Legal Definitions - simultaneous-death clause

Simultaneous-Death Clause

A simultaneous-death clause is a specific instruction included in a will that addresses what happens if the person who made the will (the "testator") and a beneficiary named in that will die at roughly the same time, or if it's impossible to determine who died first. This clause establishes a legal presumption about the order of death.

Generally, a standard simultaneous-death clause states that if such an event occurs, the testator is presumed to have survived the beneficiary. This means the beneficiary is treated as having died before the testator, and therefore cannot inherit from the testator's will. The assets then pass to any alternate beneficiaries named in the will, or according to the will's residuary clause.

However, an important exception often applies when the beneficiary is the testator's spouse. In such cases, the clause might be drafted to presume that the spouse with the smaller estate survived the other. This specific arrangement is typically used for estate tax planning purposes, allowing assets to pass to the spouse's estate to potentially utilize their estate tax exemptions.

Here are some examples illustrating how a simultaneous-death clause works:

• Example 1 (Non-Spousal Beneficiary):

  Eleanor's will leaves her valuable collection of vintage stamps to her beloved niece, Clara. The will includes a standard simultaneous-death clause. Sadly, Eleanor and Clara are involved in a severe car accident, and medical examiners cannot definitively determine who passed away first.

  How it illustrates the term: Because of the simultaneous-death clause in Eleanor's will, Clara is legally presumed to have died before Eleanor. As a result, Clara cannot inherit the stamp collection. Instead, the collection would pass to the alternate beneficiary Eleanor named in her will (for instance, a local philatelic museum) or become part of Eleanor's remaining estate to be distributed to other heirs.

• Example 2 (Spousal Beneficiary for Estate Planning):

  Mark and Lisa are a married couple. Mark has a significantly larger estate than Lisa. Mark's will leaves all his assets to Lisa, with their children as contingent beneficiaries. To optimize estate tax planning, Mark's will includes a simultaneous-death clause that specifically states if he and Lisa die at the same time, Lisa (the spouse with the smaller estate) is presumed to have survived him. They both tragically perish in a boating accident, and the order of their deaths is unknown.

  How it illustrates the term: Due to the specific spousal exception in Mark's simultaneous-death clause, Lisa is legally presumed to have survived Mark. This means Mark's assets are treated as passing to Lisa's estate. This strategy allows Lisa's estate to fully utilize her own estate tax exemptions and other planning tools before the combined assets eventually pass to their children, potentially reducing the overall estate tax burden on the family's inheritance.