Legal Definitions - survivorship clause

A survivorship clause is a specific provision found in legal documents such as wills, trusts, or life insurance policies. Its purpose is to establish a condition that a beneficiary must meet in order to receive an inheritance or benefit.

Specifically, a survivorship clause requires a beneficiary to survive the person who created the will or trust (the "testator" or "settlor"), or another specified individual, for a certain minimum period of time. This period can range from a few days (e.g., 30 days) to several months (e.g., 6 months). If the beneficiary does not survive for the specified duration, they are legally treated as if they died before the testator or the specified individual. In such cases, the inheritance or benefit will then pass to an alternate beneficiary or be distributed according to other instructions in the document.

The main goal of a survivorship clause is often to prevent assets from passing through multiple estates in rapid succession, which can complicate estate administration, delay distribution, and potentially incur additional taxes or probate fees.

• Example 1: Spouses in a Common Accident

  John and Mary are a married couple who each have a will leaving all their assets to the other spouse. Both wills contain a survivorship clause stating that the surviving spouse must outlive the other by 60 days to inherit. Tragically, John and Mary are involved in a severe car accident. John dies instantly, and Mary passes away 45 days later due to her injuries. Because Mary did not survive John for the full 60-day period specified in the survivorship clause, she is legally treated as if she died before John for inheritance purposes. As a result, John's assets do not pass to Mary's estate. Instead, they are distributed directly to the alternate beneficiaries named in John's will (e.g., their children or a designated charity), avoiding the need for John's assets to be probated twice.

• Example 2: Inheritance from a Grandparent

  Eleanor's will leaves a substantial sum of money to her granddaughter, Sarah, but includes a survivorship clause requiring Sarah to survive Eleanor by 90 days. If Sarah does not meet this condition, the money is to go to Sarah's brother, David. Eleanor passes away peacefully. Sarah is alive at the time of Eleanor's death but, unfortunately, dies 70 days later from an unexpected illness. Since Sarah did not fulfill the 90-day survivorship requirement, the survivorship clause dictates that the inheritance does not become part of Sarah's estate. Instead, the funds are directly distributed to David, as per Eleanor's wishes, simplifying the process and ensuring the inheritance goes to the intended backup recipient.

• Example 3: Life Insurance Policy Beneficiaries

  Mark has a life insurance policy that names his wife, Lisa, as the primary beneficiary. The policy also contains a survivorship clause specifying that if Lisa does not survive Mark by at least 30 days, the policy proceeds will be paid to their children, who are listed as contingent beneficiaries. Mark passes away. Lisa is severely injured but survives for 20 days before succumbing to her injuries. Because Lisa did not survive Mark for the full 30-day period required by the survivorship clause, the life insurance proceeds do not go to Lisa's estate. Instead, the insurance company pays the benefits directly to their children, the contingent beneficiaries, ensuring a quicker and more direct distribution of funds as Mark intended.