Dear Mr. Premack: My father left a Will that gives one-third to my son Tom, one-third to my son Jeff, and one-third to my daughter Peggy. The problem is that Peggy died three years before my dad died. Does her part go to her son, or does it go to her brothers? – J.R.
We are all legally empowered to identify our heirs and specify the portion of our estates they are to receive upon our deaths. Most people use the traditional Last Will and Testament to do so, but the same instructions can be issued in a properly written and funded Living Trust or, depending on the asset, can be left as contractual arrangements with an asset’s custodian.
When issuing those instructions, one key element is to be certain that we designate very specific backup plans. Your father’s “Plan A” was to leave all the assets in equal shares to Tom, Jeff and Peggy. That plan failed because Peggy died several years ahead of him and cannot receive her share. Now you ask what happens to her share. To me, your question indicates that your father did not include a “Plan B” in his Will.
He may have made the common error of thinking he did not need a Plan B because, well, if something happened to any of his three grandchildren he could just make a modification to his Will. While it is true that a person always has the legal right to modify their Will, it is not true that a person always has the practical ability to modify their Will. Though Peggy died three years before your father, which should have given him plenty of time to change his Will regarding her share, he may have failed to do so because he was in a nursing home suffering from dementia (or some other medical malady that prevented him from taking action). Whatever the cause, he did not modify his Will and did not leave a Plan B with a ready alternative.
So, does Peggy’s part go to her son or does it go to her brothers? The law label’s Peggy’s share as a “lapsed devise”. Texas Estates Code 255.152 and .153 answer your question. If the devisee was a descendant of your father (as was Peggy) then her lapsed share passes to her own descendants (her son) so long as he outlived your father by at least five days.
What if Peggy had not been a descendant of your father? Let’s say he left one-third of his estate to his long-time companion. In that case, Texas law says that the lapsed share is treated as part of the “residuary estate” and passes to the other “residuary devisees” named in the Will. The question then becomes: does the wording of the Will name Tom and Jeff as residuary devisees, or does it have a different disposition? If they are the residuary devisees, they would get the companion’s (non-descendant’s) share in preference to the companion’s children getting the share.
The lesson here is to always include a Plan B (and even a Plan C) in your Will and keep it up to date. If something happens to scuttle your Plan A, you may or may not be able to modify your Will to accommodate the changed circumstances. Having your own backup plans already in place means your family will not be left with the solution provided by law, but will have instructions directly from you. Your Certified Elder Law Attorney will assist you to draft your estate plan so that your family always knows your instructions and can enact your plans even if circumstances have changed.
Paul Premack is a Certified Elder Law Attorney and a Five Star Wealth Manager (Texas Monthly Magazine 2009-2013) practicing estate planning and probate law in San Antonio.
Original Publication: San Antonio Express News, February 10, 2014