When people prepare a Will, they sometimes may not consider what will happen to their Estate if all of the beneficiaries listed in the Will are no longer alive to benefit from the Will.
In this situation, the balance of the Will maker’s Estate, known as the residuary Estate, will be given to the reserve beneficiaries. If a Will maker decides not to list reserve beneficiaries, the Will maker’s Estate may pass to family members who the Will maker would never have imagined could benefit from their Will.
For example, a Wife lists her Husband as a beneficiary in her Will and if he passes away, then her Estate is to be left to their Son. The Wife has listed no reserve beneficiaries in her Will as she believes that her Son will still be alive to inherit her Estate once she or her Husband have passed away.
However, if the Wife, Husband and Son were all to pass away at the same time, then there are no beneficiaries alive to inherit the Wife’s Estate. The Estate would then be given to the reserve beneficiaries. As there are no reserve beneficiaries listed in the Wife’s Will, the Estate may be distributed as follows:
1. Where the parents of the Will maker are still alive:
- The parent is entitled to the whole of the residuary estate, or if both parents are alive, they are entitled to the whole of the residuary estate in equal shares.
2. Where the Will maker is not survived by a parent, but is survived by a next of kin:
- The next of kin is entitled to the residuary Estate – that is, the Will maker’s brothers, sisters (and their children), grandparents, uncles and aunts.
3. Where the Will maker has no surviving children, parents or next of kin that are still alive:
- The residuary Estate will be deemed to have no owner and the Crown, or State Government, will be entitled to receive the Will maker’s entire Estate.
Accordingly, if all of the beneficiaries in the Will have passed away and no reserve beneficiaries are listed, then the Will maker’s Estate may be given to people that the Will maker would never have considered to benefit from their Will. As a result, it is important to consider listing reserve beneficiaries when preparing a Will.
For information on including or adding reserve beneficiaries to your Will, or Estate law in general, please do not hesitate to contact me.