Death of a Beneficiary in Coral Gables

Most people create an estate plan with the expectation that it will allow them to transfer their hard-earned wealth to their heirs after they pass away. However, things can become complicated when a beneficiary dies before the Will or trust can be administered. The death of a beneficiary in Coral Gables can upend the grantor’s final wishes and lead to unexpected costs.

Thankfully, there are steps you can take when creating an estate plan to address this issue. You may be able to provide contingency plans that ensure your final wishes are met.

Determining What Happens When a Beneficiary Dies

The death of a beneficiary in a Will means the assets intended for them go to someone else named as a successor, or they may return to the estate as intestate property.

If you created a trust, the terms of the trust will determine what happens when a beneficiary dies. Most trusts have contingency plans, not only for the death of a beneficiary, but for trustees as well. One of the major benefits of relying on a trust as part of your estate plan is that it offers substantial flexibility. Because of the wide range of potential outcomes, it is vital to carefully review the terms of the trust before assuming what might come next after a beneficiary dies.

One common contingency plan is for the trust document to specify that the assets are to be split among any surviving beneficiaries in cases where one of them passes away. For example, if there are three beneficiaries and one of them passes away, the trust would be split between the two who remain.

More often than not, trusts highlight successor beneficiaries. This is especially common in cases where there was only one beneficiary to begin with. You could identify the primary beneficiary, as well as another party that will be entitled to the assets only if the original beneficiary dies.

The Anti-Lapse Statute for Gifts

Florida also has an Anti-Lapse Statute, which applies to gifts to descendants (not friends or other family members). If the named beneficiary has died by the time the gift is to be distributed, it goes to the beneficiary’s descendants instead of going back into the estate.

Talk to a Coral Gables Attorney About the Death of a Beneficiary

While the death of a beneficiary in Coral Gables may cause some complications, most trusts or Wills include contingency plans. By naming successor beneficiaries, you can avoid a lapse and your final wishes will be carried out even if your original beneficiary passes away.

If you are looking for assistance with this aspect of creating your estate plan, our attorneys are here to help. Reach out as soon as possible to begin discussions about the potential loss of a beneficiary.