When creating an estate plan with the help of an estate planning lawyer in Orange County, you’ll be asked to choose the beneficiaries whom you want to inherit your money and property when you pass away. In most cases, our clients tell us that ultimately they want their life’s hard work to go toward the betterment of their children’s lives. Due to age differences, children will usually outlive their parents as well. But, what happens when a parent outlives a child? What becomes of the inheritance you wanted to pass on to him or her if the beneficiary dies before you do?
If You Don’t Have a Will or Trust…
The answer depends on what kind of estate planning you have (or have not) done so far. For example, if you don’t have a will or trust in place, then you are likely to have little say in what becomes of your assets upon your death. Instead, your estate will go into probate court, and the state of California will disseminate your assets based upon the law. The courts will determine your “heirs at law,” which it uses to give your assets to your closest blood relatives.
In this case, if your intended heir dies before you do, it won’t make much difference, as he or she just won’t be considered in the probate process. The court will simply distribute your estate to the blood relatives who are next in line under the law. The problem, of course, is that this result is arbitrary and one with which you might not be comfortable.
If You Have a Will or Trust…
If you have put together your will and/or trust, then you will have named beneficiaries. However, this is where the question of “what happens if my beneficiary dies before I do” really comes into play. If you survive one of your children or you both die simultaneously, then who gets his or her share when you die?
A related issue is if you have left an inheritance in a continuing trust for a beneficiary, is it clear who might inherit when your child dies after you? Will they be able to leave it to whom they want or will they be able to change whatever predetermined choice you made? For example, if you want a child’s inheritance to pass to any future grandchildren, can your child later amend that to be their spouse instead?
The best way to resolve this kind of question is to work with your estate planning attorney from the beginning to name contingent (or alternate) beneficiaries, and remote contingent beneficiaries, as well as to develop controls and mechanisms to respond to a variety of scenarios (from the possible to the unanticipated). Life is stranger than fiction, and a number of unanticipated events could occur which could easily lead to unintended results if there is a lack of proper planning. This way, if an initial beneficiary heir is unable to claim an inheritance, there is a clear plan in place for what should become of it no matter the situation.
It’s important to note that simply having a will or trust in place is not enough. The legal documents in your estate plan must contain the right provisions in order to work the way you wish and avoid probate court. Otherwise, your estate or at least that beneficiary’s portion will be subject to probate court and will be distributed according to the laws of succession as if you had no plan to begin with.
If you want a better understanding of what your will or trust says, how your estate plan will actually work, and to be sure that your plan accounts for all situations that may arise when it comes to distributing your estate, please feel free to call our estate planning law firm in Irvine at (949) 333-3702 to schedule an Estate Plan Review review with one of our lawyers.
