What Happens if a Beneficiary Is Deceased?

What Happens if a Beneficiary Is Deceased?
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Several methods exist to handle a probate will when a beneficiary is deceased. In some circumstances what the will says will determine the distribution of the beneficiaries’ share, while in others the state may have a statute in place to handle this type of situation. If you are an heir of the deceased beneficiary, you should consult a local attorney regarding your rights.


When a person dies all of their property goes into a probate proceeding. Probate itemizes all the assets of the decedent, resolves all the debts; pays the taxes and distributes the assets. These functions are handled by the executor of the will, who is usually named in the will and confirmed by the court. One of the jobs of the executor is to ensure that items are distributed to the proper beneficiaries, which can be a challenge when one of the beneficiaries dies before the completion of probate.


A beneficiary is a person who inherits either real or personal property under a will. Real property can include raw land without any structures up to the family home, while personal property can include art, jewelry, money or other items the decedent found valuable and wanted to leave to the beneficiary. To receive a distribution, a beneficiary must be alive. It is when the beneficiary dies, that there may be a problem with the distribution that requires a careful reading of the will.


Some decedents may provide alternate arrangements for this situation within their will. The will may designate that the deceased beneficiary's share is void, and the share gets put back into the estate for the other beneficiaries to share. Another will may state that if the beneficiary is deceased before her share is delivered, than the share goes to the estate of the beneficiary to be distributed to her heirs; another will may just name a different beneficiary for the item.


Each state can have its own method of handling the shares of a deceased beneficiary if the will does not provide for the distribution. Some states may determine that if the beneficiary was alive when the decedent died, her estate is entitled to the items left in the will. Another state statute may state if the beneficiary is not alive when the distribution occurs, then the beneficiary's share lapses and returns to the estate. A lapsed share is one that no longer exists.