An estate plan that is not regularly updated can result in one or more of the beneficiaries under a passing away before the testator. In that situation, any property bequeathed to the beneficiary is at risk of being distributed in a manner that is not in line with the testator’s wishes. Bequeathed gifts that fail due to the beneficiary predeceasing the testator are known as lapsed gifts.
In some cases, the testator may have put a plan in place to handle situations created by lapsed gifts; usually by naming an alternate beneficiary in the will. If there is an alternate beneficiary named in the will, the property is passed on to that person without any change in the process. Michigan law also provides another approach to handling lapsed gifts through its anti-lapse statute.
Michigan’s anti-lapse statute allows a deceased beneficiary’s children to inherit property that was intended to be left to a beneficiary and instead became a lapsed gift. In order to inherit under the anti-lapse statute, the children must be grandchildren of the testator or otherwise descendants of the testator. In other situations, if there is no alternative beneficiary, the property is passed on to the residual beneficiary named in the will – the beneficiary who receives the remainder of the estate.
If there is an alternate beneficiary or group of beneficiaries named in the will to inherit in case of a lapsed gift, the language used by the testator to outline how lapsed gifts are to be passed on can make a huge difference. For example, if the testator makes a gift to a class of beneficiaries, it can limit any distribution to that class alone, and prohibit the property from being shared among the children of the class members if they are deceased when the testator dies. This is another reason why it is advisable to use an experienced attorney when drafting a will.
For example, a woman writes a will and includes a provision that all her property should go to her husband, and if he dies before her, the property should be shared among her two sons in equal share. This provision creates a situation in which if one of the sons and the husband die before the woman, and the woman makes no changes to her will, the surviving son would inherit everything. The children of the deceased son would not inherit under the anti-lapse statute. However, if the woman’s will names the sons individually, instead of using the term “my sons,” a court is likely to distribute the property that was originally intended for the husband between one son, and the children of the other deceased son, if any exist.
Contact an Experienced Estate Planning Attorney
Revising your will is very important in order to ensure that your wishes as to the distribution of your estate are followed after you pass away. If you want to make changes to a prior will, write a new will, or discuss other estate planning options, contact Resnick Law, P.C., to consult the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.
(image courtesy of Priscilla du Preez)