What Is a Six-Month Survivorship Clause?
- Section 92 of this Act specifies that if a will's terms, or the terms of a life trust, include the condition that the beneficiary survive the testator for a period not exceeding six months, and if the beneficiary does not live that long, any trust or inheritance during a specified period does not hold and is disregarded. According to the government revenue and customs department, "The dispositions which actually take effect at the end of the specified period are treated as having done so immediately on death."
- A primary benefit of the survivorship clause law is convenience of administration. Estate administration may be complex, and becomes more so if the beneficiary dies shortly after the testator. This amounts to double administration, as the original decedent's assets pass to the beneficiary, only to be included in the now-deceased beneficiary's estate. The survivorship clause also avoids double taxation, as the assets from the original decedent are taxed, then immediately taxed again if part of the deceased beneficiary's estate. In most cases, had the beneficiary died before the testator, the testator would have passed assets to another beneficiary.
- In practical terms, the maximum six-month survivorship clause means that assets cannot be distributed to heirs and beneficiaries until six months after the decedent's date of death. It only applies if the terms of the will specify a survivorship period with property held on the condition that the beneficiary survives for the time period. Survivorship clauses do not apply to any jointly held property, spousal or otherwise. It also does not apply to discretionary trusts gifts. Such gifts may be conditional on the survival of the beneficiary, but not for a specific time period.
- The person designated in the will as the executor or trustee should never be included in a survivorship clause, as it would mean the individual would not be able to undertake any action regarding the estate until the specific time period passed. This would include filing the will for probate.