What Happens to Gifts if Beneficiaries Pass Away Before the Testator?
The anti-lapse statute is a Florida law designed to address the lack of contingency planning in Wills. What happens to a gift left for a beneficiary in your will if that person predeceases you? How does Florida’s anti-lapse statute handle the gifts left for beneficiaries who have passed away?
What Happens to Gifts if the Beneficiary Predeceases the Testator?
When naming beneficiaries in estate planning documents, the testator assumes that they will outlive them. Otherwise, it would not make much sense to leave assets or gifts for those who are expected or likely to die before you.
However, often, testators live longer than the beneficiaries named in their will. Some testators do not think about their wills for decades, while others ignore the importance of updating their estate planning documents.
But what happens to the gifts and assets if you outlive the beneficiaries named in the will? If a beneficiary passed away before the testator, the specific gift returns into the residuary estate of the testator rather than the estate of the deceased beneficiary. The concept is known as “lapse.”
What happens next? When the gift falls back to the residuary estate, it is likely to go to another beneficiary named in the will. If all the beneficiaries named in the will die before the testator, intestate succession rules will be applied to the estate.
How Does Florida’s Anti-Lapse Statute Work?
The problem with “lapsed” gifts, however, is that the testator may want the deceased’s spouse or child to inherit the specific gift, something that would happen if the inherited asset ended up in the estate of the deceased person.
Under the concept of “lapse” in Florida, the gift would be reverted into the residuary estate. To avoid this unwanted result, Florida has what is called an anti-lapse statute, which ensures that the gifts go to the predeceased beneficiary’s descendants rather than lapsing.
Florida’s anti-lapse statute only applies to immediate family members. In other words, friends, in-laws, and neighbors would not benefit from the statute. In other words, gifts to friends, in-laws, distant family members, and neighbors would not go to their descendants. Instead, they would be reverted back into the testator’s estate.
How to Bypass the Anti-Lapse Statute in Florida?
However, many wills contain a provision that dictates what should happen to the residual property. For example, the testator may choose to transfer residual property into a trust or give it all to another beneficiary. If there is no such provision, the intestate succession would apply or may lead to probate litigation.
A testator can bypass the anti-lapse statute by naming a “substitute beneficiary” who would inherit any property that could not be passed on to the intended beneficiary (e.g., in the event of the intended beneficiary’s death).
Because Florida’s estate planning laws can be somewhat unpredictable, it is advised to let a St. Petersburg estate planning attorney review your will and/or help with drafting documents to make sure that your assets are inherited by beneficiaries or their descendants according to your wishes. Contact Legacy Protection Lawyers, LLP, to discuss how the anti-lapse statute may affect your will. Call at 727-471-5868 to evaluate your case.