Legal Tip 239: Children Dying Before Parents and wills

Discussion in 'Wills & Estate Planning' started by Terry_w, 14th Sep, 2019 at 5:42 PM.

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  1. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    When making a will you should consider what could happen to your estate if your children die before you. Most people don’t want to consider this sort of thing, but you should consider it because the outcomes can be very different when you have grandchildren.


    Example

    Homer and Marge have 3 children, Bart, Lisa and Maggie.


    If Homer dies he leaves everything to Marge, if Marge is gone everything to the children equally. Same with Marge.

    But what if Bart had 3 kids at this point. Should Bart’s 1/3 of the estate go to his children or should it go to Lisa and Maggie instead?

    If going to this kids, the assets would pass like this

    a) 1/3 to Lisa

    b) 1/3 to Maggie

    c) 1/3 to Bart’s kids who would each get 1/3 of 1/3 or 1/9th of the assets of the testator


    If going to the siblings it would look like this

    a) 1/3 to Lisa

    b) 1/3 to Maggie, and

    c) 1/3 to Lisa and Maggie

    Which basically means

    a) ½ to Lisa

    b) ½ to Bart


    Lets assume Marge dies with $900,000 in assets and Homer had died year’s ago, in a car accident with Bart who also died.

    Under scenario 1 Lisa and Maggie would get $450,000 each

    Under scenario 2, if Bart had no kids Lisa and Maggie would get $450,000 each still, but if Bart had 3 kids then:

    a) Lisa $300,000

    b) Maggie $300,000

    c) Bart’s kids $100,000 each
     
  2. geoffw

    geoffw Moderator Staff Member

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    I was once presented with a suggested will (before I was married), leaving my estate to be split equally between my sisters and their children. That was completely ambiguous - it didn't specify who got how much. I rejected that and had somebody competent draw up a will instead.
     
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