Order of death

Minding the Gap

The order in which a testator and his or her spouse, civil partner or other beneficiary dies can have a powerful impact on inheritance (who gets what), and inheritance tax (whose estate forks out to the tax man).

Do it right - for example, by naming alternate beneficiaries or using trusts - and your wealth goes pretty much as you intended.

Do it wrong - a poorly drafted will, a lost will or no will at all - and your assets can go to total strangers, even enemies.

Suppose a husband and wife, 70-year-old Harry and 65-year-old Wilma, are killed in an accident. His will leaves everything to her, and her will leaves everything to him.

But Harry and Wilma each have children from previous marriages.

And each of their wills contains a clause to the effect that if their spouse does not survive them by 28 days, the legacy goes instead to their respective children.

Whether Wilma inherits from Harry or Harry from Wilma will therefore be important for their respective children and other heirs.

A related order-of-death problem is not limited to couples and involves a beneficiary dying shortly after a testator. Someone may leave a generous gift to a grandchild, niece or nephew only for the recipient to die a week or so after the testator. If the recipient has no will, the gift goes into the recipient's intestacy. If the recipient has a will, the gift goes to their beneficiaries. Either way, the original testator's gift is out of that person's control.

In many accidents couples die more or less simultaneously, or the order of death can not be determined. However, one of the accident victims may survive the other, if only for a few hours.

When the order of death cannot be established, the older person is presumed to have died first.

Who died when? Alternate Beneficiaries

A "survival clause" is a phrase to the effect that someone is to receive a legacy provided they survive the testator for a specified period of time - usually 28 or 30 days - and if the recipient does not survive for that period of time, the gift goes to someone else.

Survival clauses can be tax efficient by distributing assets rather than concentrating them in a single estate.

The tragic Janus case in America in the 1980s highlights the ways in which order of death can affect inheritance.