What Happens if a Beneficiary Dies?

senior couple

By Attorney Truman Scarborough


All of our beneficiaries (those who inherit our estates) will someday die. Not planning for what will happen if a beneficiary dies can have unexpected and costly consequences. Complications can arise with life insurance policies, payment on death (POD) accounts, transfer on death (TOD) accounts, wills, and trusts. In this article we will look at some of the problems that may be encountered when a beneficiary dies 1] before the person who is making the gift dies, 2] after the person making the gift dies but before receiving the gift, and 3] after receiving the gift.


1] If the beneficiary dies before the person making the gift: The law prohibits us from leaving property to a deceased person. When there are no named living beneficiaries, TOD and POD accounts as well as life insurance policies are paid to the decedent’s estate, requiring probate. While beneficiary designations can be updated if the beneficiary dies, we might forget. Therefore, it is best to plan for the possible death of the primary beneficiary by naming contingent beneficiaries.


With a will or trust a gift to a deceased beneficiary will lapse (go away) unless protected under Florida’s anti-lapse statutes (discussed below). When a specific gift (e.g. $10,000 or the home) lapses it becomes part of the residual estate (what is left after distributing specific bequests). If the lapsed gift is part of the residual estate, it goes back into the pot to be divided among the remaining residual beneficiaries. If there are no living beneficiaries, it goes to the decedent’s heirs at law. (These are the persons who would inherit under Florida Statutes when there is no will)


The Florida’s Probate and Trust Codes have anti-lapse provisions which provide that a gift will not lapse if the deceased beneficiary is a descendant of a grandparent. In that case, the gift goes to the deceased beneficiary’s lineal descendants: first to children and if a child has died to his/her children. However, rather than relying on Florida Law,   it is always best to specify who will receive a gift if the primary beneficiary dies.



2] If the beneficiary dies after the person making the gift but before distribution: If the beneficiary survives the person creating the will or trust but dies before receiving the gift, the gift is distributed to the deceased beneficiary’s probate estate. This will delay closing the primary estate until a probate estate is opened for the deceased beneficiary to receive the distribution. A way to avoid this is by having beneficiaries direct who will receive their inheritance should they die before distribution.

3] If the beneficiary dies after receiving distribution: Once a beneficiary has received the property it is his/her’s and will be part of his/her estate when he/she dies. But what if you do not want a child’s spouse to receive the money if your child dies first? A way to prevent this is to hold the child’s inheritance in trust for him/her and specify who will receive the balance upon the child’s demise. The problem is finding a trustee who will be there to distribute the funds to the beneficiary over his/her life time and then at the beneficiary’s demise distribute remaining funds to the final beneficiaries. A contingent trustee must be named in case the initial trustee dies before the beneficiary.


For further information you may be interested in Attorney Truman Scarborough’s Booklet on Estate Planning in Florida. It is available without charge or obligation by calling (321) 267 – 4770. His office is located at 239 Harrison Street, Titusville, Florida.

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