What Happens to a Will or Trust When a Beneficiary Passes Away?

What Happens to a Will or Trust When a Beneficiary Passes Away?

If a beneficiary in your will or trust has passed away, it is important to know what will happen and what you can do. Continue reading to learn more about this process and how our experienced Maryland estate planning attorney can assist you.

What is a beneficiary?

A beneficiary is a person named to receive property or other benefits from your estate plan. You can name a beneficiary to inherit any of your assets in your estate including real estate, financial accounts, and more.

What happens to a will or trust when a beneficiary dies?

If the beneficiary of a trust or will passes away, the person who established the trust or will is required to amend their estate plan. The estate plan will still be in effect if this occurs.

There are two paths for the inheritance to take when naming beneficiaries for an estate plan when a will or trust is created. Both of these paths will consider the possibility of the beneficiary predeceasing the person who is creating the estate plan. The first path is to say the beneficiary’s inheritance “lapses.” In this case, if the beneficiary dies before the person who created the estate plan, this beneficiary’s inheritance will no longer be in effect. The second path is to name beneficiaries for an estate plan as their inheritance passes “per stirpes.” In this case, if a beneficiary dies before the person who created the estate plan, their share of the estate will go to their descendants. Each living beneficiary that is named will receive the deceased’s original portion of the estate. If the beneficiary has no children in an estate plan that utilizes per stirpes language, the inheritance will go as if it has lapsed.

It is best to amend the estate plan when a beneficiary passes away before the person who had created the estate plan. However, using lapse and per stirpes language allows estate planners to create a plan that considers the chance that the beneficiary predeceases the creator of the estate plan.

To learn more about your will or trust when a beneficiary dies and the steps you can take to modify your estate plan, reach out to our experienced Maryland estate planning attorney. Our legal team is prepared to assist you with your estate planning needs. Do not hesitate to give our firm a call to schedule your initial consultation with our team.

Contact our experienced Montgomery County, Maryland firm

The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.

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