If a child dies before me, who gets their interest in my Will?

There are three great uncertainties in building your Will:

1. You do not know the date of your death.

2. You do not know what assets you own.

3. We do not know what the law is, as laws change all the time.

That is why building a Will requires flexibility. Flexibility reduces the 32% tax on your super when you die. Flexibility allows your beneficiaries to turn on a Divorce Protection Trust or Bankruptcy Trust after you are dead.

One other uncertainty is what happens if a beneficiary dies before you. Does the asset go back to the pot to be divided up with the remaining living beneficiaries who outlasted you? Or do the dead child’s own children get what the dead beneficiary would have got?

In your Will what happens if a child dies before you?

If a child dies before you, their gift in your Will usually passes to their own children (your grandchildren). This happens via anti-lapse laws, rather than vanishing, unless your Will states otherwise.

If you lack a substitution clause or surviving children, the gift lapses. It becomes part of your residual estate. This potentially leads to intestacy rules if you fail to properly structure your Will.

We use an anti lapse clause or lineal descent clause to stop this.

Lineal descent ensures assets pass through the bloodline. This prevents grandchildren from being excluded if their parent dies before the Will maker. Old Wills use the Latin term per stirpes. Today, we build bloodline gifting clauses in a Will.

Bloodline gifting clauses in a Will

Consider how this works in practice. You have three children. One of your children is Colin.

Sadly, Colin dies before you. Colin himself has two children. Because of the bloodline clause, what Colin gets goes directly to his children. Your grandchildren step into his shoes.

Take the same example. But this time, Colin and his two children die in the same car accident.

Because Colin and his children all die before you, that branch of the family ends. The gift goes back to the pot. The remaining living beneficiaries who outlasted you divide those assets.

Overriding the lineal descent clause

You maintain total control when you build a 3-Generation Testamentary Trust Will. You can override the bloodline gifting clause at any time.

For example, you leave $10,000 to a friend. You do not know his children. If your friend dies before you, you want the gift to fail. In this case, you merely override the lineal descent requirement for that specific gift. The $10,000 stays in your estate to divide among your main beneficiaries.

Building a Legal Consolidated 3-Generation Testamentary Trust Will handles these exact uncertainties automatically. It ensures the right people get the money, with the flexibility to protect it from the Family Court and bankruptcy courts after you die.