In estate planning, “default takers” are the beneficiaries under a Will or Revocable Trust who “take” (that is, who receive the assets controlled by one’s Will or Revocable Trust at his or her death) when all of the named beneficiaries have predeceased the testator or settlor and there are no alternate beneficiaries described in the document. (By named beneficiaries, I mean not only a person who is identified by his or her particular name but beneficiaries who are named by class, such as “my children” or “my descendants.” I also mean beneficiaries who take under certain statutes called “anti-lapse” statutes, which I will discuss in another post.) Some Wills and Trust Agreements do not identify “default takers.” In that case, the default distribution of the decedent’s assets is controlled by the “laws of intestacy.” My view is the every Will or Trust Agreement should expressly name the “default takers,” even if it seems highly unlikely that such a clause will ever be needed. Here is an illustration of the problem in the case of someone who died unmarried:
Several years ago, a probate judge appointed me as personal representative of an estate in which the decedent’s Will named only her next-door neighbor as the beneficiary. The problem was that the next-door neighbor had predeceased the decedent and the Will did not describe any alternates. In that case, Florida’s intestacy laws took over, just as if the decedent had died without a Will. Here is the priority order in which those laws would identify the default beneficiaries in that case:
- All her descendants. But the decedent had no descendants.
- Then to the decedent’s father and mother equally, or to the survivor of them. But neither of the decedent’s parents survived her.
- Then to the decedent’s brothers and sisters and the descendants of deceased brothers and sisters. But the decedent was an only child.
- Then to the decedent’s grandfather and grandmother equally, or to the survivor of them. But they also had predeceased the decedent.
- Then to uncles and aunts and descendants of uncles and aunts of the decedent. The decedent’s father was an only child, but the decedent’s mother had two sisters.
Although both aunts had passed away, there were cousins who survived our decedent. One of the aunts had one child and he survived. The other aunt had six children and they also survived.
One might expect, then, that the decedent’s estate would be divided into seven equal shares, with one share distributed to each cousin. But Florida directs that “descent shall be per stirpes,” whether to descendants or to collateral heirs.” The cousins were “collateral heirs.” Thus, the cousin who was the only child received one-half of the estate and the six cousins who were brothers and sisters each received one-twelfth of the estate. The six were unhappy. But that’s how the matter fell out under the intestacy laws. This result could have been avoided had the decedent, when she undertook her estate plan, been mindful of the contingency that her named beneficiary might predecease her.
Some of my clients take the matter of the default takers very seriously. They may name a list of friends or charities or some friends and some charities or some charities alone. In the case of our decedent, perhaps none of her cousins had been a particular favorite. She could have directed that if her aunts did not survive, the distribution to her cousins was to be per capita and not per stirpes, so that each would have received an equal share.
What if the decedent’s two aunts had died childless? Had the decedent been a widow, then her estate would have gone to the kindred of her last deceased spouse as if that spouse had survived the decedent and then had died intestate himself. But our decedent had never been married. What then? In that case, Florida law requires that the estate escheat to the State of Florida. There is, then, no further genealogy tracing. We do not, for example, jump up to the decedent’s great-grandparents and start down the family tree from there. But note the following.
At one time Florida law stated that if any of the descendants of the decedent’s great-grandparents were Holocaust victims as defined in s. 626.9543(3)(a), including such victims in countries cooperating with the discriminatory policies of Nazi Germany, then the estate was to be distributed to the descendants of the great-grandparents. However, that extension of the laws of intestacy applied only to proceedings filed before January 1, 2005.
In another post, I discuss the situation where a widow or widower dies with a Will that does not name a default taker and all of his or her named beneficiaries are gone when that person dies. There is a standard clause for that situation that one often sees in Wills and Trusts. It is often not satisfactory. I will write about that.