Can You Change Beneficiaries If They Passed Away Before You Do?
When people think of wills and asset payouts, people often assume that it is done so when the will owner passed away. They will think everything will go smoothly, and that the beneficiaries will inherit the assets accordingly. Most times payouts are pretty straightforward and have very little problems.
What if a beneficiary passed away before the will owner does? Or the fact that shortly after the will owner passed away, the beneficiaries passed away too? The circumstances may vary but the question remains. What will happen to the deceased beneficiary’s portion when he or she passes away?
In this article, we will cover how the deceased beneficiaries’ portions will be handled if they are to pass away before the will owner does.
How Do You Include Alternative Beneficiaries In Your Will?
Typically in a will you are allowed to name multiple beneficiaries up to a certain number of people. It can be your immediate families and relatives, or you can also include close family friends. Sometimes, some people decide to name an organization as their beneficiary.
If one of the beneficiaries passed away before the will owner does, the will owner can still award the deceased beneficiaries’ beneficiaries a portion of the assets and monies. The will owner can include alternative beneficiaries by using the “per stripes” and “per capita” clauses.
By including the “per stripes” and “per capita” clauses, the will can ascertain that the deceased beneficiary’s portion of assets be given to his/her beneficiaries. The same clause will also make sure that it will not lapse and become residuary property.
“Per Stripes” vs “Per Capita”: What Is The Difference?
“Per stripes” allows a deceased beneficiary’s living next-of-kin to inherit the beneficiaries’ gift by right of representation. If the deceased beneficiary was promised 10% of the will owner’s assets, then they will get it. If the deceased beneficiary’s named next-of-kin is just 1 person, then the person will get the entire 10%. If there are 3 of them, then it will be the 10% divided among the 3 representatives.
“Per capita” means distribution according to the current living beneficiaries. It means that when the beneficiary passes away, whatever he was promised will be returned to the will owner when he/she passes away. It’s to prevent any lapsing or having the property becoming a residuary property.
If Named Beneficiary is a Child (Under 18 years of Age) Who Dies Early
We fully understood that if any beneficiary dies before the will owner does, the money can either go to the beneficiary or be returned to the will owner. According to section 26 of the Wills Act, if the named beneficiary is a child and passes away, then the gift to the named child will not lapse.
However there are survivorship clauses that states there should be a minimum period where a beneficiary will have to live for after the will owner’s death. Only then will the beneficiary receive anything from the will.
Survivorship period can be anywhere from 1 day to 6 months. If the child is a named beneficiary, then the child will have to live for at least 30 days before being able to “receive anything”. But if the child dies after the 30 days period but before the will owner does, then it means that the will owner did not wish for them to receive anything from their will.
With that being said the deceased child is still intended as a beneficiary and receive anything from the will. This is because by logic, children is not likely to pass away before an adult does for obvious reasons. It’s if the child was not born sick or with any living death deformities. But there are cases where the child is born with illness and deformities, and they will still receive assets from the will owners if they are named beneficiaries.
Voided Portion of the Will
If let’s say there are no “per stripe” or “per capita” clause included in the will. One of the named beneficiaries passed away before the payout. That means, according to Section 19 of the Wills Act 1959, his portion of the estate will be voided due to death.
It can be included as part of the residuary estate and distributed according to the residuary estate clause.
However, there are cases where when the beneficiary has passed away, he/she will still get their portion of the payout. The payout will go to the beneficiary’s estate and part of his will. That means whatever the beneficiary has received posthumously will be passed on to their named beneficiaries in their will. If there is no will left behind, the assets and monies will be distributed according to the distribution act.
Beneficiaries who have passed away before the will owner does can still receive their portion of the monies and assets. It all depends on the particulars in the will.