What happens if a beneficiary of a will is deceased?
Discover what happens when 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.
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.
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.
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.
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.
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:
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.
Several things can happen if every beneficiary named in a will has died:
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