or a family heirloom, you can name a substitute to receive the item if the main beneficiary can’t.
For the residue of your estate, you can name a substitute to get what’s left after specific gifts are given out if your main beneficiary can’t receive it.

Example: Your will might say, “I leave the residue of my estate to my son Jack. If he doesn’t survive me, I leave the residue of my estate to my nephew Ben.”

If you don’t name substitutes, the gift may fall into the residue of your estate if the beneficiary dies and isn’t your direct descendant. It could then be given out in a way you didn’t plan, or even under intestacy rules.

What happens if all beneficiaries of a will are dead?

Several things can happen if every beneficiary named in a will has died:

Rewrite the will. If the testator is still alive, they can update the will and name new beneficiaries. This avoids gifts lapsing and falling into the residuary estate.
Substitute beneficiaries. If the will names substitutes, assets go to them as planned.
Per stirpes distribution. A will can include a per stirpes clause. This means a beneficiary’s direct descendants (such as their children) inherit the share their parent would have received.
Intestacy rules. If there are no substitutes and no per stirpes clause, intestacy rules apply.
Bona vacantia. In rare cases, there may be no relatives entitled to inherit under intestacy rules. When this happens, the estate becomes bona vacantia and passes to the Crown.

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