Second Death Gifts

By November 10, 2017Gifting, Inheritance, Wills

Many couples making Wills wish to leave bequests of particular items, sums of money, or a share of their estate, but only when both testators have passed away.

So how can we ensure this happens?

The way to ensure that a gift is only made on second death is to place the gift(s) in both Wills, and ensure there is a condition that states the gift should only be made should the partner/spouse has predeceased the testator. For example, ‘If my wife Susan Smith has predeceased me, I give…’.

When making a second death gift, the testator is giving this gift to their partner/spouse on their death as part of the Residue of their estate, therefore on the death of the survivor, the gift is made payable from the survivor’s estate.

If the clients have requested a second death gift in their Will, but it has only been placed in one of the Wills, if that person dies first, the gift would not be made. This is because condition of the gift states it should only take effect if their partner/spouse has predeceased them, therefore it has passed to the survivor under Residue, but the gift is not present in their Will. For the gift to take place, the survivor would need to either amend their Will, or make the gift during their lifetime.

What if clients wish for different beneficiaries to inherit their estate on second death?

This is where the subject can become complex. As mirror Wills, both Wills must reflect the other, especially if the survivor of the two are to inherit the deceased’s estate on first death. The clients will need to come to a joint decision as to who should inherit their estate and in what shares. Remember that where Residue passes absolutely to spouse or partner it’s no longer just their estate, both estates then become combined. A simple solution would be to split the residuary estate 50/50. Each 50% share can be subdivided into separate shares should the clients wish so that certain beneficiaries may receive a higher share than others.  If the joint estate is unequal, if each testators’ respective shares can be provided, we can split them that way.

What are the consequences if the Wills do not reflect each other?

If the Wills do not reflect each other, who inherits, and in what shares they will inherit, will depend on which testator died first. As the estate on first death will pass to the survivor, on second death, the estate will follow the terms of the survivors Will, meaning certain people may inherit a much smaller share than expected, if they inherit at all!

The now disinherited beneficiaries may seek compensation for their loss of inheritance by claiming against the estate. They may also seek further action against the introducers and the drafters for negligent drafting. As Will Writers, we would have a duty to ensure that clients are fully advised where a case is contentious.

What if the survivor changes their Will?

Unfortunately, if the survivor decides to change their Will after their spouse/partner has passed away, testamentary freedom grants them this right. As Will Writers, we can only provide for the needs of our clients at the time of making the Will. As shown in many cases, the death of a loved one can cause issues in the closest of families where money is involved. When leaving anything as a second death gift, it does rely on the trust of each party that the survivor will not rewrite their Will or if they do they will ensure that the first to dies wishes will be followed, but we can only advise as circumstances can change over time.

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