When a Beneficiary Dies

You took all the right steps. You set up your estate plan, made sure your final wishes were clear, and provided for your beneficiaries upon your passing. But what happens in Michigan when your beneficiary passes away before you and you don’t update your estate plan to name an alternate beneficiary?

At that point, Michigan’s anti-lapse statute might apply. The principle of anti-lapse requires the children of a deceased beneficiary to inherit property that was intended to go to their parent. The individuals receiving the substitute gift must be descendants of the testator.

This may not be the desired outcome for a testator for many reasons, such as wanting the gift to stay amongst remaining named beneficiaries rather than be passed down to grandchildren.

There are steps you can take to make sure your gift stays amongst the people that you choose. It is important to routinely review your estate plan to determine if any updates need to be made, especially if a named beneficiary has passed away. It is also important to make sure there is clear language in your documents outlining exactly what you want to happen in the event that a beneficiary predeceases you, so your assets are distributed according to your wishes.

If you need help setting up, reviewing, or updating your estate plan, reach out to us at 248.477.6300. We are here to help.