When someone dies with a Last Will and Testament, their property is distributed in accordance with what the Will states. While preparing a Will can be a complicated and stressful process at the best of times, if not properly drafted, your wishes might not be realized when distribution of the Will occurs. For example, if a beneficiary under your Will has already died when distribution of your estate assets occurs, the issue of lapse will arise.
What is lapse?
Put simply, lapse is the term used in estate law to describe what happens when a Will grants money or property to someone who died before the testator (the person who wrote the Will). A lapse can happen for many reasons such as not having the time to update your Will to remove a deceased beneficiary. More often, a lapse results from not revising the Will it over time.
What happens when a provision in a Will lapses?
If a lapse has occurred, the money or property that would have gone to the deceased beneficiary instead falls into intestacy. In other words, the inheritance of the deceased beneficiary is treated as though it was never given to them. Thus, rather than the lapsed inheritance going to whoever it was intended for, it is distributed in accordance with the state intestacy statute:
For example, in N.Y.S.:
- The first $50,000 plus half of what remains goes to the spouse of the testator.
- The remainder is distributed among the testator’s children (or other family members, if they have no living children).
For reasons that should be obvious, very few people like it when a Will lapses (except, perhaps, the people who might suddenly find their inheritance significantly larger than they anticipated). Not only does a lapsed inheritance negate the testator’s wishes, but it can complicate the entire process of distributing the testator’s estate as the lapsed inheritance is evaluated by the Surrogate’s court. Fortunately, there are a few measures in place that prevent a lapse from occurring.
Preventing a lapse
Most states, including New York, have “anti-lapse” statutes that allow a dead heir’s children or other immediate family to inherit a lapsed inheritance on their behalf. While this is typically enough to at least prevent the property from falling into intestacy, this does not solve the issue of an inheritance going to someone who was not intended to benefit. Additionally, anti-lapse statutes typically only apply to specific people (the New York anti-lapse statute only covers children and siblings of the testator, for example), meaning there is still potential for problems to occur and unintended individuals to inherit your property.
This is why many people draft their Last Will and Testament to include what is known as a residuary clause. A residuary clause designates one or more people as a “residuary beneficiary,” who will receive any money or property not specifically allocated to someone else. This includes any property that would otherwise lapse into intestacy, due to the intended beneficiary being deceased. While this is not a perfect solution, it at least avoids many of the legal complications that can arise when a lapse occurs.
Whether for yourself or on behalf of a loved one, planning an estate and handling elder law matters can be overwhelming and emotionally taxing. The legal professionals at Hobson-Williams P.C. will advise you on the options available to you and help you establish a plan that best suits your needs. Call (718) 210-4744 or visit our contact page to speak to one of our attorneys and learn how Hobson-Williams P.C. can help you gain the peace of mind that comes with being prepared for the future.