Even when the probate of an estate goes as planned, it can still be a complicated and confusing process for those who are unfamiliar with the process. When there is a hitch in the process, it can be even more confusing for everyone involved. For instance, what happens if a beneficiary of the estate dies during the probate process? Warren probate lawyer at Augulis Law Firm explains what happens to the inheritance of a beneficiary who dies during probate.
What Is Supposed to Happen during the Probate of an Estate?
If a loved one recently passed away, you probably don’t want to focus on the legal ramifications of his/her death; however, the law requires someone to do so. Specifically, the decedent’s estate must generally go through the legal process known as “probate.” If you have never before been involved in the probate of an estate, it can sound like a daunting process – and sometimes it is a daunting process. Nevertheless, the law requires the assets that make up the decedent’s estate to be accounted for and ultimately passed down to the intended beneficiaries or heirs of the estate. Before assets are transferred out of the estate, however, debts of the estate – including gift and estate taxes — must be paid. This all takes place during the probate process which typically begins shortly after a death.
If a Beneficiary Dies, How Does that Affect the Probate of the Estate?
One of the first things that occurs during the probate of an estate is identifying the beneficiaries of the estate if the decedent left behind a Last Will and Testament. It isn’t until the very end of the process, however, that the beneficiaries will receive their inheritance – and a lot can happen in the meantime. Probating even a relatively modest estate without complex assets can often take several months while an estate with high value and/or complex assets can take years to probate. Given the length of time it can take to get through the probate process it is possible for a beneficiary to die before the end of the process. If that does happen, what happens to the inheritance that was earmarked for the deceased beneficiary?
The General Rule
Like most legal questions, the answer to this one has a general rule – and then exceptions to that general rule. The general rule is that if a beneficiary dies during probate but prior to the point at which assets have been transferred into his/her name, those assets become part of the deceased beneficiary’s estate. By way of illustration, imagine that your grandmother passed away and left all 10 of her grandchildren $25,000 each. Sadly, your cousin Mark (one of the grandchildren) dies a couple of months after your grandmother. Mark’s death occurs before his inheritance was officially transferred to him. In that case, Mark’s $25,000 inheritance would become part of Mark’s estate. Consequently, that the $25,000 would ultimately be inherited by whoever Mark named as the beneficiaries of his estate in his Will or trust. In the alternative, the property would go to Mark’s legal heirs if he died intestate (without a Will.)
Exceptions to the General Rule
Most rules have exceptions. In this case, there are two important exceptions to the basic rule regarding the death of a beneficiary prior to the completion of probate. Both exceptions only potentially apply if the beneficiary died shortly after, or at the same time as, the decedent. In that case, the terms of the decedent’s Will might dictate that the assets pass to a different beneficiary. It is somewhat common to include language is a Will that requires a beneficiary to live for a designated time after the death of the Testator.
In our example above, assume the same fact pattern, except let’s imagine that your grandmother was fatally injured in a motor vehicle collision and that Mark was in the car with her when the crash occurred. Moreover, assume that Mark died shortly after your grandmother. The terms of your grandmother’s Will might dictate that a beneficiary must survive her by a specific amount of time (such as 72 hours) in order to inherit from her estate. If Mark did not live long enough, the $25,000 will not become part of his estate. Instead, it will pass to whoever is next in line according to the terms of your grandmother’s Will.
The second exception involves the same fact pattern except your grandmother’s Will is silent on the issue of how long a beneficiary must survive in order to inherit. In that case, state law may fill in the blanks. Sometimes state law requires a beneficiary to survive for a specific period of time in order to inherit from a decedent. In that case, the inheritance will also revert back to your grandmother’s estate and pass to whoever is next in line according to the terms of her Will or whoever inherits under the state’s intestate succession laws if there is no Will.
Contact a Warren Probate Lawyer
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about what happens during the probate of an estate, contact an experienced South Plainfield probate lawyer at Augulis Law Firm by calling 908-222-8803 to schedule your appointment today.