We offer you our sincerest condolences if you’re reading this blog because you’re dealing with the loss of a loved one. Fiduciary law is complex and can add so many challenges to what’s already a difficult time in your life.
When someone signs a will or trust, they will usually have selected one or more beneficiaries that will inherit assets from the estate, or receive distributions from the trust. But what happens when a beneficiary dies? What happens to that person’s share of the inheritance?
In many cases, the will or trust will designate a secondary beneficiary to inherit that person’s share, or provide guidelines on how the inheritance should be re-distributed in case one of the beneficiaries dies. But if there are no clear directives, then the inheritance should be re-distributed according to Georgia’s intestate succession laws.
We’ll try to explain this topic in the clearest terms possible so you know what to expect out of probate, and what you should do if you face any legal challenges regarding an inheritance or trust distribution issues.
Will or Trust Provisions
In many will or trust documents, there are provisions that outline who will inherit the beneficiary’s portion in the event that a beneficiary has already died. Most of the time, the property will be passed onto the beneficiary’s spouse or children, but the will or trust can also direct that it be dispersed among the other beneficiaries who are still living.
For example, a will or trust might specifically stipulate that, if the beneficiary dies, the portion they would have received will go to the beneficiary’s spouse. Or the will or trust might direct that the portion that was to go to the beneficiary is to be equally divided between the deceased beneficiary’s children.
In many situations, the will or trust may provide the following legal terms to describe what happens if a beneficiary dies before receiving their inheritance or trust distribution:
- “Per Stirpes” Distribution: The inheritance or trust distribution will be divided in equal portions among each child. If a child in the first generation dies before their parent, the share that would have been given to that child would be distributed among that child’s children in equal shares.
- “Per Capita” Distribution: The deceased beneficiary’s share will be distributed in equal portions among all the surviving beneficiaries.
If there are no provisions that identify a secondary beneficiary, then the inheritance will be distributed according to Georgia’s intestate succession laws.
Related Blog: Should You Tell Your Children What’s in Your Will?
Georgia Intestacy Laws
In situations when there’s no clear beneficiary identified, or there is not a will, then the inheritance will be distributed according to Georgia’s intestacy laws. These are legal guidelines set by the Georgia Legislature that set forth the order of who receives the inheritance.
In Georgia, intestate laws stipulate that inheritance will be distributed, in the following priority and order, to:
- The Spouse and Children: The beneficiary’s spouse and children will receive the inheritance. The spouse receives at least 33% while the rest is split equally between the children.
- The Children Only: If the beneficiary has no living spouse, then the children will split the inheritance equally.
- The Siblings: If the beneficiary has no living spouse or children, then the beneficiary’s siblings will split the inheritance equally.
- The Family: If the beneficiary had no living spouse, children, or siblings, then other family members will split the inheritance: first grandparents, then uncles and aunts, and lastly first cousins.
If the estate executor can’t find any living relatives of the beneficiary, then the executor or trustee is required to turn it over to the state. Each state has a department of “unclaimed” funds that works to locate the rightful owners of these assets. You can search for unclaimed funds at the following website: https://unclaimed.org/
Related Blog: Surviving Spouse Rights in Georgia: A Quick Guide
What Happens When the Sole Beneficiary Dies?
If the estate’s or trust’s only beneficiary dies, then all of the guidelines discussed in the sections above will apply:
- The inheritance or trust distributions will be passed on to a secondary beneficiary, if designated by the will or trust. Or, the beneficiary’s children will split the inheritance if the will directs per stirpes distribution.
- If the will or trust does not provision per stirpes distribution, then the beneficiary’s spouse and children will split the inheritance.
- The beneficiary’s siblings or family will inherit the share if the beneficiary has no living spouse or children.
- If the estate executor or trustee can’t find living relatives, then the executor or trustee is required to turn it over to the state. Each state has a department of “unclaimed” funds that works to locate the rightful owners of these assets. You can search for unclaimed funds at the following website: https://unclaimed.org/.
Keep in mind that every will or trust document may have unique provisions on how the assets should be distributed if a beneficiary dies. For instance, a trust document may stipulate that if a beneficiary were to die, their share of the inheritance would be donated as a gift to a non-profit organization.
But it’s important that these stipulations be explicitly stated in the will or trust documents. Otherwise, the assets will be distributed according to intestate succession.
Related Blog: What is the Process for Probate in Georgia?
Disputes That Occur When a Beneficiary Dies
Unfortunately, the death of a beneficiary often opens the door to estate or trust litigation. In our experience handling estate and trust cases, we’ve seen other beneficiaries or outside parties make claims on the deceased person’s share of the estate or trust.
Schedule a consultation with Gaslowitz Frankel if you’re dealing with a will or trust dispute in Georgia. These cases can be emotionally and financially challenging; our firm is dedicated to helping you resolve the dispute in the most financially beneficial way while also minimizing family conflict.
