A: You should also specify in the trust document who the contingent beneficiaries of your assets will be! If you don’t specify the contingent beneficiary, the Probate Code will decide who receives the deceased beneficiary’s inheritance – the default rule is known as the Anti-Lapse statute, and it states that if the deceased beneficiary is related to you or to your spouse (surviving, predeceased, or former), the descendants of the deceased beneficiary will receive the inheritance in his or her place. However, if the deceased beneficiary is NOT related to you or to your spouse, then the gift will fail and be distributed to the beneficiaries named in the residual distribution clause. The point here is straightforward: the default rules can be convoluted and difficult to understand, therefore it’s always best to avoid the application of the default rules by simply taking the time to plan out who the contingent beneficiaries will be in the event one of your beneficiaries does not survive you!
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