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Thursday, February 3, 2022

What Happens If Your Primary Beneficiary Dies?

It is great to have an estate plan in place. An estate plan is an important step towards protecting your wishes for yourself, your loved ones, and your assets you have spent a lifetime acquiring. An estate plan puts protections in place in the face of an otherwise uncertain future. While we can never plan for every future contingency or possibility, an estate plan can help cover a number of basis. That is why the most solid estate plans considers future possibilities and provides protections as best as possible. For instance, a strong estate plan would not only name beneficiaries who will inherit from a person’s estate upon their death, but would also provide a contingency plan in the event that a primary beneficiary predeceased the person from whose estate they would have inherited from. What can happen when a primary beneficiary dies? Let’s take a look at some of those possibilities here.

What Happens If Your Primary Beneficiary Dies?

A beneficiary is a person who is named in an estate plan of someone else and will receive an inheritance upon the other person’s passing. Naming beneficiaries is a key component of an estate plan as one of the central purposes of an estate plan is to see to it that a person’s assets are properly distributed according to their wishes after they die. In a strong estate plan, there will even be more than one type of beneficiary included. There will be primary beneficiaries, those individuals first in line to inherit from an estate plan. There should also be contingent beneficiaries who will inherit in the event that the primary beneficiary dies before the creator of the estate plan does.

In addition to or in the alternative to a contingency beneficiary designation, you can add a provision to your estate plan that will dictate whether a primary beneficiary’s intended inheritance will “lapse” or pass “per stirpes” if the beneficiary passes away before the creator of the estate plan. Should the inheritance lapse, this means that the inheritance that was meant to go to a named beneficiary will no longer have any effect if the beneficiary passes away prior to the creator of the estate plan. Should an inheritance be designated as passing “per stirpes,” this means that, in the event of a beneficiary passing away before the estate plan’s creator, the inheritance of that deceased beneficiary should pass to their descendants evenly. This means that the beneficiary’s children would likely be the ones to receive the inheritance in equal shares.

Through the naming of contingent beneficiaries and using lapse and per stirpes language in your estate plan, you are safeguarding against many of the curveballs life can throw our way. Of course, we always want to plan for our primary beneficiary to survive us. It is also a good idea to make alternate plans as well.

Elder Law Attorneys

If you want a strong estate plan in place, Merlino & Gonzalez is here to help. Contact us today.


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