What if a beneficiary of my Will dies before me?
Share this article...
It is important that your will states what happens if a beneficiary dies before you.
Unless your Will covers off this scenario, then the following applies:-
- Cash legacies – these will simply ‘fail’ and fall into the residuary estate ‘pot’
- Residuary estate – this is where the problems start! If a residuary beneficiary dies before you without your will defining what happens, then that bit of your estate will be deemed to be a partial ‘intestacy’, and so the law will decide who gets it – not you
Fixed Cash Legacy – beneficiary dies before Testator
Cash legacies are fixed sums typically used as token gestures, and NOT to deal with the bulk of an estate (residuary estate).
If the beneficiary of a fixed cash legacy dies before the person who made the will (the ‘Testator’), then that fixed legacy simply fails and the sum passes into the residuary estate.
Residuary beneficiary dies before deceased
If the will does not make provision to cover this off, then that share of the estate will fail, and then pass by the rules of intestacy. This is a list of family members who benefit where there is no will. If there is just one residuary beneficiary, the whole estate will be deemed to be an intestacy. If it is just part of the estate, then is sometimes called a ‘partial intestacy’.
> Learn how the rules of intestacy work
How do I make alternative provisions in my will for a deceased beneficiary?
There are a number of ways of avoiding the problem of a residuary estate gift failing. Things to consider include:-
- Joint gifts – ie made ‘equally’ to a number of beneficiaries
- Accruer clauses – which deal with alternative provisions if one or more named beneficiary has died where the gift of residue isn’t a simple ‘everything equal’ (as above)
- Per Stirpes – this is a specific provision to provide for the children of a deceased beneficiary to benefit in place of their parent. The per stirpes can be used as well as joint gifts and or accruer clauses
- Backstop provisions – also sometimes referred to as a disaster scenario.
Joint gifts of Residuary Estate
This works like a joint tenancy in conveyancing terms. So, if one (or more) of the residuary beneficiaries dies before the testator, their share will simply pass to the other surviving beneficiaries. You could expect this sort of clause to look something like this:-
I GIVE my estate in equal shares to those of my children living at the date of my death or to the survivor of them absolutely
So, if there were say 3 children and all were alive at date of death, they would each get a 1/3rd share. If one died, the surviving 2 would get ½ each. And if there were just one child surviving, they would get everything. If they had all died before the death of the parent, then an intestacy would arise. However long the odds are, this is where a backstop provision or disaster clause is worth having – this might be to remoter family, or often charities are chosen.
It is possible for an equal shares of residue to be drafted with specified equal percentage amounts (See below accruer clause). This would be instead of simply wording it as ‘in equal shares too….). If the equal amounts are listed out (as below) it is imperative to specify that it is actually akin to a joint tenancy by some form or wording that clarifies that. The accrue clause can be used even if the shares are equal.
These are needed where there is not a ‘joint tenancy’ type scenario (but rather a ‘tenancy in common’). So, perhaps there are unequal shares to various people? In this scenario, an accrue clause makes provision to, in effect, create an unequal ‘joint tenancy’ whereby the surviving beneficiaries take a proportional share of the gift that failed. An accruer clause might look something like this:-
I GIVE my estate as follows:-
- 50% to my brother STAN SMITH
- 23% to my friend MARGARET THATCHER
- 12% to my uncle TOM COBBLEY
- 15% to the RNLI
AND I DIRECT that if any of the gifts at (a) to (d) above fail they will be added proportionally to the gift(s) that do not fail
The accruer bit is the last section starting with ‘AND I DIRECT’.
As above, the accruer clause can be used even if shares are equal if the will is drafted with specified equal shares as above (given that that drafting suggests a ‘tenancy in common’ without an automatic reversion to the other residuary beneficiaries).
Your estate might be fully or partially ‘intestate’ if your will fails to cover this off.
Per Stirpes Provisions
Per stirpes is a Latin phrase meaning ‘by roots’ – ie meaning through the generations. So, if we return to the joint gift with 3 children, if we were to introduce a per stirpes provision, it would look something like this:-
I GIVE my estate in equal shares to those of my children living at the date of my death or to the survivor of them absolutely PROVIDED ALWAYS that is any of my children die before me leaving children of their own, then those children will take, and if more than one in equal shares the share of estate that their deceased would otherwise have taken
So, having included this, in the previous scenario if one child dies but leaves grandchildren (of the testator), the grandchildren will take their parents 1/3rd share, and the surviving 2 children take 1/3rd each as before. If the deceased child left no children, this clause is benign and the surviving 2 children take ½ each.
Back stop Provisions
Come what may, and however unlikely it is to be needed, it is always good to think about including a backstop provision. This covers off a situation where all principle beneficiaries have died.
Typically, testators might include more distant family members at this stage, or charities. Particular care should be taken in mirror wills – to ensure this clause does not absorb the whole estate eg of a married couple who die together, and then pass via the will of the younger spouse.
> Read more about substitute provisions in our guide to mirror wills
What if the beneficiary dies after Testator?
All of the above assumes that the beneficiary in question dies BEFORE the testator. An alternative of course is that the beneficiary dies after the testator but before receiving their inheritance.
Where there is the death of a beneficiary before distribution, any amounts due would be paid to the estate of the beneficiary in question, and then pass via the terms of their will.
Share this article...
More on this topic