Lapsed Gifts And Substitute Beneficiaries

Despite well laid plans, sometimes a person named in a will dies before the testator (the person who bequeaths his property in the will) and is no longer able to inherit under the terms of the will. When this happens, the testator can change his will to name another beneficiary of the deceased person’s estate. What happens if the testator forgets to do this, or is unable to do this before his own death?

Under Florida law, when the testator dies and leaves property to someone who can no longer legally inherit it, the gift is said to lapse. When the gift lapses, it means that the gift goes back into the testator’s estate, and that lapsed property is divided as though the testator did not have a will at the time of his death.

Florida has an anti-lapse statute that is supposed to apply in situations where gifts to certain family members would otherwise lapse. Under the anti-lapse statute, a gift to a beneficiary who is a grandparent of the testator or a descendant of the testator’s grandparents does not lapse if the beneficiary dies before the testator. If this happens, the gift that was supposed to go to the beneficiary goes to the deceased beneficiary’s descendants. So the gift could go to the children or grandchildren of the deceased beneficiary named in the will.

Unfortunately, the anti-lapse statute does not apply to all groups or classes of beneficiaries. Gifts to friends or distant family members do not go to the descendants, but rather go back into the testator’s estate. If the will has a provision for what is to happen to residual property, such as transferring it into a trust or giving it all to another beneficiary, the property may be disposed of under those terms. Otherwise, intestate succession would apply. The anti-lapse statute can be avoided by naming a substitute beneficiary, who would inherit any property that would not be able to be passed on to the intended beneficiary.

A beneficiary cannot make his or her own will bequeathing property that he has not inherited yet, but that he hopes to one day inherit. An inheritance, even one a person is sure of receiving, does not become the beneficiary’s property until after the beneficiary inherits it. The beneficiary cannot therefore try to work around the lapse problem by writing his own will bequeathing the property he will inherit in the future to his own chosen beneficiaries. However, depending on how the anti-lapse statute is applied, a predeceased beneficiary’s heirs may still end up inheriting the property.

Contact an Experienced Estate Planning Attorney

Although it is not possible to anticipate all issues that will arise when it comes to will contests, a carefully drafted will should be able to withstand contest and provide for alternate disposition of property in keeping with the testator’s wishes. For general estate planning advice and for a consultation on your specific needs, call an experienced estate planning attorney from the Millhorn Elder Law Planning Group located in The Villages, Florida.

Resource:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0732/Sections/0732.603.html