What If a Beneficiary Dies Before Receiving His Inheritance?
Have you ever wondered what would happen if a person who was to receive a deceased’s inheritance is no longer alive?
The person who was to receive the inheritance is commonly known as a beneficiary. On the other hand, the total property owned by a deceased person is often referred to as the estate.
Where the deceased had written a will, the assets in his estate would be distributed according to the instructions in the will.
There are different types of gifts that the deceased may bequest in his will. The following types will be discussed in this article:
- Specific gift, where the bequest is a specific item or a specific amount of money; and
- Residuary gift, which refers to the remaining estate after deducting all debts, bills and taxes, as well as after distributing all the other types of gifts accordingly. A residuary gift can be bequeathed to a specific person or more than 1 person, or to a class of people, in any proportion as preferred by the testator.
If there is no will, the distribution of the deceased’s assets would follow the rules in the Intestate Succession Act.
Where the Beneficiary Dies Before the Deceased
If the Deceased had Left a Will
This situation may occur where the testator (i.e. the person making the will) was unaware of the beneficiary’s death, or was mentally and/or physically incapable of updating his will after the beneficiary had passed away.
The starting point is that a beneficiary has to survive the testator in order to receive his inheritance from the testator’s estate. If a beneficiary dies before the testator, the specific gift that had been willed to the beneficiary would lapse.
As a result, if the will does not provide for an alternative beneficiary (see below) who should receive the gift instead, this lapsed specific gift for the deceased beneficiary would remain part of the testator’s estate as residuary property.
Such residuary property will then be split according to the testator’s instructions on how his residuary property should be distributed.
For example, if the testator’s will states that his residuary property is to be distributed equally among the testator’s children, then the lapsed specific gift will be equally distributed among the testator’s children, together with the rest of the residuary property in the testator’s estate.
However, if a residuary gift lapses, for example because the beneficiary of the residuary gift passed away before the testator, then it would be subject to the intestate laws if the testator had not specified an alternative beneficiary for his residuary property.
How to Include Alternative Beneficiaries in a Will
If the first beneficiary-of-choice does not survive the testator, the testator has an option of including alternative beneficiaries in his will via the use of “per stirpes” and “per capita” clauses.
Both “per stirpes” and “per capita” provisions would ascertain that the portion of the estate is given to the intended beneficiaries, and does not lapse and become residuary property. Choosing which provision to use is dependent on what the testator wishes for his beneficiaries.
Including a “Per Stirpes” Provision in the Will
If the beneficiary has passed away before the testator, a “per stirpes” provision in the will would ensure that the specific gift is inherited by that beneficiary’s children.
A “per stirpes” provision enables a deceased beneficiary’s living descendants to inherit the deceased beneficiary’s gift by right of representation.
For example, if a testator wants to bequeath 10% of his estate to X, a “per stirpes” provision could then be that:
“If X does not survive me, I give 10% of my estate to X’s living descendants, per stirpes”.
Then if X has 3 living descendants, the testator’s gift of 10% of his estate to X would not fail if X were to pass away before the testator. Instead, the gift will be equally divided among all of X’s 3 living descendants.
As a result, each of X’s living descendants would receive one-third of the 10% that X was supposed to receive.
Including a “Per Capita” Provision in the Will
Apart from “per stirpes”, a “per capita” provision may be included instead. A “per capita” distribution refers to distribution according to the current living beneficiaries.
It ensures that the deceased beneficiary’s share is returned to the estate and shared among the remaining living beneficiaries instead of lapsing and becoming part of the residuary property.
For example, if the testator has bequeathed 50% of his estate per capita to his 7 children, each of them would receive 1/7 of the 50%. However, if one of the children does not survive the testator, then other 6 children would receive 1/6 of the 50%.
Special Case: If the Beneficiary is a Child Who Dies Before the Testator
As discussed above, the general rule is that gifts to beneficiaries who have passed away before the testator will lapse. However if the deceased beneficiary is the testator’s child, then the gift to that beneficiary would not lapse if section 26 of the Wills Act applies.
This section states that the gift would take effect as if the death of the child took place immediately after the death of the testator. As a result, the gift would continue as a gift to the deceased child.
However, section 26 of the Wills Act may not be applicable if there are provisions in the will that suggest that the testator intended for an outcome different from what is provided by that section.
Depending on how such provisions are drafted, these provisions can include provisions for alternative beneficiaries, or survivorship clauses.
A survivorship clause states the minimum period which a beneficiary would have to live for after the testator’s death (i.e “survives” the testator) to receive his inheritance from the testator’s estate.
The survivorship period may range from as short as 1 day to as long as 6 months.
An example of a survivorship clause that could cause section 26 of the Wills Act to become inapplicable would be:
“None of the gifts in my will will take effect unless the beneficiaries survive me for a period of 1 month…”
In such a situation, the testator has intended that his beneficiaries must survive him by at least 30 days before they are entitled to receive their inheritance under the will.
Accordingly, if the testator’s children do not survive the testator by at least 30 days (e.g. because they have passed away before him), the testator did not intend for them to receive any inheritance that they were initially entitled to.
This outcome is different from the outcome as provided for by section 26 of the Wills Act, which is that the testator’s deceased children would still be entitled to their inheritance.
This is because under section 26 of the Wills Act, the children should be taken to have passed away after the testator and not before him, such that they would be able to receive their inheritance.
As a result, this survivorship clause may cause section 26 of the Wills Act to become inapplicable.
If the Deceased Had Not Left a Will
If a beneficiary dies before the deceased and there is no will, the rules for distribution under intestate law would apply.
You can read more about these rules of distribution here. In general, beneficiaries who have passed away before the deceased person are not entitled to a share of the deceased’s estate under intestate law.
Where the Beneficiary Dies After the Deceased but Before Receiving the Inheritance
This situation could arise:
- In cases where the beneficiary is an aged spouse, who may not outlive the probate process (i.e. distribution of the deceased’s assets);
- Where the beneficiary suffers a sudden death by accident or medical issues after the deceased’s death; or
- In a simultaneous death situation. For example, both the deceased and the beneficiary meet with an accident. If, the evidence is unclear on who died first, and the deceased is older than the beneficiary, it will be presumed that the beneficiary died shortly after the deceased.
The starting point is that if a beneficiary survives the deceased, the beneficiary would be entitled to his gift, even if he dies during the probate process (i.e. distribution of the deceased’s assets).
This is regardless of whether the beneficiary was entitled to the gift under the deceased’s will or Singapore’s intestacy laws.
The rationale is that upon the death of the deceased, the beneficiary becomes the owner of any gift that he is entitled to from the deceased.
Thus, even if the beneficiary were to die thereafter, the gift generally becomes part of the deceased beneficiary’s estate and would then be distributed as part of his estate.
However, this general rule on the deceased beneficiary’s entitlement to the gift may not apply, depending on what the will of the deceased says (if the deceased had left a will).
For example, the will may contain a survivorship clause (see above) requiring a beneficiary to survive the testator for a certain number of days before he will be entitled to his inheritance.
As seen above, what happens if a beneficiary dies before receiving his inheritance is dependent on a variety of factors, such as whether the deceased had left a will, whether the deceased’s will had provided for alternative beneficiaries, and whether the beneficiary had died before or after the testator.
As there is no limit to the contingency situations that may occur, you may want to consult our wills lawyers for advice on providing for these situations in your will.
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