Monday, April 7, 2014

Survivorship In the Context of Estate Planning and Probate

Crashed Car

Image from, #921217

Imagine a car is traveling on the interstate, heading out for a much needed Spring Break.  At the wheel is a newly minted driver, 16 year old Todd.  In the passenger seat is his proud mother Sharon, navigating the GPS instructions taking them to the Sunshine State for some good times.  At home remains Todd's pet dog Tuffy, left in the care of his father, Ted, the ex-husband of Sharon.  In the blink of an eye a tire flies off a passing vehicle.  The inexperienced Todd over-corrects and a violent collision occurs.  When rescue crews arrive Sharon is declared dead on the scene.   Todd is airlifted to the nearest trauma hospital where he dies. What happens to Sharon's estate?

If she did not have a will, state statute controls.  Here in Wisconsin her probate estate would pass to her son as long as he outlived her by 120 hours.  Should Todd die the following day, he would not have survived and Sharon's estate would pass to her next heirs-at-law, her parents if they are living (assuming Todd had no children of his own or other siblings from his mother).  If not, then on to Sharon's siblings.  Should Todd outlive Sharon by 3 weeks he would have survived her, inherit her estate, and then died intestate (no will) with state statues leaving his assets (those that he just inherited from his mom) to his father, Ted.  Yes, whether Todd dies before or after 120 hours determine whether or not Sharon's assets would eventually pass to her ex-husband.  

Survivorship, outliving another from which you will inherit, is not a simple issue.  If a will controls the distribution of property it likely contains a suvivorship clause, meaning in order to inherit, one needs to outlive the decedent by a certain number of days.  The documents we draft in our office generally call for a 90 day survivorship.  Residents of Wisconsin without a will fall under state statue requirements of 120 hours (5 days) in order for another to inherit.  Wisconsin Statutes, Section 854.03(1) states:

854.03 Requirement of survival by 120 hours.(1) Requirement of survival. Except as provided in sub. (5), if property is transferred to an individual under a statute or under a provision in a governing instrument that requires the individual to survive an event and it is not established that the individual survived the event by at least 120 hours, the individual is considered to have predeceased the event.

Do not assume that just because someone died after another that the statutes, or a governing document, will agree on that person having survived.  As you can see with this hypothecial, survival is conditioned on surviving for a certain amount of time.  That time varies from state to state, and document to document. Consult with an attorney to learn more about your specific situation.

Thanks for reading, and if you are head out on Spring Break, be safe and buckle up when behind the wheel.

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