Gift Overs

What happens when a beneficiary predeceases the Will-maker?  A well planned Will should cover that common possibility.   Providing for an alternate beneficiary in that case is called a “Gift-Over”.

General Rule: Lapse

The general rule is that where a beneficiary predeceases the Will-maker, the gift that they would have received, lapses. Naturally, this is subject to the provisions of the Will. 

Initial gifts, which include cash legacies and bequests of specific assets, will automatically lapse and fall into the residue of the Will-maker’s estate if the beneficiary predeceases. A predeceased residuary beneficiary’s gift will pass on intestacy. In order to prevent the undesirable outcome of an intestacy, it is important to implement Gift-Over provisions in a Will.

Automatic Gift-Overs 

There are three exceptions to the lapse rules: 1) the anti-lapse statutory provision; 2) joint gifts; and 3) class gifts. 

The anti-lapse statutory provisions apply to situations where the beneficiary was a child, grandchild or sibling of the Will-maker, and there is no other condition in the Will. In this case, the gift would go to the predeceased beneficiary’s intestate heirs. If the gift is conditional (e.g. “if he survives me”) the anti-lapse provisions will not apply. 

If a gift is made to more than one person jointly with the right of survivorship, then the gift would go to the surviving beneficiary should one beneficiary predecease the Will-maker. 

A class gift is left to members of a particular class of people (e.g. divided among “my nieces”). If one niece predeceases the Will-maker, her gift would typically be divided amongst the surviving nieces in the class. 

Residue Gifts 

The entire estate, including residue, must be accounted for when drafting a Will. It is important for drafting solicitors to consider the implications of a beneficiary predeceasing the Will-maker in order to avoid an unintended distribution. Failing to do so could expose a solicitor to negligence claims.  

Typically, it is preferable to divide an estate into “floating shares” rather than percentages. This is an efficient way to ensure that the part of the residue that would otherwise lapse if a beneficiary predeceases is, instead, automatically redistributed among the other residuary beneficiaries. 

Thank you for reading! 

If you're interested in watching the full webinar recording, you can do so here.


Start using the
tools of tomorrow