What Happens if a Beneficiary Dies?

The death of a beneficiary named in your will can impact the way in which your estate is distributed. The nature of the impact will depend on the terms of your will.

Estates are often distributed by way of their “residue” as opposed to the distribution of specific assets. The residue of your estate is the value of your estate after payment of liabilities. If your will distributes the residue of your estate, it will therefore distribute the net value of your estate amongst your named beneficiaries.

If you have gifted a specific asset to a beneficiary and that beneficiary dies, that asset will form part of the residue of your estate. The exception to this would be if you have included a term naming an alternate beneficiary for that specific asset.

Terms naming alternate beneficiaries are often referred to as “gift-over” provisions. Gift-over provisions allow you to specify who should receive an asset or share of the residue of your estate if the primary beneficiary dies.

Gift-over provisions are commonly used when the residue of an estate is to be divided amongst the will-maker’s children. The will-maker may decide to include a term that states that, if their child pre-deceases them, that child’s share of the residue is to be divided amongst that child’s surviving children.

In the absence of gift-over provisions, where a named beneficiary dies, the residue to which they would have been entitled to will be divided amongst the surviving beneficiaries entitled to receive the residue of the estate. In the event that there are no surviving beneficiaries, the will-maker’s estate would be distributed as if they did not have a will. This would be done in accordance with the intestacy provisions of the Wills, Estates and Succession Act, S.B.C. 2009, ch.13.