Survivorship Requirements (and Barbara Bush’s Legacy)
On April 17, 2018, our country lost one of its great first ladies, Barbara Bush. She loved her large family well. She was an avid advocate of literacy and helped break social stigmas toward people with AIDS at the beginning of the epidemic. She and her husband, former president George H. W. Bush, were married for seventy-three (73!) years. Just a day after her funeral, George H. W. Bush was hospitalized with a blood infection. At the writing of this article it appears that he is in recovery, but it raises the question, what happens when two closely related people pass away in close proximity to each other?
If you have an estate plan, oftentimes, this issue will be addressed in your estate plan documents. In our documents, we typically state that a beneficiary must survive by at least one hundred and twenty (120) hours in order to inherit from an estate. Also, financial institutions can impose their own survivorship requirements, so you should check a company’s terms and conditions for any such requirements. If there are beneficiaries listed on your financial accounts, the rules of the survivorship requirements of the company will trump what is written in your estate plan. Alternatively, if neither your estate plan nor a company’s policies mention what happens if a beneficiary dies closely in time to you, most states have laws in place to address the issue. While the laws vary, many states, including Tennessee, have adopted the Uniform Simultaneous Death Act. There are a few different scenarios addressed in the Uniform Simultaneous Death Act, including:
- If there is no evidence as to who died first, then the property of each person is disposed of as if that person had survived.
- If two people die at the same time owning joint property together, then the joint property is divided one-half (1/2) as if one had survived and one-half (1/2) as if the other had survived.
- If the insured and beneficiary of a life or accident insurance policy die at the same time, then it is treated as if the insured had survived the beneficiary.
- A person cannot inherit from your estate if that person does not survive you by one hundred twenty (120) hours.
If a beneficiary dies in close proximity to you but survives longer than the time requirement, the assets from your estate that you’ve left to the deceased beneficiary pass to that beneficiary’s estate. This situation can present some complicated scenarios when the two people who have died have different estate plans or beneficiaries. In the case of a husband and wife dying close to the same time, quite frequently their estate plans are mirror images of each other, so the same people inherit the property regardless of whose estate plan controls. We don’t see these types of scenarios very often, but you can see how the situation can become complicated quickly! If you have questions about what would happen according to your plan, or if you want to make sure that a particular person gets your assets if your initial beneficiary dies in close proximity to you, reach out to our office
and we’ll talk you through the different possible scenarios.