What happens to these assets if the heir dies first?

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Q. I hope you can help me understand some consequences of my mother’s financial arrangements by answering the following questions: If a daughter who is co- owner or beneficiary of her mother’s accounts predeceases her mother, is her husband next in line for the accounts when the mother dies? Or is it her children? Or can arrangements be changed at that point? If the daughter’s intention was to gift her siblings their share of her mother’s estate to comply with the will that divides the estate equally between all siblings, what happens then?
— Planning

A. There are a few things to consider here.

Let’s start with this.

If the daughter was a co-owner on an account with right of survivorship, then all of the assets in the account belonged to the mother at the time of the daughter’s death and would be distributed in accordance with the terms of the mother’s will, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

If the daughter was a co-owner as tenants in common, then half of the assets would go to the daughter’s beneficiaries under her will or her heirs-at-law if she did not have a will, Whitenack said.

“If the daughter was a sole beneficiary of her mother’s accounts, then the assets would go to the mother’s estate unless there were other primary beneficiaries or contingent beneficiaries named on the accounts,” she said.

If the daughter’s intention was to gift her siblings their share of their mother’s estate from the accounts, then the executor and all of the beneficiaries could enter into an agreement distributing the assets accordingly or, if the parties cannot agree, a court action can be initiated, Whitenack said.

Hope that helps.

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This story was originally published on Nov. 10, 2023

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