Estate planning is where you can carefully select beneficiaries to inherit your property. But what happens if a named beneficiary passes away before you? Although not a positive thought, this occasionally happens.
When your named beneficiary in the will predeceases you (the testator), the gift to that beneficiary typically “lapses.” This means their designation is no longer valid. Texas has anti-lapse laws to prevent this from automatically leaving the asset without an intended recipient.
Who gets the inheritance?
The outcome depends on two key factors:
- Descendants as beneficiaries: If the deceased beneficiary is a descendant of yours (child, grandchild etc.), their share will pass down to their living descendants (their children, for example). This ensures the gift stays within your family lineage, even if the original beneficiary is gone.
- Nondescendant beneficiaries and residuary clause: If the beneficiary is not a descendant, the disposition of the lapsed gift depends on your will. Most will contain a residuary clause, which designates who inherits anything not specifically mentioned elsewhere in the document. If the will is silent on the matter, the lapsed gift becomes part of the residuary estate, going to the beneficiaries named in that clause.
There is an exception: class gifts. These are gifts designated to a group of people, like “to all my grandchildren.” If a member of the class predeceases you, their share does not go to their descendants. Instead, the remaining members of the class simply inherit theirs unless the will says otherwise.
These are the general rules, but legal intricacies can exist. A well-drafted will can provide clarity and avoid confusion.
Updating your will while there is still time and options
It is crucial to have your will reviewed by an attorney concentrating on estate planning, especially if your family situation is complex (blended families, adopted children etc.), you have specific wishes for the distribution of lapsed gifts and your assets include nonprobate assets with designated beneficiaries (life insurance and retirement accounts). This way, you can achieve peace of mind knowing your loved ones are cared for, even if the unexpected occurs.